Exhibit 10.12
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GRANITE CONSTRUCTION INCORPORATED
$60,000,000 6.54% SENIOR NOTES DUE MARCH 15, 2010
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AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
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Dated as of November 1, 2001
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THE INFORMATION SET FORTH ON SCHEDULES 5.15, 5.16 AND 5.18 TO THIS NOTE PURCHASE
AGREEMENT IS "CONFIDENTIAL INFORMATION" SUBJECT TO THE REQUIREMENTS OF SECTION
20 HEREOF.
TABLE OF CONTENTS
SECTION HEADING PAGE
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SECTION 1. AMENDMENT AND RESTATEMENT............................................1
Section 1.1. Amendment and Restatement............................................1
Section 1.2. Agreement of Holders.................................................1
SECTION 2. SALE AND PURCHASE OF NOTES; GUARANTY.................................2
Section 2.1. Intentionally Omitted................................................2
Section 2.2. Guaranty of Notes....................................................2
Section 3. Intentionally Omitted................................................2
SECTION 4. CONDITIONS PRECEDENT.................................................2
Section 4.1. Representations and Warranties.......................................2
Section 4.2. Performance; No Default..............................................2
Section 4.3. Compliance Certificates..............................................2
Section 4.4. Guaranty Agreement...................................................2
Section 4.5. Payment of Special Counsel Fees......................................3
Section 4.6. Proceedings and Documents............................................3
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................3
Section 5.1. Organization; Power and Authority....................................3
Section 5.2. Authorization, Etc...................................................3
Section 5.3. Disclosure...........................................................3
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.....4
Section 5.5. Financial Statements.................................................4
Section 5.6. Compliance with Laws, Other Instruments, Etc.........................4
Section 5.7. Governmental Authorizations, Etc.....................................5
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders............5
Section 5.9. Taxes................................................................5
Section 5.10. Title to Property; Leases............................................5
Section 5.11. Licenses, Permits, Etc...............................................6
Section 5.12. Compliance with ERISA................................................6
Section 5.14. Intentionally Omitted................................................7
Section 5.14. Intentionally Omitted................................................7
Section 5.15. Existing Debt........................................................7
Section 5.16. Existing Investments.................................................7
Section 5.17. Status under Certain Statutes........................................7
Section 5.18. Environmental Matters................................................7
Section 5.19. Original Note Purchase Agreement Representations and Warranties......8
SECTION 6. REPRESENTATIONS OF THE PURCHASERS....................................8
Section 6.1. Purchase for Investment..............................................8
Section 6.2. Source of Funds......................................................8
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SECTION 7. INFORMATION AS TO COMPANY...........................................10
Section 7.1. Financial and Business Information..................................10
Section 7.2. Officer's Certificate...............................................12
Section 7.3. Inspection..........................................................13
SECTION 8. PREPAYMENT OF THE NOTES.............................................13
Section 8.1. Required Prepayments................................................13
Section 8.2. Optional Prepayments with Make-Whole Amount.........................14
Section 8.3. Allocation of Partial Prepayments...................................14
Section 8.4. Maturity; Surrender, Etc............................................14
Section 8.5. Purchase of Notes...................................................15
Section 8.6. Make-Whole Amount...................................................15
SECTION 9. AFFIRMATIVE COVENANTS...............................................16
Section 9.1. Compliance with Law.................................................16
Section 9.2. Insurance...........................................................17
Section 9.3. Maintenance of Properties...........................................17
Section 9.4. Payment of Taxes and Claims.........................................17
Section 9.5. Corporate Existence, Etc............................................17
Section 9.6. Guaranty Agreement..................................................17
SECTION 10. NEGATIVE COVENANTS..................................................19
Section 10.1. Nature of Business..................................................19
Section 10.2. Consolidated Net Worth..............................................19
Section 10.3. Incurrence of Debt..................................................19
Section 10.4. Subsidiary Debt.....................................................20
Section 10.5. Liens...............................................................20
Section 10.6. Restrictions on Dividends of Subsidiaries, Etc......................22
Section 10.7. Mergers, Consolidations, Etc........................................22
Section 10.8. Sale of Assets, Etc.................................................24
Section 10.9. Disposal of Ownership of a Subsidiary...............................24
Section 10.10. Sale-and-Leasebacks.................................................25
Section 10.11. Transactions with Affiliates........................................25
SECTION 11. EVENTS OF DEFAULT...................................................25
SECTION 12. REMEDIES ON DEFAULT, ETC............................................27
Section 12.1. Acceleration........................................................27
Section 12.2. Other Remedies......................................................28
Section 12.3. Rescission..........................................................28
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc...................28
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.......................29
Section 13.1. Registration of Notes...............................................29
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Section 13.2. Transfer and Exchange of Notes......................................29
Section 13.3. Replacement of Notes................................................30
SECTION 14. PAYMENTS ON NOTES...................................................30
Section 14.1. Place of Payment....................................................30
Section 14.2. Home Office Payment.................................................30
SECTION 15. EXPENSES, ETC.......................................................31
Section 15.1. Transaction Expenses................................................31
Section 15.2. Survival............................................................31
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT........31
SECTION 17. AMENDMENT AND WAIVER................................................32
Section 17.1. Requirements........................................................32
Section 17.2. Solicitation of Holders of Notes....................................32
Section 17.3. Binding Effect, Etc.................................................32
Section 17.4. Notes Held by Company, Etc..........................................33
SECTION 18. NOTICES.............................................................33
SECTION 19. REPRODUCTION OF DOCUMENTS...........................................33
SECTION 20. CONFIDENTIAL INFORMATION............................................34
SECTION 21. INTENTIONALLY OMITTED...............................................35
SECTION 22. MISCELLANEOUS.......................................................35
Section 22.1. Successors and Assigns..............................................35
Section 22.2. Payments Due on Non-Business Days...................................35
Section 22.3. Severability........................................................35
Section 22.4. Construction........................................................35
Section 22.5. Counterparts........................................................35
Section 22.6. Governing Law.......................................................36
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ATTACHMENTS TO THE NOTE PURCHASE AGREEMENT:
SCHEDULE A -- Information Relating to Holders
SCHEDULE B -- Defined Terms
SCHEDULE 4.9 -- Changes in Corporate Structure
Schedule 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.11 -- Patents, Etc.
SCHEDULe 5.15 -- Existing Debt
SCHEDULE 5.16 -- Existing Investments
SCHEDULE 5.18 -- Environmental Matters
EXHIBIT 1 -- Form of 6.54% Senior Note due March 15, 2010
EXHIBIT 2 -- Form of Guaranty Agreement
EXHIBIT 3 -- Investment Policy Guidelines
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GRANITE CONSTRUCTION INCORPORATED
585 WEST BEACH STREET
WATSONVILLE, CALIFORNIA 95076
6.54% Senior Notes due March 15, 2010
Dated as
November 1, 2001
TO THE HOLDERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
Reference is hereby made to that certain Note Purchase Agreement dated
as of March 1, 1998 (the "Original Note Purchase Agreement") between Granite
Construction Incorporated, a Delaware corporation (the "Company"), and each of
the institutional investors named in Schedule A attached thereto, under and
pursuant to which the Company issued $60,000,000 aggregate principal amount of
its 6.54% Senior Notes due March 15, 2010 (the "Notes", such term to include any
such notes issued in substitution therefor pursuant to Section 13 of this
Agreement (as hereinafter defined)). The Notes shall be substantially in the
form set out in Exhibit 1, with such changes therefrom, if any, as may be
approved by each Holder (as hereinafter defined) and the Company. Certain
capitalized terms used in this Agreement are defined in Schedule B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
The Company agrees with the holders of Notes listed in Schedule A (the
"Holders") as follows:
SECTION 1. AMENDMENT AND RESTATEMENT.
Section 1.1. Amendment and Restatement. The Company now desires to
amend and restate the Original Note Purchase Agreement to be in the form of this
Agreement.
Section 1.2. Agreement of Holders. In consideration of the premises and
other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the Holders have agreed to the amendment and restatement
described in this Section 1. Accordingly, subject to the terms and conditions
hereof and on the basis of the representations and warranties herein contained
or incorporated herein by reference, the parties hereto hereby agree that, from
and after the fulfillment of the conditions set forth in Section 4, the Original
Note Purchase Agreement shall be deemed to be amended and restated in the form
of this Agreement.
SECTION 2. GUARANTY.
Section 2.1. Intentionally Omitted.
Section 2.2. Guaranty of Notes. 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 are fully and unconditionally guaranteed by
Granite Construction Company, a California corporation, Granite Land Company, a
California corporation, Intermountain Slurry Seal, Inc., a Wyoming corporation,
Pozzolan Products Company, a Utah corporation, GILC, L.P., a California limited
partnership, G.G.&R., Inc., a Utah corporation, and Granite Halmar Construction
Company, Inc., a New York corporation, and each other from time to time Material
Subsidiary (collectively, the "Guarantors") pursuant to that certain Subsidiary
Guaranty Agreement dated as of March 1, 1998 (as amended and supplemented to the
date hereof and as further amended and supplemented from time to time, the
"Guaranty Agreement") from the Guarantors to each Purchaser and each other from
time to time holder of Notes substantially in the form attached hereto as
Exhibit 2.
SECTION 3. INTENTIONALLY OMITTED.
SECTION 4. CONDITIONS PRECEDENT.
This Agreement and the amendment and restatement of the Original Note
Purchase Agreement provided for herein shall only become effective at such time
(the "Effective Date") as all of the following conditions precedent shall have
been satisfied:
Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Effective Date.
Section 4.2. Performance; No Default. The Company shall have performed
and complied with all agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to or on the Effective
Date, and no Default or Event of Default shall exist.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to each
Holder an Officer's Certificate, dated the Effective Date, certifying
that the conditions specified in Sections 4.1 and 4.2 have been
fulfilled.
(b) Intentionally Omitted.
Section 4.4. Guaranty Agreement. The Guaranty Agreement shall be in full
force and effect and each Guarantor shall have delivered to each Holder a
certificate whereby such Guarantor reaffirms its obligations under the Guaranty
Agreement.
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Section 4.5. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the
Effective Date the fees, charges and disbursements of Schiff Hardin & Waite, the
Holders' special counsel and the only counsel retained by the Holders in
connection with the preparation, negotiation, execution and delivery of this
Agreement, to the extent reflected in a statement of such counsel rendered to
the Company at least one Business Day prior to the Effective Date.
Section 4.6. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to the Holders and the Holders' special counsel, and each Holder
and the Holders' special counsel shall have received all such counterpart
originals or certified or other copies of such documents as each Holder or the
Holders' special counsel may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Holder 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 to perform
the provisions hereof and of the Notes.
Section 5.2. Authorization, Etc. This Agreement has been duly authorized
by all necessary corporate action on the part of the Company, and this Agreement
constitutes, and each Note continues to 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 (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
Section 5.3. Disclosure. This Agreement, the documents, certificates or
other writings identified in Schedule 5.3 and the financial statements listed in
Schedule 5.5, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made. Except as expressly described in Schedule 5.3, or in one of the
documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since December 31, 2000, there has
been no adverse Material change in the financial condition, operations,
business, properties or prospects of the Company or any of its Subsidiaries,
taken as a whole.
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Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (1) of the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (2) of the
Company's Affiliates, other than Subsidiaries and (3) of the Company's directors
and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or other
legal entity duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement or instrument (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 own outstanding shares of capital stock or similar
equity interests of such Subsidiary.
Section 5.5. Financial Statements.. The Company has delivered to each
Holder copies of the consolidated financial statements of the Company listed on
Schedule 5.5. All of said financial statements (including in each case the
related schedules and notes) fairly present in all material respects the
consolidated financial position of the 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
and delivery by the Company of this Agreement and the performance by the Company
of this Agreement and the Notes will not (a) contravene, result in any breach
of, or constitute a default under, or result in the creation of any Lien in
respect of any property of the Company or any Subsidiary under, any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate
charter or by-laws, or any other agreement or instrument to which the Company
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or any Subsidiary is bound or by which the Company or any Subsidiary or any of
their respective properties may be bound or affected, (b) conflict with or
result in a breach of any of the terms, conditions or provisions of any order,
judgment, decree, or ruling of any court, arbitrator or Governmental Authority
applicable to the Company or any Subsidiary or (c) violate any provision of any
statute or other rule or regulation of any Governmental Authority applicable to
the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution or delivery by the
Company of this Agreement or the performance by the Company of this Agreement or
the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 5.8, there are no actions, suits or
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including, without limitation, Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed all
income tax returns that are required to have been filed in any jurisdiction, and
have paid all taxes shown to be due and payable on such returns and all other
taxes and assessments payable by them, 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 up to and including the fiscal year ended December 31, 1991 and the
Federal income tax liabilities of the Company and its Subsidiaries have been
paid for all fiscal years up to and including the fiscal year ended December 31,
1999.
Section 5.10. Title to Property; Leases. The Company and its
Subsidiaries have good and sufficient title to their respective properties 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 Subsidiary after said date
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(except as sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.
Section 5.11. Licenses, Permits, Etc. Except as disclosed in Schedule
5.11,
(a) the Company and its Subsidiaries own or possess all Material
licenses, permits, franchises, authorizations, patents, copyrights, service
marks, trademarks and trade names, or rights thereto;
(b) to the best knowledge of the Company, no product of the Company or
any Subsidiary infringes in any material respect any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or other
right with respect thereto owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material violation
by any Person of any right of the Company or any of its Subsidiaries with
respect to any patent, copyright, service mark, trademark, trade name or other
right with respect thereto owned or used by the Company or any of its
Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws in all material respects. Neither the Company nor any ERISA
Affiliate has incurred any Material 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 Material liability by the Company or any ERISA Affiliate,
or in the imposition of any Material 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.
(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 by more than $5,000,000 in the aggregate
for all Plans. The term "benefit liabilities" has the meaning specified in
Section 4001 of ERISA and the terms "current value" and "present value" have the
meanings specified in Section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred Material
withdrawal liabilities (and are not subject to Material contingent withdrawal
liabilities) under Section 4201 or 4204 of ERISA in respect of Multiemployer
Plans.
(d) The expected postretirement benefit obligation (determined as of the
last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting
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Standards Board Statement No. 106, without regard to liabilities attributable
to continuation coverage mandated by Section 4980B of the Code) of the Company
and its Subsidiaries is not Material.
(e) The execution and delivery of the Original Note Purchase Agreement
and the issuance and sale of the Notes under the Original Note Purchase
Agreement, did 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 source of the funds used to pay the purchase price of the Notes purchased
by such Purchaser.
Section 5.13. Intentionally Omitted.
Section 5.14. Intentionally Omitted.
Section 5.15. Existing Debt. Except as described therein, Schedule 5.15
sets forth a complete and correct list of all outstanding Debt of the Company
and its Subsidiaries as of August 1, 2001, since which date there has been no
Material change in the amounts, interest rates, sinking funds, installment
payments or maturities of the Debt of the Company or its Subsidiaries. Neither
the Company nor any Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any Debt of
the Company or such Subsidiary and no event or condition exists with respect to
any Debt of the Company or any Subsidiary that would permit (or that with notice
or the lapse of time, or both, would permit) one or more Persons to cause such
Debt to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
Section 5.16. Existing Investments. Schedule 5.16 sets forth a complete
and correct list of all outstanding Investments of the Company and its
Subsidiaries as of June 30, 2001, since which date there has been no Material
change in the amounts of such Investments.
Section 5.17. Status under Certain Statutes. Neither the Company nor any
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
Subsidiary has knowledge of any Material claim or has received any notice of any
Material claim, and no proceeding has been instituted raising any Material claim
against the Company or any of its Subsidiaries or any of their respective real
properties now or formerly owned, leased or operated by any of them or other
assets, alleging any damage to the environment or violation of any Environmental
Laws. Except as otherwise disclosed in Schedule 5.18:
(a) neither the Company nor any Subsidiary has knowledge of any
facts which would give rise to any Material claim, public or private, or
Material violation of
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Environmental Laws or damage to the environment emanating from,
occurring on or in any way related to real properties now or formerly
owned, leased or operated by any of them or to other assets or their
use;
(b) neither the Company nor any of its Subsidiaries (1) has stored
any Hazardous Materials on real properties now or formerly owned, leased
or operated by any of them or (2) has disposed of any Hazardous
Materials in a manner contrary to any Environmental Laws; in each case
in any manner that could reasonably be expected to result in a Material
Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in material
compliance with applicable Environmental Laws.
Section 5.19. Original Note Purchase Agreement Representations and
Warranties. Each of the representations and warranties of the Company contained
in Section 5 of the Original Note Purchase Agreement was true and correct on and
as of the date of Closing.
SECTION 6. REPRESENTATIONS OF THE HOLDERS.
Section 6.1. Purchase for Investment. Each Holder represents that on the
date of the Closing (or, if such Holder is not a Purchaser, the date it acquired
the Notes) it purchased the Notes presently held by it 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 Holder's or such pension or trust funds'
property shall at all times be within such Holder or such pension or trust
funds' control. Each Holder understands that the Notes have not been registered
under the Securities Act and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is
available, except under circumstances where neither such registration nor such
an exemption is required by law, and that the Company is not required to
register the Notes.
Section 6.2. Source of Funds. Each Holder represents that at the time
of its purchase of Notes presently held by it at least one of the following
statements was an accurate representation as to each source of funds (a
"Source") used by it to pay the purchase price of the Notes purchased by it:
(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, as of the date of the Closing or as of
the date of transfer, as applicable, there is no employee benefit plan,
treating as a single plan, all plans maintained by the same employer or
employee organization or affiliate thereof, 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 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
filed with such Holder's state of domicile; or
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(b) the Source is either (1) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or
(2) a bank collective investment fund, within the meaning of the PTE
91-38 (issued July 12, 1991) and, as of the date of the Closing or as of
the date of transfer, as applicable, except as such Holder 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 or affiliate thereof beneficially owns more than
10% of all assets allocated to such pooled separate account or
collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of
the QPAM Exemption), no employee benefit plan's assets that are included
in such investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same employer or
by an affiliate (within the meaning of Section V(c)(1) of the QPAM
Exemption) of such employer or by the same employee organization and
managed by such QPAM, exceed 20% of the total client assets managed by
such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are
satisfied, neither the QPAM nor a Person controlling or controlled by
the QPAM (applying the definition of "control" in Section V(e) of the
QPAM Exemption) owns a 5% or more interest in the Company and (1) the
identity of such QPAM and (2) the names of all employee benefit plans
whose assets are included in such investment fund have been disclosed to
the Company in writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans,
each of which has been identified to the Company in writing pursuant to
this paragraph (e); or
(f) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
If any subsequent transferee of the Notes indicates that such transferee
is relying on any representation contained in paragraph (b), (c) or (e) above,
the Company shall deliver on the date of transfer a certificate, which shall
state whether (i) it is a party in interest or a "disqualified person" (as
defined in Section 4975(e)(2) of the Internal Revenue Code of 1986, as amended),
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,
whether it or 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 the 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.
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As used in this Section 6.2, the terms "employee benefit plan,"
"governmental plan," "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO COMPANY.
Section 7.1. Financial and Business Information. The Company shall
deliver to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements -- 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,
(1) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(2) consolidated statements of income, stockholders' 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 of,
(1) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(2) consolidated statements of income, stockholders' 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
(i) an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall
state that such financial
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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), and
(ii) a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making their
audit, they have become aware of any condition or event that then
constitutes a Default or an Event of Default, and, if they are aware
that any such condition or event then exists, specifying the nature
and period of the existence thereof (it being understood that such
accountants shall not be liable, directly or indirectly, for any
failure to obtain knowledge of any Default or Event of Default
unless such accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted auditing
standards or did not make such an audit);
(c) SEC and Other Reports -- promptly upon their becoming available,
one copy of (1) each financial statement, report, notice or proxy
statement sent by the Company or any Subsidiary to public Securities
holders generally, (2) each regular or periodic report, each
registration statement that shall have become effective (without
exhibits except as expressly requested by such holder), and each final
prospectus and all amendments thereto filed by the Company or any
Subsidiary with the Securities and Exchange Commission and (3) 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 becoming
aware of the existence of any Default or Event of Default, a written
notice specifying the nature and period of existence thereof and what
action the 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 becoming aware of any of the following,
a written notice setting forth the nature thereof and the action, if
any, that the Company or an ERISA Affiliate proposes to take with
respect thereto:
(1) with respect to any Plan, any reportable event, as defined
in Section 4043(b) of ERISA and the regulations thereunder, for
which notice
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thereof has not been waived pursuant to such regulations as in
effect on the date hereof; or
(2) 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
(3) any event, transaction or condition that could result in the
incurrence of any liability by the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties or assets of
the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or such penalty or excise tax provisions, if such liability or
Lien, taken together with any other such liabilities or Liens then
existing, would exceed $5,000,000 in the aggregate;
(f) Notices from Governmental Authority -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect;
(g) Rule 144A -- except at such times as the Company is a reporting
company under Section 13 or 15(d) of the Exchange Act or has complied
with the requirements for the exemption from registration under the
Exchange Act set forth in Rule 12g3-2(b) under the Exchange Act, such
financial or other information as any holder of Notes or any Person
designated by such holder may reasonably determine is required to permit
such holder to comply with the requirements of Rule 144A promulgated
under the Exchange Act in connection with the resale by it of the Notes,
in any such case promptly after the same is requested; 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.
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
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requirements of Section 10.2 through Section 10.5 hereof, inclusive,
Section 10.8 and Section 10.10 during the quarterly or annual period
covered by the statements then being furnished (including with respect
to each such Section, where applicable, the calculations of the maximum
or minimum amount, ratio or percentage, as the case may be, permissible
under the terms of such Sections, and the calculation of the amount,
ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has reviewed
the relevant terms hereof and has made, or caused to be made, under his
or her supervision, a review of the transactions and conditions of the
Company and its Subsidiaries from the beginning of the quarterly or
annual period covered by the statements then being furnished to the date
of the certificate and that such review shall not have disclosed the
existence during such period of any condition or event that constitutes
a Default or an Event of Default or, if any such condition or event
existed or exists (including, without limitation, any such event or
condition resulting from the failure of the Company or any Subsidiary to
comply with any Environmental Law), specifying the nature and period of
existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives of
each holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the
Company, to visit the principal executive office of the Company, to
discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and, with the consent of the
Company (which consent will not be unreasonably withheld) to visit the
other offices and properties of the Company and each Subsidiary, all at
such reasonable times and as often as may be reasonably requested in
writing; and
(b) Default -- if a Default or Event of Default then exists, at the
expense of the Company, to visit and inspect any of the offices or
properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the Company
and its Subsidiaries), all at such times and as often as may be
requested.
SECTION 8. PREPAYMENT OF THE NOTES.
Section 8.1. Required Prepayments. On March 15, 2002 and on each
March 15 thereafter to and including March 15, 2009 the Company will prepay
$6,666,666 principal amount (or such lesser principal amount as shall then be
outstanding) of the Notes at par and without payment of the Make-Whole Amount or
any premium, provided that upon any partial prepayment of the Notes pursuant to
Section 8.2 or purchase of the Notes permitted by
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Section 8.5 the principal amount of each required prepayment of the Notes
becoming due under this Section 8.1 on and after the date of such prepayment or
purchase shall be reduced in the same proportion as the aggregate unpaid
principal amount of the Notes is reduced as a result of such prepayment or
purchase.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, in an amount not less than $1,000,000
in the case of a partial prepayment, at 100% of the principal amount so prepaid,
together with interest accrued thereon to the date of such prepayment, plus the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount. The Company will give each holder of Notes written notice of
each optional prepayment under this Section 8.2 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each such notice
shall specify such date, the aggregate principal amount of the Notes to be
prepaid on such date, the principal amount of each Note held by such holder to
be prepaid (determined in accordance with Section 8.3), and the interest to be
paid on the prepayment date with respect to such principal amount being prepaid,
and shall be accompanied by a certificate of a Senior Financial Officer as to
the estimated Make-Whole Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the prepayment),
setting forth the details of such computation. Five Business Days prior to such
prepayment, the Company shall deliver to each holder of Notes a certificate of a
Senior Financial Officer (the "Make-Whole Amount Calculation Certificate")
specifying the method of computation and the calculation of such Make-Whole
Amount in respect of such holder's Notes as of the specified prepayment date.
The method of computation of the Make-Whole Amount in respect of the Notes set
forth in the Make-Whole Amount Calculation Certificate shall be subject to the
review and approval of the holders of the Notes and, in the case of any
disagreement between the Required Holders and the Company with respect to such
method of computation, the conclusion of the Required Holders shall, in the
absence of manifest error, be deemed binding and conclusive. The calculation of
the Make-Whole Amount in respect of the Note or Notes set forth in a Make-Whole
Amount Calculation Certificate shall also be subject to the review and approval
of the holder of such Note or Notes and, in the case of any disagreement between
such holder and the Company with respect to such calculation, the conclusion of
such holder shall, in the absence of manifest error, be deemed binding and
conclusive. It is understood and agreed that the failure of any holder to
respond to the Make-Whole Amount Calculation Certificate in respect of its Notes
by the date fixed for prepayment shall be deemed to be a concurrence by such
holder to the method of computation and the calculation of the Make-Whole Amount
in respect of such Notes.
Section 8.3. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes, the principal amount of the Notes to be prepaid
shall be allocated among all of the Notes at the time outstanding in proportion,
as nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment.
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, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and
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payable, together with the interest and Make-Whole Amount, 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 in accordance with the terms of this Agreement and the
Notes or (b) pursuant to an offer to purchase made by the Company or an
Affiliate pro rata to the holders of all Notes at the time outstanding upon the
same terms and conditions. Any such offer shall provide each holder with
sufficient information to enable it to make an informed decision with respect to
such offer, and shall remain open for at least 30 Business Days. If the holders
of more than 10% of the principal amount of the Notes then outstanding accept
such offer, the Company shall promptly notify the remaining holders of such fact
and the expiration date for the acceptance by holders of Notes of such offer
shall be extended by the number of days necessary to give each such remaining
holder at least 30 Business Days from its receipt of such notice to accept such
offer. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
Section 8.6. Make-Whole Amount. The term "Make-Whole Amount" means, with
respect to any Note, an amount equal to the excess, if any, of the Discounted
Value of the Remaining Scheduled Payments with respect to the Called Principal
of such Note over the amount of such Called Principal, provided that the
Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"Discounted Value" shall mean, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called
Principal of any Note, .50% over the yield to maturity implied by (a)
the yields reported, as of 10:00 a.m. (New York City time) on the fifth
Business Day preceding the Settlement Date with respect to such Called
Principal, on the applicable "PX" page of the Bloomberg Financial Market
Service's Screen (or such other page as may replace the applicable PX
page of the Bloomberg Financial Market Service's Screen) for actively
traded U.S. Treasury Securities having a maturity equal to the Remaining
Average Life of such Called
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Principal as of such Settlement Date, or (b) 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
fifth 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 in clauses (a) and (b) above will be determined, if necessary, by
(1) converting U.S. Treasury bill quotations to bond-equivalent yields
in accordance with accepted financial practice and (2) interpolating
linearly between (i) the actively traded U.S. Treasury Security with the
maturity closest to and greater than the Remaining Average Life and (ii)
the actively traded U.S. Treasury Security with the maturity closest to
and less than the Remaining Average Life.
"Remaining Average Life" shall mean, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (a) such Called Principal into (b) the sum of
the products obtained by multiplying (1) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (2)
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" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on such
Settlement Date pursuant to Section 8.2 or 12.1.
"Settlement Date" shall mean, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
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
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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 reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect.
Section 9.2. Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
Section 9.3. Maintenance of Properties. The Company will, and will cause
each of its Subsidiaries to, maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times, provided that this
Section shall not prevent the Company or any 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 reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will, and will
cause each of its Subsidiaries to, file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Company
or any Subsidiary, provided that neither the Company nor any Subsidiary need pay
any such tax or assessment or claims if (a) 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 (b) the nonpayment of any such
taxes or assessments could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
Section 9.5. Corporate Existence, Etc. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Sections 10.7, 10.8 and 10.9, the Company will at all times preserve and keep in
full force and effect the corporate existence of each of its Subsidiaries
(unless merged into the Company or a Wholly-Owned Subsidiary) and all rights and
franchises of the Company and its 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 would not,
individually or in the aggregate, have a Material Adverse Effect.
Section 9.6. Guaranty Agreement. (a) (1) The Company shall promptly, and
in any event within three Business Days after (i) a Subsidiary becomes a
Material Subsidiary, (ii) the formation or acquisition of a new Subsidiary that
is a Material Subsidiary or (iii) the occurrence
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of any other event creating a new Subsidiary that is a Material Subsidiary,
cause such Material Subsidiary to execute and deliver a supplement to the
Guaranty Agreement in the form of Exhibit A to the Guaranty Agreement.
(2) Within ten Business Days of any Material Subsidiary being required
to execute and deliver a supplement to the Guaranty Agreement pursuant to
Section 9.6(a)(1), the Company shall cause such Material Subsidiary to deliver
to each holder of Notes (i) such documents and evidence with respect to such
Material Subsidiary as any holder may reasonably request in order to establish
the existence and good standing of such Material Subsidiary and evidence that
the Board of Directors of such Material Subsidiary has adopted resolutions
authorizing the execution and delivery of a supplement to the Guaranty
Agreement, (ii) evidence of compliance with such Material Subsidiary's
outstanding debt instruments in the form of (A) a compliance certificate from
such Material Subsidiary to the effect that such Material Subsidiary has
complied with all terms and conditions of its outstanding debt instruments, (B)
consents or approvals of the holder or holders of any evidence of Debt or
Security, and/or (C) amendments of agreements pursuant to which any evidence of
Debt or Security may have been issued, all as may be reasonably deemed necessary
by the holders of Notes to permit the execution and delivery of a supplement to
the Guaranty Agreement by such Material Subsidiary, (iii) an opinion of counsel
to the effect that (A) such Material Subsidiary is a corporation or other
business entity, duly organized, validly existing and in good standing, if
applicable, under the laws of its jurisdiction of organization, has the power
and the authority to execute and deliver a supplement to the Guaranty Agreement
and to perform the Guaranty Agreement, (B) the execution and delivery of a
supplement to the Guaranty Agreement and performance of the Guaranty Agreement
has been duly authorized by all necessary action on the part of such Material
Subsidiary, a supplement to the Guaranty Agreement has been duly executed and
delivered by such Material Subsidiary and the Guaranty Agreement constitutes the
legal, valid and binding contract of such Material Subsidiary enforceable
against such Material Subsidiary in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors' rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law), (C) the execution and delivery of a supplement to the
Guaranty Agreement and the performance by such Material Subsidiary of the
Guaranty 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 of a Lien
upon any of the property of such Material Subsidiary pursuant to the provisions
of its charter documents or any agreement or other instrument known to such
counsel to which such Material Subsidiary is a party to or by which such
Material Subsidiary may be bound and (D) 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 lawful
execution and delivery of a supplement to the Guaranty Agreement by such
Material Subsidiary or the performance of the Guaranty Agreement by such
Material Subsidiary, which opinion may contain such assumptions and
qualifications as are reasonably acceptable to the Required Holders, and (iv)
all other documents and showings reasonably requested by the holders of Notes in
connection with the execution and delivery of a supplement to the Guaranty
Agreement, which documents shall be satisfactory in form and substance to such
holders and their special counsel, and each holder of Notes shall have received
a copy (executed or certified as may be appropriate) of all of the foregoing
legal documents.
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(b) If at any time, pursuant to the terms and conditions of the Bank
Credit Agreement, any Guarantor is released from its liability under the Bank
Guaranty and (1) such Guarantor is not a co-obligor under the Bank Credit
Agreement, (2) such Guarantor does not qualify as a Material Subsidiary under
clause (a) or (b) of the definition thereof and (3) the Company shall have
delivered to each holder of Notes an Officer's Certificate certifying that (i)
the conditions specified in clauses (1) and (2) above have been satisfied and
(ii) immediately preceding the release of such Guarantor from the Guaranty
Agreement and after giving effect thereto, no Default or Event of Default shall
have existed or would exist, then, upon receipt by the holders of Notes of such
Officer's Certificate, such Guarantor shall be discharged from its obligations
under the Guaranty Agreement.
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Nature of Business. The Company will not, and will not
permit any Subsidiary to, engage in any business if, as a result thereof, the
general nature of the business, taken on a consolidated basis, which would then
be engaged in by the Company and its Subsidiaries would be substantially changed
from the general nature of the business engaged in by the Company and its
Subsidiaries on the date of the Closing.
Section 10.2. Consolidated Net Worth. The Company will not, at any time,
permit Consolidated Net Worth to be less than the sum of (a) $275,000,000, plus
(b) an aggregate amount equal to 50% of its Consolidated Net Income (but, in
each case, only if a positive number) for each completed fiscal quarter
beginning with the fiscal quarter ended December 31, 2000.
Section 10.3. Incurrence of Debt. The Company will not, and will not
permit any Subsidiary to, directly or indirectly, create, incur, assume,
guarantee, or otherwise become directly or indirectly liable with respect to,
any Debt, unless on the date the Company or such Subsidiary becomes liable with
respect to any such Debt and immediately after giving effect thereto and the
concurrent retirement of any other Debt,
(a) no Default or Event of Default exists, and
(b) Consolidated Total Debt does not exceed 55% of Consolidated
Total Capitalization.
For the purposes of this Section 10.3, any Person becoming a Subsidiary after
the date of the Closing shall be deemed, at the time it becomes a Subsidiary, to
have incurred all of its then outstanding Debt, and any Person extending,
renewing or refunding any Debt shall be deemed to have incurred such Debt at the
time of such extension, renewal or refunding.
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Section 10.4. Subsidiary Debt. The Company will not at any time permit
any Subsidiary to, directly or indirectly, create, incur, assume, guarantee,
have outstanding, or otherwise become or remain directly or indirectly liable
with respect to, any Debt other than:
(a) Debt of a Subsidiary (1) outstanding on the date of the Closing
and disclosed in Schedule 5.15 to the Original Note Purchase Agreement,
provided that such Debt may not be extended, renewed or refunded except
as otherwise permitted by this Agreement and (2) outstanding pursuant to
the Guaranty Agreement;
(b) Debt of a Subsidiary owed to the Company or a Wholly-Owned
Subsidiary;
(c) Debt of a Subsidiary outstanding at the time such Subsidiary
becomes a Subsidiary, provided that (1) such Debt shall not have been
incurred in contemplation of such Subsidiary becoming a Subsidiary and
(2) immediately after such Subsidiary becomes a Subsidiary no Default or
Event of Default would exist, and provided, further, that such Debt may
not be extended, renewed or refunded except as otherwise permitted by
this Agreement; and
(d) Debt of a Subsidiary in addition to that otherwise permitted by
the foregoing provisions of this Section 10.4, provided that on the date
the Subsidiary incurs or otherwise becomes liable with respect to any
such additional Debt and immediately after giving effect thereto and the
concurrent retirement of any other Debt,
(1) no Default or Event of Default exists, and
(2) Priority Debt does not exceed 20% of Consolidated Net Worth
determined at such time.
Section 10.5. Liens. The Company will not, and will not permit any of
its 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 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, except:
(a) Liens for taxes, assessments or other governmental charges which
are not yet due and payable or the payment of which is not at the time
required by Section 9.4;
(b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens, in each
case, incurred in the ordinary course of business for sums not yet due
and payable;
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(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (1) in connection with
workers' compensation, unemployment insurance and other types of social
security or retirement benefits, or (2) to secure (or to obtain letters
of credit that secure) the performance of tenders, statutory
obligations, surety bonds, appeal bonds, bids, leases (other than
Capital Leases), performance bonds, purchase, construction or sales
contracts and other similar obligations, in each case not incurred or
made in connection with the borrowing of money, the obtaining of
advances or credit or the payment of the deferred purchase price of
property;
(d) any attachment or judgment Lien, unless the judgment it secures
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;
(e) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, in each case
incidental to, and not interfering with, the ordinary conduct of the
business of the Company or any of its Subsidiaries, provided that such
Liens do not, in the aggregate, materially detract from the value of
such property;
(f) Liens on property or assets of the Company or any of its
Subsidiaries securing Debt owing to the Company or to a Wholly-Owned
Subsidiary;
(g) Liens existing on the date of the Closing and securing the Debt
of the Company and its Subsidiaries referred to on Schedule 5.15 to the
Original Note Purchase Agreement;
(h) any Lien created to secure all or any part of the purchase
price, or to secure Debt incurred or assumed to pay all or any part of
the purchase price or cost of construction, of property acquired or
constructed by the Company or a Subsidiary after the date of the
Closing, provided that
(1) any such Lien shall extend solely to the item or items of
such property so acquired or constructed,
(2) the principal amount of the Debt secured by any such Lien
shall at no time exceed an amount equal to the lesser of (i) the
cost to the Company or such Subsidiary of the property so acquired
or constructed and (ii) the Fair Market Value (as determined in good
faith by the Board of Directors of the Company) of such property at
the time of such acquisition or construction,
(3) any such Lien shall be created contemporaneously with, or
within 180 days after, the acquisition or construction of such
property, and
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(4) immediately after giving effect the creation of such Lien
and giving effect thereto, (i) no Default or Event of Default would
exist and (ii) the Company would be permitted by the provisions of
Section 10.3(b) to incur at least $1.00 of additional Debt;
(i) any Lien existing on property of a Person immediately prior to
its being consolidated with or merged into the Company or a Subsidiary,
or any Lien existing on any property acquired by the Company or any
Subsidiary at the time such property is so acquired (whether or not the
Debt secured thereby shall have been assumed), provided that (1) no such
Lien shall have been created or assumed in contemplation of such
consolidation or merger or such acquisition of property, (2) each such
Lien shall extend solely to the item or items of property so acquired
and (3) immediately after giving effect to the acquisition of the
property subject to such Lien and giving effect thereto, (i) no Default
or Event of Default would exist and (ii) the Company would be permitted
by the provisions of Section 10.3(b) to incur at least $1.00 of
additional Debt;
(j) any Lien renewing, extending or refunding any Lien permitted by
paragraphs (g), (h) or (i) of this Section 10.5, provided that (1) the
principal amount of Debt secured by such Lien immediately prior to such
extension, renewal or refunding is not increased or the maturity thereof
reduced, (2) such Lien is not extended to any other property and (3)
immediately after such extension, renewal or refunding no Default or
Event of Default would exist; and
(k) other Liens not otherwise permitted by paragraphs (a) through
(i), provided that, after giving effect thereto and to the application
of the proceeds of any Debt secured thereby, Priority Debt does not
exceed 20% of Consolidated Net Worth determined at such time.
For the purposes of this Section 10.5, any Person becoming a Subsidiary
after the date of the Closing shall be deemed to have incurred all of its then
outstanding Liens at the time it becomes a Subsidiary, and any Person extending,
renewing or refunding any Debt secured by any Lien shall be deemed to have
incurred such Lien at the time of such extension, renewal or refunding.
Section 10.6. Restrictions on Dividends of Subsidiaries, Etc. The
Company will not, and will not permit any of its Subsidiaries to, enter into any
agreement which would restrict any Subsidiary's ability or right to pay
dividends to, or make advances to or Investments in, the Company or, if such
Subsidiary is not directly owned by the Company, the "parent" Subsidiary of such
Subsidiary.
Section 10.7. Mergers, Consolidations, Etc. The Company will not, and
will not permit any Subsidiary to, consolidate with or merge with any other
corporation or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to any Person; provided that the
foregoing restriction does not apply to:
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(a) the consolidation or merger of a Subsidiary with, or the
conveyance, transfer or lease of substantially all of the assets of a
Subsidiary to, the Company or a Wholly-Owned Subsidiary; or
(b) the consolidation or merger of a Subsidiary with any Person
other than the Company or a Wholly-Owned Subsidiary; provided that such
Subsidiary shall be the surviving Person and immediately after giving
effect to such transaction (1) no Default or Event of the Default would
exist, (2) the Company would be permitted by the provisions of Section
10.3(b) to incur at least $1.00 of additional Debt, (3) such Subsidiary
would be permitted by the provisions of Section 10.4(d)(2) to incur at
least $1.00 of additional Priority Debt and (4) the Company shall own
the same percentage of the equity or voting interests in such Subsidiary
as the Company owned in such Subsidiary immediately preceding such
transaction; or
(c) the conveyance, transfer or lease of all of the assets of a
Subsidiary to a Person other than the Company or a Wholly-Owned
Subsidiary in compliance with the provisions of Section 10.8 and Section
10.9; or
(d) 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:
(1) 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;
(2) if the Company is not the Successor Corporation, (i) such
corporation shall have executed and delivered to each holder of the
Notes its assumption of the due and punctual performance and
observance of each covenant and condition of this Agreement and the
Notes (pursuant to such agreements and instruments as shall be
reasonably satisfactory to the Required Holders), (ii) the Company
shall have caused to be delivered to each holder of the Notes an
opinion of nationally recognized independent counsel, or other
independent counsel reasonably satisfactory to the Required Holders,
to the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and comply
with the terms hereof and (iii) each Guarantor shall have delivered
to each holder of the Notes a certificate whereby such Guarantor
shall have reaffirmed its obligations under the Guaranty Agreement;
and
(3) immediately after giving effect to such transaction (i) no
Default or Event of Default would exist and (ii) the Successor
Corporation would be
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permitted by the provisions of Section 10.3(b) to incur at least
$1.00 of additional Debt.
No such conveyance, transfer or lease of substantially all of the assets
of the Company shall have the effect of releasing the Company or any Successor
Corporation from its liability under this Agreement or the Notes.
Section 10.8. Sale of Assets, Etc. Except as permitted under Section
10.7, Section 10.9 and Section 10.10, the Company will not, and will not permit
any Subsidiary to, make any Asset Disposition unless:
(a) in the good faith opinion of the Company, the Asset Disposition
is in exchange for consideration having a Fair Market Value at least
equal to that of the property exchanged and is in the best interest of
the Company or such Subsidiary;
(b) immediately after giving effect to the Asset Disposition, no
Default or Event of Default would exist; and
(c) immediately after giving effect to the Asset Disposition, the
Disposition Value of all property that was the subject of any Asset
Disposition occurring during the immediately preceding 12 consecutive
calendar month period would not exceed 15% of Consolidated Total Assets
determined as of the end of the then most recently ended fiscal year of
the Company.
If the Net Proceeds Amount for any Transfer is applied to a Debt
Prepayment Application or a Property Reinvestment Application within 180 days
after such Transfer, then such Transfer, only for the purpose of determining
compliance with subsection (c) of this Section 10.8 as of any date on or after
the Net Proceeds Amount is so applied, shall be deemed not to be an Asset
Disposition.
Section 10.9. Disposal of Ownership of a Subsidiary. The Company will
not, and will not permit any Subsidiary to, sell or otherwise dispose of any
shares of Subsidiary Stock, nor will the Company permit any such Subsidiary to
issue, sell or otherwise dispose of any shares of its own Subsidiary Stock,
provided that the foregoing restrictions do not apply to:
(a) the issue of directors' qualifying shares by any such
Subsidiary;
(b) any such Transfer of Subsidiary Stock constituting a Transfer
described in clause (a) of the definition of "Asset Disposition"; and
(c) the Transfer of all of the Subsidiary Stock of a Subsidiary
owned by the Company and its other Subsidiaries if:
(1) such Transfer satisfies the requirements of Section 10.8
hereof,
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(2) in connection with such Transfer the entire Investment
(whether represented by stock, Debt, claims or otherwise) of the
Company and its other Subsidiaries in such Subsidiary is sold,
transferred or otherwise disposed of to a Person other than (i) the
Company, (ii) another Subsidiary not being simultaneously disposed
of or (iii) an Affiliate, and
(3) the Subsidiary being disposed of has no continuing
Investment in any other Subsidiary of the Company not being
simultaneously disposed of or in the Company.
Section 10.10. Sale-and-Leasebacks. The Company will not, and will not
permit any Subsidiary to, enter into any Sale-and-Leaseback Transaction unless,
(a) the lease which is the subject of such Sale-and-Leaseback Transaction is not
a Long-Term Lease or (b) immediately after giving effect to such
Sale-and-Leaseback Transaction, the aggregate amount of Priority Debt does not
exceed 20% of Consolidated Net Worth determined at such time.
Section 10.11. Transactions with Affiliates. The Company will not, and
will not permit any 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 Subsidiary), except upon fair and reasonable terms no less favorable
to the Company or such Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate.
SECTION 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any Note
for more than five Business Days after the same becomes due and payable;
or
(c) the Company defaults in the performance of or compliance with
any term contained in Sections 10.1 through 10.4, inclusive, or Sections
10.6 through 10.11, inclusive; or
(d) the Company defaults in the performance of or compliance with
any term contained herein (other than those referred to in paragraphs
(a), (b) and (c) of this Section 11) and such default is not remedied
within 30 days after the earlier of (1) a Responsible Officer obtaining
actual knowledge of such default and (2) the Company receiving written
notice of such default from any holder of a Note (any such written
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notice to be identified as a "notice of default" and to refer
specifically to this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or on behalf
of the Company or any Guarantor or by any officer of the Company or any
Guarantor in this Agreement or in the Guaranty Agreement, respectively,
or in any writing furnished in connection with the transactions
contemplated hereby or thereby proves to have been false or incorrect in
any material respect on the date as of which made; or
(f) (1) the Company or any Subsidiary is in default (as principal or
as guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest on any Debt that is outstanding
in an aggregate principal amount of at least $10,000,000 beyond any
period of grace provided with respect thereto, or (2) the Company or any
Subsidiary is in default in the performance of or compliance with any
term of any evidence of any Debt in an aggregate outstanding principal
amount of at least $10,000,000 or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a
consequence of such default or condition such Debt has become, or has
been declared due and payable before its stated maturity or before its
regularly scheduled dates of payment or (3) 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), (i) the Company or any Subsidiary has become
obligated to purchase or repay Debt before its regular maturity or
before its regularly scheduled dates of payment in an aggregate
outstanding principal amount of at least $10,000,000 or (ii) one or more
Persons have the right to require the Company or any Subsidiary so to
purchase or repay such Debt; or
(g) the Company or any Subsidiary (1) is generally not paying, or
admits in writing its inability to pay, its debts as they become due,
(2) 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, (3) makes an assignment for the benefit of its
creditors, (4) 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, (5) is adjudicated as
insolvent or to be liquidated or (6) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Subsidiaries, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company or any of its Subsidiaries, or
any such petition shall be filed against the Company or any of its
Subsidiaries and such petition shall not be dismissed within 60 days; or
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(i) a final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 are rendered against one or more of
the Company and its Subsidiaries and which judgments are not fully
covered by insurance or, within 60 days after entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within 60
days after the expiration of such stay; or
(j) If (1) 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, (2) a notice of intent
to terminate any Plan shall have been or is reasonably expected to be
filed with the PBGC or the PBGC shall have instituted proceedings under
ERISA Section 4042 to terminate or appoint a trustee to administer any
Plan or the PBGC shall have notified the Company or any ERISA Affiliate
that a Plan may become a subject of any such proceedings, (3) 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, (4) 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, (5) the Company or any ERISA Affiliate withdraws from any
Multiemployer Plan or (6) the Company or any ERISA Affiliate establishes
or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the
liability of the Company or any ERISA Affiliate thereunder; and any such
event or events described in clauses (1) through (6) above, either
individually or together with any other such event or events, would
reasonably be expected to have a Material Adverse Effect; or
(k) (1) default shall occur under the Guaranty Agreement and such
default shall continue beyond the period of grace, if any, allowed with
respect thereto or (2) the Guaranty Agreement shall cease to be in full
force and effect for any reason whatsoever, including, without
limitation, a determination by any Governmental Authority or court that
such agreement is invalid, void or unenforceable or any Guarantor shall
contest or deny in writing the validity or enforceability of any of its
obligations under the Guaranty Agreement.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration. (a) If an Event of Default with respect to
the Company described in paragraph (g) or (h) of Section 11 (other than an Event
of Default described in clause (1) of paragraph (g) or described in clause (6)
of paragraph (g) by virtue of the fact that such clause encompasses clause (1)
of paragraph (g)) exists, all the Notes then outstanding shall automatically
become immediately due and payable.
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(b) If any other Event of Default exists, any holder or holders of more
than 25% in principal amount of the Notes at the time outstanding may at any
time at its or their option, by notice or notices to the Company, declare all
the Notes then outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of Section
11 exists, any holder or holders of Notes at the time outstanding affected by
such Event of Default may at any time, at its or their option, by notice or
notices to the Company, declare all the Notes held by it or them to be
immediately due and payable.
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 (1) all accrued and unpaid
interest thereon and (2) the Make-Whole Amount determined in respect of such
principal amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Event of Default exists, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been declared
due and payable pursuant to clause (b) or (c) of Section 12.1, the holders of
not less than 76% in principal amount of the Notes then outstanding, by written
notice to the Company, may rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 17 and (c)
no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this Section
12.3 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or
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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 writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes (as requested by the holder
thereof) in exchange therefor, in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of Exhibit 1. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid thereon.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $1,000,000, 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 $1,000,000. 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, however, that, such transferee will not be deemed to have
chosen the options set forth in Section 6.2(b), (c) or (e) unless such
transferee shall have made the disclosures referred to therein at least five
Business Days prior to its acceptance of such Note and shall have received prior
to such acceptance of such Note the certificate provided for in the penultimate
paragraph of Section 6.2 and such certificate shall contain the statement set
forth in either Section 4.3(c)(1) or (2), as applicable; and provided, further,
that, such transferee will not be deemed to have chosen an option set forth in
Section 6.2(a), (b) or (d) unless the applicable Class Exemption referred to
therein remains in
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effect at that time or another similar Class Exemption is then available. The
Company shall exercise reasonable due diligence as is necessary to respond to
any such disclosure, provided that, if the Company shall not respond within five
Business Days following receipt of any such disclosure, it shall be deemed to
have made the statement set forth in either Section 4.3(c)(1) or (2), as
applicable.
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, in
lieu thereof, a new Note, 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.
SECTION 14. PAYMENTS ON NOTES.
Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Chicago, Illinois at the principal office of Bank of
America 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 Holder or such
Holder'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, if any, and
interest by the method and at the address specified for such purpose for such
Holder on Schedule A, or by such other method or at such other address as such
Holder 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 Holder 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 Holder or such Holder's nominee such Holder will, at its election,
either endorse thereon the amount of
-30-
principal paid thereon and the last date to which interest has been paid thereon
or surrender such Note to the Company in exchange for a new Note or Notes
pursuant to Section 13.2. The Company will afford the benefits of this Section
14.2 to any Institutional Investor that is the direct or indirect transferee of
any Note purchased by any Holder under this Agreement and that has made the same
agreement relating to such Note as such Holder has made in this Section 14.2.
SECTION 15. EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required, local or other counsel) incurred by each Holder or 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, the Guaranty
Agreement or the Notes (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend)
any rights under this Agreement, the Guaranty Agreement or the Notes or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement, the Guaranty Agreement or the
Notes, or by reason of being a holder of any Note or a beneficiary of the
Guaranty Agreement, and (b) the 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, by the Guaranty Agreement and by the
Notes. The Company will pay, and will save each Holder and each other holder of
a Note harmless from, all claims in respect of any fees, costs or expenses if
any, of brokers and finders (other than those retained by such Holder or
holder).
Section 15.2. Survival. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by any Holder of any Note or portion thereof or interest therein and the payment
of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of such Holder
or any other holder of a Note. All statements contained in any certificate or
other instrument delivered by or on behalf of the Company pursuant to this
Agreement shall be deemed representations and warranties of the Company under
this Agreement. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between each Holder and the
Company and supersede all prior agreements and understandings relating to the
subject matter hereof.
-31-
SECTION 17. AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to any Holder unless consented to
by such Purchaser in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding affected
thereby, (1) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (2) change the percentage of
the principal amount of the Notes the holders of which are required to consent
to any such amendment or waiver or (3) amend any of Sections 8, 11(a), 11(b),
12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause to
be paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security, to any holder of Notes as consideration
for or as an inducement to the entering into by any holder of Notes of any
waiver or amendment of any of the terms and provisions hereof 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.
-32-
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.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(1) if to a Holder or such Holder's nominee, to such Holder or such
Holder's nominee at the address specified for such communications in
Schedule A, or at such other address as such Holder or such Holder's
nominee shall have specified to the Company in writing,
(2) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(3) if to the Company, to the Company at its address set forth at
the beginning hereof to the attention of Chief Financial Officer, or at
such other address as the Company shall have specified to the holder of
each Note in writing.
Notwithstanding the foregoing, in the case of communications
required to be delivered pursuant to Section 7.1(c)(3), the Company may
provide notice by electronic mail, provided that the recipient of such
communication shall have previously provided the Company with an
electronic mail address for such purpose.
Notices under this Section 18 will be deemed given only when actually received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating hereto, 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 Holder, may be reproduced
by such Holder by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and such Holder 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
-33-
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by such Holder in the regular course
of business) and any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence. This Section 19 shall not
prohibit the Company or any other holder of Notes from contesting any such
reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to any Holder 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
Holder 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 Holder prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such Holder or
any Person acting on such Holder's behalf, (c) otherwise becomes known to such
Holder other than through disclosure by the Company or any Subsidiary or (d)
constitutes financial statements delivered to such Holder under Section 7.1 that
are otherwise publicly available. Each Holder will maintain the confidentiality
of such Confidential Information in accordance with procedures adopted by such
Holder in good faith to protect confidential information of third parties
delivered to such Holder, provided that such Holder may deliver or disclose
Confidential Information to (1) such Holder's directors, trustees, officers,
employees, agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment represented by such
Holder's Notes), (2) such Holder'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, (3) any other
holder of any Note, (4) any Institutional Investor to which such Holder 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), (5) any Person
from which such Holder 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), (6) any Federal
or state regulatory authority having jurisdiction over such Holder, (7) the
National Association of Insurance Commissioners or any similar organization, or
any nationally recognized rating agency that requires access to information
about such Holder's investment portfolio or (8) any other Person to which such
delivery or disclosure may be necessary or appropriate (i) to effect compliance
with any law, rule, regulation or order applicable to such Holder, (ii) in
response to any subpoena or other legal process, (iii) in connection with any
litigation to which such Holder is a party or (iv) if an Event of Default has
occurred and is continuing, to the extent such Holder 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 Holder'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
-34-
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.
SECTION 21. INTENTIONALLY OMITTED.
SECTION 22. MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 22.4. Construction. (a) 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.
(b) Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, the same shall be done in accordance with GAAP, to the extent
applicable, except where such principles are inconsistent with the requirements
of this Agreement.
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.
-35-
Section 22.6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of Illinois excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State.
* * * * *
-36-
The execution hereof by the Holders shall constitute a contract among
the Company and the Holders 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,
GRANITE CONSTRUCTION
INCORPORATED
By /s/ R.C. Allbritton
----------------------------
Its R.C. Allbritton
Vice President
By /s/ James H. Roberts
----------------------------
Its James H. Roberts
Vice President
-37-
Accepted as of the date first written above:
ALLSTATE LIFE INSURANCE COMPANY
By /s/ Rhonda L. Hopps
-----------------------------
Name: RHONDA L. HOPPS
By /s/ Patricia W. Wilson
-----------------------------
Name: PATRICIA W. WILSON
Authorized Signatories
-38-
Accepted as of the date first written above:
UNITED OF OMAHA LIFE INSURANCE COMPANY
By /s/ Edwin H. Garrison Jr.
-------------------------------------
Its EDWIN H. GARRISON JR.
FIRST VICE PRESIDENT
-39-
Accepted as of the date first written above:
MUTUAL OF OMAHA INSURANCE COMPANY
By /s/ Edwin H. Garrison Jr.
-------------------------------------
Its EDWIN H. GARRISON JR.
FIRST VICE PRESIDENT
-40-
Accepted as of the date first written above:
COMPANION LIFE INSURANCE COMPANY
By
----------------------------------
Its
-41-
Accepted as of the date first written above:
LUTHERAN BROTHERHOOD
By /s/ Keri L. Reich
----------------------------
Its Portfolio Manager
-42-
Accepted as of the date first written above:
NATIONWIDE LIFE INSURANCE
COMPANY
By
-------------------------------
Its
-43-
Accepted as of the date first written above:
AMERICAN UNITED LIFE INSURANCE COMPANY
By /s/ Christopher D. Parker
-----------------------------
Its Vice President
-44-
PRINCIPAL AMOUNT OF NOTES HELD
$10,000,000
NAMES OF HOLDER $ 7,000,000
$ 5,000,000
ALLSTATE LIFE INSURANCE COMPANY
3075 Sanders Road, STE G5D
Northbrook, Illinois 60062-7127
Attention: Private Placements Department
Telecopier Number: (847) 402-3092
Telephone Number: (847) 402-2769
Payments
All payments on or in respect of the Notes to be made by Fedwire transfer of
immediately available funds (identifying each payment with name of the Issuer,
the Private Placement Number preceded by "DPP" and the payment as principal,
interest or premium) in the exact format as follows:
BBK = Harris Trust and Savings Bank
ABA #071000288
BNF = Allstate Life Insurance Company
Collection Account #168-117-0
ORG = Granite Construction Incorporated
OBI = DPP - 387328 A* 8 --
Payment Due Date (MM/DD/YY) --
P ______ (enter "P" and the amount of principal being remitted,
for example, P5000000.00) --
I ______ (enter "I" and the amount of interest being remitted,
for example, I225000.00)
Notices
All notices of scheduled payments and written confirmation of each such payment,
to be addressed:
Allstate Insurance Company
Investment Operations--Private Placements
3075 Sanders Road, STE G4A
Northbrook, Illinois 60062-7127
Telephone: (847) 402-2769
Telecopy: (847) 326-5040
All financial reports, compliance certificates and all other written
communications, including notice of prepayments to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 36-2554642
SCHEDULE A
(to Amended and Restated Note Purchase Agreement)
PRINCIPAL AMOUNT OF
NOTES HELD
NAMES OF HOLDER $10,000,000
UNITED OF OMAHA LIFE INSURANCE COMPANY
Mutual of Omaha Plaza
Omaha, Nebraska 68175-1011
Attention: Investment Division/Securities Accounting
Telecopier Number: (402) 351-2913
Telephone Number (402) 351-2504
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
"Granite Construction Incorporated, 6.54% Senior Notes due March 15, 2010") to:
Chase Manhattan Bank
ABA #021000021
Private Income Processing
for credit to:
United of Omaha Life Insurance Company
Account Number 900-9000200
a/c: G07097
CUSIP/PPN: 387328 A* 8
Interest Amount: ___________
Principal Amount: __________
Notices
All notices in respect of payment of principal and interest, corporate actions
and reorganization notifications to:
The Chase Manhattan Bank
4 New York Plaza - 13th Floor
New York, New York 10004
Attn: Income Processing - J. Piperatto
a/c: G07097
All other communications to:
4-Investment Loan Administration
Mutual of Omaha Insurance Company
Mutual of Omaha Plaza
Omaha, Nebraska 68175-1011
A-2
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0322111
A-3
PRINCIPAL AMOUNT OF
NOTES HELD
NAMES OF HOLDER $5,000,000
MUTUAL OF OMAHA INSURANCE COMPANY
Mutual of Omaha Plaza
Omaha, Nebraska 68175-1011
Attention: Investment Division/Securities Accounting
Telecopier Number: (402) 351-2913
Telephone Number (402) 351-2504
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
"Granite Construction Incorporated, 6.54% Senior Notes due March 15, 2010") to:
Chase Manhattan Bank
ABA #021000021
Private Income Processing
for credit to:
Mutual of Omaha Insurance Company
Account Number 900-9000200
a/c: G07096
CUSIP/PPN: 387328 A* 8
Interest Amount: ________________
Principal Amount: ______________
Notices
All notices in respect of payment of principal and interest, corporate actions
and reorganization notifications to:
The Chase Manhattan Bank
4 New York Plaza - 13th Floor
New York, New York 10004
Attn: Income Processing - J. Piperatto
a/c: G07096
All other notices and communications to:
4 - Investment Loan Administration
Mutual of Omaha Insurance Company
Mutual of Omaha Plaza
A-4
Omaha, Nebraska 68175-1011
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0246511
A-5
PRINCIPAL AMOUNT OF
NOTES HELD
NAMES OF HOLDER $2,000,000
COMPANION LIFE INSURANCE COMPANY
Mutual of Omaha Plaza
Omaha, Nebraska 68175-1011
Attention: Investment Division/Securities Accounting
Telecopier Number: (402) 351-2913
Telephone Number (402) 351-2504
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
"Granite Construction Incorporated, 6.54% Senior Notes due February 15, 2010")
to:
Companion Life Insurance Company
c/o The Bank of New York
ABA #021000018
Acct. No. 111566 Income Collection
Attention: P&I Department
For Payment on: Granite Construction Incorporated
Interest Amount: _______________
Principal Amount: ______________
Payable Date: __________________
CLICO
Notices
All notices with respect to payments to:
Companion Life Insurance Company
Attention: Investment Securities Accounting
Mutual of Omaha Plaza
Omaha, Nebraska 68175
with duplicate notice to:
Companion Life Insurance Company
Attention: Financial Division
401 Theodore Fremd Avenue
Rye, New York 10580-1493
A-6
All other notices and communications to:
Companion Life Insurance Company
Attention: Investment Division
Mutual of Omaha Plaza
Omaha, Nebraska 68175
with duplicate notice to:
Companion Life Insurance Company
Attention: Financial Division
401 Theodore Fremd Avenue
Rye, New York 10580-1493
Name of Nominee in which Notes are to be issued: HARE & CO.
Taxpayer I.D. Number: 13-6062916
A-7
PRINCIPAL AMOUNT OF
NOTES HELD
NAMES OF HOLDER $6,000,000
$2,000,000
NATIONWIDE LIFE INSURANCE COMPANY
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Payments
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
WIRING INSTRUCTIONS:
The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Life Insurance Company
Attention: P&I Department
PPN #387328 A* 8
Security Description: ______________________
CHECK INSTRUCTIONS:
Nationwide Life Insurance Company
c/o The Bank of New York
P.O. Box 19266
Newark, New Jersey 07195
Attention: P&I Department
(Checks should be made payable to Nationwide Life Insurance Company and
identified as to issuer, security, principal and interest)
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
A-8
Nationwide Life Insurance Company
c/o The Bank of New York
P.O. Box 19266
Newark, New Jersey 07195
Attention: P&I Department
With a copy to:
Nationwide Life Insurance Company
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
Attention: Investment Accounting
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 31-4156830
A-9
PRINCIPAL AMOUNT OF
NOTES HELD
NAMES OF HOLDER $5,000,000
AMERICAN UNITED LIFE INSURANCE COMPANY
One American Square
Post Office Box 368
Indianapolis, Indiana 46206-0368
Attention: Christopher D. Pahlke, Securities Department
Overnight mailing address:
One American Square
Indianapolis, Indiana 46282
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
"Granite Construction Incorporated, 6.54% Senior Notes due March 15, 2010, PPN
387328 A* 8" and identifying the breakdown of principal and interest and the
payment date) to:
Bank of New York
Attention: P&I Department
One Wall Street, 3rd Floor
Window A
New York, New York 10286
ABA #021000018, BNF:IOC566
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 35-0145825
A-10
PRINCIPAL AMOUNT OF
NOTES HELD
NAMES OF HOLDER $8,000,000
LUTHERAN BROTHERHOOD
625 Fourth Avenue South, 10th Floor
Minneapolis, Minnesota 55415
Attention: Investment Division
Telecopier Number: (612) 340-5756
Telephone Number: (612) 340-5757
Payments
All payments of principal, interest and premium on the account of the Notes
shall be made by bank wire transfer (in immediately available funds) to:
Norwest Bank Minnesota, N.A.
ABA #091000019
For Credit to Trust Clearing Account #08-40-245
Attention: Sarah Corcoran
For credit to: Lutheran Brotherhood
Account Number 12651300
All payments must include the following information:
A/C Lutheran Brotherhood
Account No.: 12561300
Security Description
PPN Number
Reference Purpose of Payment
Interest and/or Principal Breakdown
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-0385700
A-11
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" shall mean, 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, (b) any other Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of such
first Person or any other Person of which such first Person beneficially owns or
holds, in the aggregate, directly or indirectly, 10% or more of any class of
voting or equity interests and (c) any officer or director of such first Person
and any Person fulfilling an equivalent function of an officer or director;
provided that "Affiliate," in relation to the Company, shall not include any
Subsidiary. As used in this definition, "Control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting Securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Company.
"Asset Disposition" shall mean any Transfer except:
(a) any
(1) Transfer from a Subsidiary to the Company or to a
Wholly-Owned Subsidiary; and
(2) Transfer from the Company to a Wholly-Owned Subsidiary
so long as immediately before and immediately after the consummation of
any such Transfer and after giving effect thereto, no Default or Event
of Default would exist;
(b) any Transfer made in the ordinary course of business and
involving only property that is either (1) inventory held for sale or
(2) equipment, fixtures, supplies or materials no longer required in the
operation of the business of the Company or any of its Subsidiaries or
that is obsolete; and
(c) any Transfer in one lot of all of the voting Securities of TIC,
directly or indirectly, owned or held by the Company to TIC pursuant to
that certain Stock Purchase Agreement dated as of December 23, 1996
between the Company and TIC, as amended, supplemented, restated or
otherwise modified from time to time.
"Attributable Debt" shall mean, as to any particular Long-Term Lease
relating to a Sale-and-Leaseback Transaction, the present value of all Lease
Rentals required to be paid by the Company or any Subsidiary under such lease
during the remaining term thereof (determined in
SCHEDULE B
(to Amended and Restated Note Purchase Agreement
accordance with generally accepted financial practice using a discount factor
equal to the interest rate implicit in such lease if known or, if not known, of
12% per annum).
"Bank Credit Agreement" shall mean that certain Credit Agreement dated
as of June 29, 2001 among the Company, Bank of America, N.A., as Administrative
Agent, as a Lender and as L/C Issuer and each of the other financial
institutions party thereto, as the same may be amended, supplemented, restated
or otherwise modified from time to time, and any credit agreement or other like
agreement entered into by the Company which is substantially similar to or
replaces the Credit Agreement.
"Bank Guaranty" shall mean any Guaranty of the Debt outstanding under
the Bank Credit Agreement by a Subsidiary.
"Business Day" shall mean (a) for the purposes of Section 8.6 only, any
day other than a Saturday, a Sunday or a day on which commercial banks in New
York City are required or authorized to be closed and (b) for the purposes of
any other provision of this Agreement, any day other than a Saturday, a Sunday
or a day on which commercial banks in Chicago, Illinois or San Francisco,
California are required or authorized to be closed.
"Capital Lease" shall mean, 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" shall mean, 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" shall mean the sale of the Notes pursuant to the Original Note
Purchase Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time.
"Company" shall mean Granite Construction Incorporated, a Delaware
corporation, and any Person who succeeds to all, or substantially all, of the
assets and business of Granite Construction Incorporated.
"Confidential Information" is defined in Section 20.
"Consolidated Net Income" for any period shall mean the gross revenues
of the Company and its Subsidiaries for such period less all expenses and other
proper charges (including taxes on income), determined on a consolidated basis
after eliminating earnings or losses attributable to outstanding Minority
Interests, but excluding in any event:
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(a) any gains or losses on the sale or other disposition of
Investments or fixed or capital assets (other than fixed or capital
assets sold or disposed of in the ordinary course of business), and any
taxes on such excluded gains and any tax deductions or credits on
account of any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Subsidiary accrued prior to the
date it became a Subsidiary;
(d) net earnings and losses of any corporation (other than a
Subsidiary), substantially all the assets of which have been acquired in
any manner by the Company or any Subsidiary, realized by such
corporation prior to the date of such acquisition;
(e) net earnings and losses of any corporation (other than a
Subsidiary) with which the Company or a Subsidiary shall have
consolidated or which shall have merged into or with the Company or a
Subsidiary prior to the date of such consolidation or merger;
(f) net earnings of any business entity (other than a Subsidiary or
a joint venture) in which the Company or any Subsidiary has an ownership
interest unless such net earnings shall have actually been received by
the Company or such Subsidiary in the form of cash distributions;
(g) earnings resulting from any reappraisal, revaluation or write-up
of assets;
(h) any deferred or other credit representing any excess of the
equity in any Subsidiary at the date of acquisition thereof over the
amount invested in such Subsidiary;
(i) any gain arising from the acquisition of any Securities of the
Company or any Subsidiary; and
(j) any other extraordinary gain or loss.
"Consolidated Net Worth" shall mean, as of the date of any determination
thereof,
(a) the sum of (1) the par value (or value stated on the books of
the corporation) of the capital stock (but excluding treasury stock and
capital stock subscribed and unissued) of the Company and its
Subsidiaries plus (2) the amount of the paid-in capital and retained
earnings of the Company and its Subsidiaries, in each case as such
amounts would be shown on a consolidated balance sheet of the Company
and its Subsidiaries as of such time prepared in accordance with GAAP,
minus
(b) unearned compensation, minus
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(c) to the extent included in clause (a) above, all amounts properly
attributable to Minority Interests, if any, in the stock and surplus of
Subsidiaries, minus
(d) the book value of all Restricted Investments of the Company and
its Subsidiaries acquired after the date of the Closing in excess of an
amount equal to 10% of the amount determined pursuant to clauses (a),
(b) and (c) of this definition.
"Consolidated Total Assets" shall mean, as of the date of any
determination thereof, (a) the total assets of the Company and its Subsidiaries
which would be shown as assets on a consolidated balance sheet of the Company
and its Subsidiaries as of such time prepared in accordance with GAAP, after
eliminating all amounts properly attributable to Minority Interests, if any, in
the stock and surplus of Subsidiaries.
"Consolidated Total Capitalization" shall mean, as the date of any
determination thereof, the sum of (a) Consolidated Net Worth and (b)
Consolidated Total Debt.
"Consolidated Total Debt" shall mean, as of the date of any
determination thereof, the total of all Debt of the Company and its Subsidiaries
(including, without limitation, all Subsidiaries that are organized as joint
ventures) outstanding on such date, after eliminating all offsetting debits and
credits between the Company and its Subsidiaries, and all other items required
to be eliminated in the course of the preparation of consolidated financial
statements of the Company and its Subsidiaries in accordance with GAAP.
"Debt" shall mean, with respect to any Person, without duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such property);
(c) its Capitalized Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person;
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(g) its recourse obligations under Receivables Securitization
Transactions;
(h) in respect of the Company or any Subsidiary, its Attributable
Debt; and
(i) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (h) hereof in an amount
equal to the amount guaranteed.
Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (i) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"Debt Prepayment Application" shall mean, with respect to any Transfer
of property, the application by the Company or its Subsidiaries of cash in an
amount equal to the Net Proceeds Amount with respect to such Transfer to pay
Senior Debt (other than Senior Debt owing to the Company, any of its
Subsidiaries or any Affiliate).
"Default" shall mean 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" shall mean that rate of interest that is the greater of
(a) 2% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes and (b) 2% over the rate of interest publicly announced
by Bank of America in San Francisco, California as its "reference" rate.
"Disposition Value" shall mean, as of any date of determination, with
respect to any property
(a) in the case of property that does not constitute Subsidiary
Stock, the Fair Market Value thereof, valued at the time of such
disposition in good faith by the Company, and
(b) in the case of property that constitutes Subsidiary Stock, an
amount equal to that percentage of book value of the assets of the
Subsidiary that issued such stock as is equal to the percentage that the
book value of such Subsidiary Stock represents of the book value of all
of the outstanding capital stock of such Subsidiary (assuming, in making
such calculations, that all Securities convertible into such capital
stock are so converted and giving full effect to all transactions that
would occur or be required in connection with such conversion)
determined at the time of the disposition thereof in good faith by the
Company.
"Environmental Laws" shall mean 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
B-5
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA Affiliate" shall mean 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" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean, as of any date of determination 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).
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.
"Governmental Authority" shall mean
(a) the government of
(1) the United States of America or any State or other political
subdivision thereof, or
(2) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary,
or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guarantors" is defined in Section 2.2.
"Guaranty Agreement" is defined in Section 2.2.
"Guaranty" shall mean, 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:
B-6
(a) to purchase such Debt or obligation or any property constituting
security therefor;
(b) to advance or supply funds (1) for the purchase or payment of
such Debt or obligation, or (2) to maintain any working capital or other
balance sheet condition or any income statement condition of any other
Person or otherwise to advance or make available funds for the purchase
or payment of such Debt or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Debt or
obligation of the ability of any other Person to make payment of the
Debt or obligation; or
(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.
"Hazardous Material" shall mean 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" shall mean, 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.
"Holder" is defined in the second paragraph of this Agreement.
"Institutional Investor" shall mean (a) any original purchaser of a
Note, (b) any holder of a Note holding more than 5% 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.
"Investment" shall mean any investment, made in cash or by delivery of
property, by the Company or any of its Subsidiaries (a) in any Person, whether
by acquisition of stock, Debt or other obligation or Security, or by loan,
Guaranty, advance, capital contribution or otherwise, or (b) in any property.
"Lease Rentals" shall mean, with respect to any period, the sum of the
rental and other obligations required to be paid during such period by the
Company or any Subsidiary, as lessee, under all leases of real or personal
property (other than Capital Leases), excluding any amount
B-7
required to be paid by the lessee (whether or not therein designated as rental
or additional rental) on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, provided that, if at the date of
determination, any such rental or other obligations (or portion thereof) are
contingent or not otherwise definitely determinable by the terms of the related
lease, the amount of such obligations (or such portion thereof) (1) shall be
assumed to be equal to the amount of such obligations for the period of 12
consecutive calendar months immediately preceding the date of determination or
(2) if the related lease was not in effect during such preceding 12-month
period, shall be the amount estimated by a Senior Financial Officer of the
Company on a reasonable basis and in good faith.
"Lien" shall mean, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or Capital Lease, upon
or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Long-Term Lease" shall mean any lease of property having an original
term, including any period for which the lease may be renewed or extended at the
option of the lessee, of more than three years.
"Make-Whole Amount" is defined in Section 8.6.
"Make-Whole Amount Calculation Certificate" is defined in Section 8.2.
"Material" shall mean material in relation to the business, operations,
affairs, financial condition, assets, properties or prospects of the Company and
its Subsidiaries taken as a whole.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, affairs, financial condition, assets, properties or
prospects of the Company and its Subsidiaries taken as a whole, or (b) the
ability of the Company to perform its obligations under this Agreement and the
Notes, or (c) the validity or enforceability of this Agreement, the Guaranty
Agreement or the Notes.
"Material Subsidiary" shall mean each Subsidiary identified as a
Material Subsidiary on Schedule 5.4, each Subsidiary that is an obligor or
guarantor of any Debt existing under the Bank Credit Agreement and each other
Subsidiary which meets either of the following conditions:
(a) such Subsidiary's total net revenues for the period of the
immediately preceding four fiscal quarters is equal to or greater than
10% of the consolidated total net revenues of the Company and its
Subsidiaries for such period determined in accordance with GAAP, in each
case as reflected in the most recent annual or quarterly financial
statements of the Company and its Subsidiaries; or
B-8
(b) such Subsidiary's total assets, as of the last day of the
immediately preceding fiscal quarter, is equal to or greater than 10%
of consolidated total assets of the Company and its Subsidiaries as of
such date determined in accordance with GAAP, in each case as reflected
in the most recent annual or quarterly financial statements of the
Company and its Subsidiaries.
"Minority Interests" shall mean any shares of stock of any class of a
Subsidiary (other than directors' qualifying shares as required by law) that are
not owned by the Company and/or one or more of its Subsidiaries. Minority
Interests shall be valued by valuing Minority Interests constituting preferred
stock at the voluntary or involuntary liquidating value of such preferred stock,
whichever is greater, and by valuing Minority Interests constituting common
stock at the book value of capital and surplus applicable thereto adjusted, if
necessary, to reflect any changes from the book value of such common stock
required by the foregoing method of valuing Minority Interests in preferred
stock.
"Multiemployer Plan" shall mean any Plan that is a "multiemployer plan"
(as such term is defined in Section 4001(a)(3) of ERISA).
"Net Proceeds Amount" shall mean, with respect to any Transfer of any
property by any Person, an amount equal to the difference of
(a) the aggregate amount of the consideration (valued at the Fair
Market Value of such consideration at the time of the consummation of
such Transfer) allocated to such Person in respect of such Transfer, net
of any applicable taxes incurred in connection with such Transfer, minus
(b) all ordinary and reasonable out-of-pocket costs and expenses
actually incurred by such Person in connection with such Transfer.
"Notes" is defined in the first paragraph hereof.
"Officer's Certificate" shall mean 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.
"Original Note Purchase Agreement" is defined in the first paragraph
hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA or any successor thereto.
"Person" shall mean an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
B-9
"Plan" shall mean an "employee benefit plan" (as defined in Section 3(3)
of ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"Preferred Stock" shall mean any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"Priority Debt" shall mean the sum of (a) all Debt of the Company
secured by Liens permitted by Section 10.5(k), (b) all Debt of Subsidiaries
permitted by Section 10.4(d), and (c) all Attributable Debt of the Company and
its Subsidiaries permitted by Section 10.10(b).
"property" or "properties" shall mean, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"Property Reinvestment Application" shall mean, with respect to any
Transfer of property, the application of an amount equal to the Net Proceeds
Amount with respect to such Transfer to the acquisition by the Company or any
Subsidiary of operating assets of the Company or any Subsidiary to be used in
the principal business of such Person.
"PTE" is defined in Section 6.2(a).
"Purchasers" shall mean the original purchasers of the Notes under the
Original Note Purchase Agreement.
"QPAM Exemption" shall mean Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Receivables Securitization Transaction" shall mean any transaction
pursuant to which (a) accounts receivables are sold or transferred and (b) the
seller either (1) retains an interest in the receivables so sold or transferred
or (2) assumes any liability in connection with such sale or transfer.
"Required Holders" shall mean, at any time, the holders of at least 51%
in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company, any of its Subsidiaries or any of its Affiliates).
"Responsible Officer" shall mean 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" (a) shall mean all Investments except the
following:
B-10
(1) property to be used in the ordinary course of business of the
Company and its Subsidiaries;
(2) current assets arising from the sale of goods and services in
the ordinary course of business of the Company and its Subsidiaries;
(3) Investments in one or more Subsidiaries or any Person that
concurrently with such Investment becomes a Subsidiary;
(4) Investments existing on the date of the Closing and disclosed in
Schedule 5.16 to the Original Note Purchase Agreement;
(5) Investments permitted by the Company's "Investment Policy
Guidelines" as in effect on the date hereof set forth on Exhibit 3
attached hereto and such additional Investments as may from time to time
be permitted under the Company's investment policy guidelines; provided
that the Required Holders shall have consented to such additional
Investments; and
(6) Investments in Wilder Construction, a Washington corporation,
made after May 14, 2001 in an aggregate amount not to exceed
$30,000,000.
(b) As of any date of determination, each Restricted Investment shall be
valued at the greater of:
(1) the amount at which such Restricted Investment is shown on the
books of the Company or any of its Subsidiaries (or zero if such
Restricted Investment is not shown on any such books); and
(2) either
(i) in the case of any Guaranty of the obligation of any Person,
the amount which the Company or any of its Subsidiaries has paid on
account of such obligation less any recoupment by the Company or
such Subsidiary of any such payments, or
(ii) in the case of any other Restricted Investment, the excess
of (A) the greater of (I) the amount originally entered on the books
of the Company or any of its Subsidiaries with respect thereto and
(II) the cost thereof to the Company or its Subsidiary over (B) any
return of capital (after income taxes applicable thereto) upon such
Restricted Investment through the sale or other liquidation thereof
or part thereof or otherwise.
(c) As used in this definition of "Restricted Investments":
B-11
"Acceptable Bank" shall mean any bank or trust company (1) which is
organized under the laws of the United States of America or any State
thereof, (2) which has capital, surplus and undivided profits
aggregating at least $250,000,000, and (3) 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) are given one of the two highest ratings by Moody's or
S&P or another credit rating agency of recognized national standing.
"Moody's" shall mean Moody's Investors Service, Inc.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
The McGraw Hill Companies, Inc.
"United States Governmental Security" shall mean any direct
obligation of, or obligation guaranteed by, the United States of
America, or any agency controlled or supervised by or acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America, so long as such
obligation or guarantee shall have the benefit of the full faith and
credit of the United States of America which shall have been pledged
pursuant to authority granted by the Congress of the United States of
America.
"Sale-and-Leaseback Transaction" shall mean a transaction or series of
transactions pursuant to which the Company or any Subsidiary shall sell or
transfer to any Person (other than the Company or a Subsidiary) any property,
whether now owned or hereafter acquired, and, as part of the same transaction or
series of transactions, the Company or any Subsidiary shall, within 180 days of
such sale or transfer, rent or lease, as lessee, (other than pursuant to a
Capital Lease), or similarly acquire the right to possession or use of, such
property or one or more properties which it intends to use for the same purpose
or purposes as such property.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Security" has the meaning set forth in Section 2(1) of the Securities
Act of 1933, as amended.
"Senior Debt" shall mean all Debt of the Company, other than
Subordinated Debt.
"Senior Financial Officer" shall mean the chief financial officer,
principal accounting officer, treasurer or controller of the Company.
"Subordinated Debt" shall mean any Debt of the Company that is in any
manner subordinated in right of payment or security in any respect to the Debt
evidenced by the Notes.
"Source" is defined in Section 6.2.
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"Subsidiary" shall mean, 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 Stock" shall mean, with respect to any Person, the stock (or
any options or warrants to purchase stock or other Securities exchangeable for
or convertible into stock) of any Subsidiary of such Person.
"Successor Corporation" is defined in Section 10.7(d).
"Swaps" shall mean, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined. For purposes of this
Agreement, any such interest rate swap, currency swap, or other similar
obligation which is or will be entered into and is being or will be used by such
Person in the ordinary course of its business to hedge an existing or future
risk or exposure of such Person in respect of its liabilities or assets (and not
for speculative purposes) shall not be deemed a "Swap" for purposes of this
definition.
"TIC" shall mean TIC Holdings, Inc., a Delaware corporation.
"Transfer" shall mean, with respect to any Person, any transaction in
which such Person sells, conveys, transfers or leases (as lessor) any of its
property, including, without limitation, Subsidiary Stock. For purposes of
determining the application of the Net Proceeds Amount in respect of any
Transfer, the Company may designate any Transfer as one or more separate
Transfers each yielding a separate Net Proceeds Amount. In any such case, (a)
the Disposition Value of any property subject to each such separate Transfer and
(b) the amount of Consolidated Total Assets attributable to any property subject
to each such separate Transfer shall be determined by ratably allocating the
aggregate Disposition Value of, and the aggregate Consolidated Total Assets
attributable to, all property subject to all such separate Transfers to each
such separate Transfer on a proportionate basis.
B-13
"Wholly-Owned" when used in connection with any Subsidiary shall mean,
at any time, any Subsidiary one hundred percent (100%) of all of the equity
interests (except directors' qualifying shares) and voting interests of which
are owned by any one or more of the Company and the Company's other Wholly-Owned
Subsidiaries at such time.
B-14
CHANGES IN CORPORATE STRUCTURE
NONE
SCHEDULE 4.9
(to Amended and Restated Note Purchase Agreement)
DISCLOSURE MATERIALS
NONE
SCHEDULE 5.3
(to Amended and Restated Note Purchase Agreement)
SUBSIDIARIES OF THE COMPANY AND
OWNERSHIP OF SUBSIDIARY STOCK*
1. Subsidiaries - Organization and Capital Structure
OWNERSHIP BY
JURISDICTION OF COMPANY AND/OR
NAME ORGANIZATION CAPITAL STRUCTURE SUBSIDIARIES
---- --------------- ----------------- --------------
Granite Construction Company* California Corporation 100% wholly owned subsidiary
of GCI
Wilcott Corporation Colorado Corporation 100% wholly owned subsidiary
of GCI
Granite Land Company* California Corporation 100% wholly owned subsidiary
of GCI
Granite SR 91 Corporation California Corporation 100% wholly owned subsidiary
of GCI
Granite SR 91, L.P. California Limited Partnership 99% limited partner of GCI and
1% general partner of Granite
SR 91 Corporation
GILC Incorporated California Corporation 100% wholly owned subsidiary
of GCI
GILC, L.P.* California Limited Partnership 99% limited partner of GCC and
1% general partner of GILC
Incorporated
G.G. & R., Inc.* Utah Corporation 100% wholly owned subsidiary
of GCI
Intermountain Slurry Seal, Wyoming Corporation 100% wholly owned subsidiary
Inc.* of G.G. & R., Inc.
Pozzolan Products Company* Utah Corporation 100% wholly owned subsidiary
of G.G. & R., Inc.
GTC, Inc. Texas Corporation 100% wholly owned subsidiary
of GCI
- --------------
* Material Subsidiary
SCHEDULE 5.4
(to Amended and Restated Note Purchase Agreement)
Granite Construction California Corporation 100% wholly owned subsidiary
International of GCI
Granite Halmar Construction New York Corporation 100% wholly owned subsidiary
Company, Inc.* of GCI
Waters Ridge II Texas Limited Partnership 69% interest owned by GCI
Granite Mandalay Finance California Limited Liability Company 70% interest owned by GLC
Granite/Kiewit (Tongue River) Montana Joint Venture 76% partnership interest by
GCC
Granite/Sundt (I-17) Arizona Joint Venture 55% partnership interest by
GCC
Minn.Transit Constrs (Light Minnesota Joint Venture 56.5% partnership interest by
Rail) GCC
Granite Rizzani (Hathaway Florida Joint Venture 60% partnership interest by
Bridge) GCC
River Mountain Constructors Arkansas Joint Venture 60% partnership interest by
GCC
Granite2 Sundt (Supersition Arizona Joint Venture 65% partnership interest by
Hwy) GCC
Granite/PCL (I-4 St Johns Florida Joint Venture 64.6% partnership interest by
River) GCC
S-5.4-2
2. Affiliates - Organization and Capital Structure
OWNERSHIP BY
JURISDICTION OF COMPANY AND/OR
NAME ORGANIZATION CAPITAL STRUCTURE SUBSIDIARIES
---- --------------- ---------------- --------------
Paramount-Nevada Asphalt California LLP 50% Interest owned by GCI
Wilders Construction Company Washington Minority Interest 46% Interest owned by GCI
TIC Holdings, Inc. Delaware Minority Interest 30% Interest owned by GCI
Williamson Ranch Plaza California LP 25% Interest owned by GLC
Oly Mandalay Bay California LLC 9% Interest owned by GLC
Granite Regional Park California LP 25% partnership interest by
GLC
CPTC L.P. California LLP 22% Interest owned by GCI
Kiewit/Granite (TCA) California Joint Venture 30% partnership interest by
GCC
KG Leasing (TCA) California Joint Venture 30% partnership interest by
GCC
Kiewit/Granite California Joint Venture 25% partnership interest by
(East Dam) GCC
Kiewit/Granite/ Utah Joint Venture 23% partnership interest by
Washington(Wasatch) GCC
KGW Leasing (Wasatch) Utah Joint Venture 23% partnership interest by
GCC
Yonkers/Granite (Atlantic City) New Jersey Joint Venture 40% partnership interest by
GCC
Western Summit/TIC/ Granite (UTOY) Georgia Joint Venture 15% partnership interest by
GCC
Sampson/Granite (Cabrillo College) California Joint Venture 40% partnership interest by
GCC
Washington Granite California Joint Venture 40% partnership interest by
GCC
Las Vegas Monorail (Light Rail) Nevada Joint Venture 44.8% partnership interest
by GCC
S-5.4-3
3. The Company's Directors and Officers
DIRECTORS OFFICERS
--------- --------
Watts, David H. Watts, David H.
Barclay, Joseph J. Dorey, William G.
Brooks, Richard M. Costanzo, Patrick M.
Griego, Linda Barton, William E.
Kelly, Brian C. Boitano, Mark E.
McDonald, Rebecca Allbritton, R.C.
Miles, Raymond E. Futch, Michael
Niebla, J.F. Higdem, Garry M.
Searle, George Roberts, James H.
Thomas, Michael L.
Grazian, David R.
McCann-Jenni, Mary
Cady, James
S-5.4-4
4. Agreements Restricting Dividend Payments
NONE
S-5.4-5
FINANCIAL STATEMENTS
SEC Form 10-K for the fiscal years ended
December 31, 1995
December 31, 1996
December 31, 1997
December 31, 1998
December 31, 1999
December 31, 2000
SEC Form 10-Q for the fiscal quarters ended
September 30, 1999
September 30, 2000
SCHEDULE 5.5
(to Amended and Restated Note Purchase Agreement)
CERTAIN LITIGATION
NONE
SCHEDULE 5.8
(to Amended and Restated Note Purchase Agreement)
PATENTS, ETC.
NONE
SCHEDULE 5.11
(to Amended and Restated Note Purchase Agreement)
EXISTING DEBT
BALANCE
ITEM INTEREST AUGUST 1,
NO. LENDER'S NAME DESCRIPTION RATE MATURITY 2001
- ---- ------------- ----------- ------- -------- ------------
1. Benna Investments Aggregate property 6.50% 04/14/02 $ 1,013,088
2. Benna Investments Real Estate property 6.50% 12/01/07 1,381,679
3. Bank of New York Real Estate property 8.25% 08/01/02 766,653
4. Rosemary's Mountain Aggregate property 8.82% 06/01/02 1,700,000
5. Private Placement Due Refinance debt & 6.54% 03/15/10 60,000,000
03/15/10 general corporate
purposes
6. Private Placement Due 05/01/13 general corporate 6.96% 05/01/13 75,000,000
purposes
7. Bank of America Letter of Self insured Worker's 137.5 bps 04/30/02 1,562,962
Credit Compensation
8. Bank of America Letter of SR91 L.P. 137.5 bps 05/25/02 3,299,861
Credit
9. Bank of America Letter of Camino Columbia Toll 137.5 bps 05/25/02 10,016,400
Credit Road (performance LC)
10. Syndicated Bank Facility For general corporate 5.50% 10/05/01 18,000,000
(Revolver) purposes
Total $172,740,643
SCHEDULE 5.15
(to Amended and Restated Note Purchase Agreement)
EXISTING INVESTMENTS
MARKET VALUE
COMPANY DESCRIPTIONS JUNE 30, 2001
- ------- ------------ --------------
Perini Corporation Common Stock $ 2,878
Vulcan Materials Company Common Stock 2,813
Cascade Corporation Common Stock 2,384
Paramount-Nevada Asphalt LLP 6,285,888
Wilder Construction Company Minority Interest 18,073,190
TIC Holdings, Inc. Minority Interest 22,828,787
Williamson Ranch Plaza LP 749,059
Oly Mandalay Bay LLC 1,695,357
Granite Regional Park LP 504,707
CPTC L.P./SR91 L.P. Joint Venture 795,499
Granite/Groves Joint Venture 184,894
Kiewit/Granite (TCA) Joint Venture 377,512
Kiewit/Granite (KG Leasing) Joint Venture 1,622,586
Kiewit/Granite (E. Dam) Joint Venture 375,376
Kiewit/Granite (Wasatch) Joint Venture 2,556,051
Kiewit/Granite (KGW Leasing) Joint Venture 7,730,921
Yonkers/Granite (Atlantic City) Joint Venture 11,928,225
Western Summit/TIC/Granite Joint Venture 137,037
Sampson/Granite Joint Venture 163,206
Washington Granite Joint Venture 200,000
Total $76,216,370
SCHEDULE 5.16
(to Amended and Restated Note Purchase Agreement)
Environmental Matters
Granite Construction in the normal course of business utilizes petroleum
(hydrocarbon) products which may be considered hazardous materials when
encountered at regulatory levels established by the Federal EPA or the Regional
State EPA. The utilization of these asphalt products, diesel, and gasoline over
the years has the potential of creating exposure to environmental clean up
requirements. All underground tanks meet current requirements. There is no
pending governmental ordered clean up. However, the following represents
estimates based on construction industry housekeeping practices as encountered
during our normal course of business. Except as indicated with an "*", these
costs do not represent actual identified exposures.
LOCATIONS DESCRIPTIONS AMOUNT
--------- ------------ ----------
Arvin, CA Asphalt Batch Plant $ 100,000
Arvin, CA Surface Spills 50,000
Bakersfield, CA Surface Spills 100,000
Bakersfield, CA Diesel Aboveground Storage Tanks 25,000
Bakersfield, CA Asphalt Batch Plant 100,000
Coalinga, CA Asphalt Batch Plant 50,000
Felton, Ca Asphalt Batch plant 200,000
French Camp, CA Diesel/Gasoline Underground Storage Tanks 100,000
Gardnerville, NV Surface Spills 25,000
Gardnerville, NV Asphalt Batch Plant 50,000
Indio, CA Massey Shop/Smitty's Garage Cleanup 50,000
Palmdale, CA Surface Spills 10,000
Palmdale, CA Asphalt Batch Plant 50,000
Patrick, NV Asphalt Batch Plant 75,000
Patrick, NV Surface Spills 50,000
Sacramento, CA Diesel/Gasoline Underground Storage Tanks 50,000
Sacramento, CA Asphalt Batch Plant 300,000
Sacramento, CA Surface Spills 200,000
Sacramento, CA Diesel Aboveground Storage Tanks 50,000
Sacramento, CA Shop Area Cleanup 50,000
Salinas, CA Surface Spills 250,000
Santa Barbara, CA Surface Spills 200,000
Santa Barbara, CA Diesel/Gasoline Underground Storage Tanks 75,000
Santa Barbara, CA Asphalt Batch Plant 50,000
Santa Cruz, CA Santa Cruz Yard Cleanup 250,000
Sparks, NV Diesel/Gasoline Underground Storage Tanks 100,000
Tracy, CA Asphalt Batch Plant 75,000
Tracy, CA Surface Spills 25,000
Tucson, AZ Surface Spills 25,000
Tucson, AZ Diesel/Gasoline Underground Storage Tanks 50,000
Watsonville, CA Diesel/Gasoline Underground Storage Tanks 150,000
Watsonville, CA Surface Spills 50,000
Webb, UT *Asphalt Batch Plant 500,000
Whitehall, UT *Asphalt Batch Plant 55,000
Salt Lake City, UT *Concrete Batch Plant 250,000
Salt Lake County, UT *Surface Spills 30,000
Weber County, UT (Ogden) *Surface Spills 100,000
Salt Lake County, UT (CPC) *Aggregate and smelter site 1,250,000
SCHEDULE 5.18
(to Amended and Restated Note Purchase Agreement)
LOCATIONS DESCRIPTIONS AMOUNT
--------- ------------ -----------
Cahoon, UT *Surface Spills 100,000
Fireclay Battery, UT *Surface Spills 25,000
Total $5,295,000
S-5.18-2
FORM OF NOTE
GRANITE CONSTRUCTION INCORPORATED
6.54% Senior Note due March 15, 2010
No. ________ ___________, 20__
$____________ PPN 387328 A* 8
For Value Received, the undersigned, Granite Construction Incorporated
(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 March 15,
2010 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 6.54% per annum from
the date hereof, payable semiannually, on the fifteenth day of March and
September in each year, commencing with the March 15 or September 15 next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreement referred to below), payable semiannually as aforesaid (or, at
the option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the greater of (i) 8.54% or (ii) 2% over the rate of
interest publicly announced by Bank of America from time to time in San
Francisco, California as its "reference" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank of America in Chicago, Illinois or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to
below.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to that certain Amended and Restated Note Purchase Agreement,
dated as of November 1, 2001 (as from time to time amended, the "Note Purchase
Agreement"), between the Company and each of 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 to the extent provided in Section 13.2 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
EXHIBIT 1
(to Amended and Restated Note Purchase Agreement)
purpose of receiving payment and for all other purposes, and the Company will
not be affected by any notice to the contrary.
This Note and the holders hereof are entitled equally and ratably with
the holders of all other Notes to the rights and benefits provided pursuant to
the terms and provisions of the Guaranty Agreement (as such term is defined in
the Note Purchase Agreement). Reference is hereby made to the Guaranty Agreement
for a statement of the nature and extent of the benefits and security for the
Notes afforded thereby and the rights of the holders of the Notes and the
Company in respect thereof.
The Company will make required prepayments of principal on the dates and
in the amounts specified in the Note Purchase Agreement. 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.
If an Event of Default, as defined in the Note Purchase Agreement,
exists, 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 Illinois,
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
GRANITE CONSTRUCTION INCORPORATED
By
--------------------------------
Its
By
--------------------------------
Its
E-1-2
GRANITE CONSTRUCTION INCORPORATED
INVESTMENT POLICY GUIDELINES
FOR WORKING CAPITAL PORTFOLIO
EFFECTIVE: JANUARY 1, 2001
PURPOSE
Within the spectrum of activities of this Corporation, it is necessary to
provide a framework for the regular and continuous management of its investment
funds. Short term and intermediate term investments provide earnings on excess
cash while maintaining liquidity and working funds for the present and future
operations.
INVESTMENT OBJECTIVES
In order to provide control of all investments and cash, the Corporation has
established the following objectives regarding its investment policy:
- - Safety -- the primary objective of the investment activities of the
Corporation is protection of capital. Each investment transaction shall
seek to first ensure that capital losses are avoided, whether they are
from securities defaults or erosion of market value.
- - Liquidity -- the investment portfolio must be structured in a manner
that will provide sufficient liquidity to pay the obligations of the
Corporation. Any excess cash above the aforementioned requirements may
be invested in instruments with longer maturity.
- - Diversification -- the investment activity must ensure diversification
of investments that minimizes risk exposure to any one security and/or
issuer.
- - Investment Return -- the Corporation seeks to maximize the return on all
investments within the constraints of safety and liquidity.
DURATION
The duration of the portfolio including escrows and deposits shall be consistent
with the cash needs as determined by the cash forecast. Cash investments are
restricted to the average duration of one (1) year from date of settlement. Any
investments with longer maturity than one year must be invested in instruments
issued by, guaranteed by, or insured by the U.S. Government or any of its
agencies. The average portfolio duration of escrows and deposit agreements shall
not exceed five (5) years.
Short-term investments shall be defined as instruments maturing in ninety-one
(91) days or more.
EXHIBIT 3
(to Amended and Restated Note Purchase Agreement)
MARKETABILITY
Holdings should be of sufficient size and held in issues, which are traded
actively (except time deposits, loan participation, and master notes) to
facilitate transactions at minimum cost and accurate market valuations.
TRADING
The following individuals are authorized traders:
Roxane C. Allbritton, Vice President/Treasurer
Jigisha Desai, Cash Manager
Michael D. Kevorkian, Treasury Analyst
Mary McCann-Jenni, Controller
Any individual transaction conforming to the policy set forth herein or, any
transaction of an Investment Manager not conforming to the respective Investment
Manager's policy shall be approved by one of the following officers or, any
transaction not conforming to the policy set forth herein must be approved by
any two of the following officers:
D.H. Watts W.E. Barton P.M. Costanzo
W.G. Dorey M.E. Boitano
DEALERS AND BANKS FOR TRADING
The following institutions are authorized dealers:
BA Securities
Lehman Brothers
Merrill Lynch
Salomon Smith Barney
All purchased investments will be delivered to Bank of New York for safekeeping
and paid for upon receipt.
SAFEKEEPING
The banks designated as safekeeping depositories in order of choice are:
E-3-2
Bank of America, Glendale, CA (Wentworth, Hauser & Violich)
Bank of New York (BNY Western Trust Company)
Each financial institution must provide timely confirmation/safekeeping receipts
on all investment transactions and provide monthly transaction reports.
ESCROW
Escrows in lieu of retention are allowed at the following:
Bank of America (formerly Nations Bank, Texas)*
Bank One, Arizona*
Comerica Bank*
First Union Bank of North Carolina*
Merrill Lynch Trust Company
Nevada Highway Fund (State of Nevada Treasury)*
SunTrust Bank, Georgia*
Union Bank of California
US Trust of California
Zions Bank, Utah* *Required by Owner
The types of investments will be guided by the terms of the escrow, but in all
cases the investment will be governed by the investment policy. *Required by
Owner. Banks not listed, but required by escrow agreement, will also be
acceptable.
REPORTING
- - Daily -- An investment transaction sheet, sequentially numbered will be
processed for approval by an authorized offer.
- - Weekly and Monthly -- A portfolio will be provided to the President,
Chief Operating Officer, Chief Financial Officer and all traders.
- - Monthly -- The fixed income portfolio will be monitored against the
performance of Merrill Lynch U.S. Domestic Master 1-3 years index.
- - For FASB 115 purposes, the Corporation classifies all fixed income
investments as "Held to Maturity."
E-3-3
GRANITE CONSTRUCTION INCORPORATED
INVESTMENT POLICY GUIDELINES
FOR WORKING CAPITAL PORTFOLIO
EFFECTIVE: JANUARY 1, 2001
- ----------------------------------------------------------------------------------------------------------------------
CONCENTRATION CONCENTRATION
MINIMUM CREDIT BY BY
ELIGIBLE INVESTMENTS QUALITY ISSUER PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------
Obligations issued by U.S. N/A No Maximum No Maximum
Government limited to:
U.S. Treasury Bills/Bonds/Notes
- ----------------------------------------------------------------------------------------------------------------------
Obligations of agencies of the N/A $5,000,000 or 10% of 40%
U.S. Government limited to: total portfolio
(whichever is greater)
Federal Farm Credit Bank
Federal Home Loan Bank
Federal Home Loan Mortgage Corp.
Federal National Mortgage
Association
Student Loan Marketing Association
- ----------------------------------------------------------------------------------------------------------------------
Obligations collateralized by U.S. Fully collateralized by U.S. $5,000,000 or 10% of 25%
Government securities limited to: Gov't and Agency securities total portfolio
included in these guidelines. (whichever is greater)
Repurchase Agreements Collateral value plus accrued
Reverse Repurchase Agreements interest must exceed and be
maintained at level exceeding
value of agreement.
- ----------------------------------------------------------------------------------------------------------------------
Obligations issued by U.S. owned Limited to Top 25 U.S. Banks by $5,000,000 or 10% of 50%
domestic commercial banks limited deposit and assets. total portfolio
to: Short-Term rating of A-1/P-1, or (whichever is greater)
Long-Term rating of AAA/NR or
Banker's Acceptance AA/Aa
Certificate of Deposit (at the time of purchase)
- ----------------------------------------------------------------------------------------------------------------------
Obligations issued by U.S. bank Limited to Top 25 World Banks by $5,000,000 or 10% of 40%
subsidiaries of Non U.S. Bank deposit and assets. total portfolio
limited to: Short-Term rating of A-1/P-1, or (whichever is greater)
Long-Term rating of AAA/NR or
Yankee Banker's Acceptance AA/Aa
Yankee Certificates of Deposit (at the time of purchase)
(all securities U.S. dollar
denominated)
- ----------------------------------------------------------------------------------------------------------------------
E-3-4
GRANITE CONSTRUCTION INCORPORATED
INVESTMENT POLICY GUIDELINES
FOR WORKING CAPITAL PORTFOLIO
EFFECTIVE: JANUARY 1, 2001
- ----------------------------------------------------------------------------------------------------------------------
CONCENTRATION CONCENTRATION
MINIMUM CREDIT BY BY
ELIGIBLE INVESTMENTS QUALITY ISSUER PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------
Obligations of major U.S. Any TWO of three rating services: $5,000,000 or 10% of 75%
corporations and U.S. holding A-1/P-1/D-1 total portfolio
companies limited to: S&P, Moody's, Duff & Phelps (whichever is greater)
(at the time of purchase)
Commercial Paper
Any split-rated of three rating $5,000,000 or 10% of 30% of Overall
services: A1/P2, A2/P1 Commercial Paper Commercial Paper
S&P, Moody's, Duff & Phelps portfolio portfolio
(at the time of purchase) (whichever is greater) or
Must be publicly traded 22.5% of Total
Corporation Portfolio
Must have at least $20B in
Market Capitalization
(at the time of purchase)
Any TWO of three rating services: $5,000,000 or 10% of 20% of Overall
A-2/P-2/D-2 S&P, Moody's, Duff Commercial Paper Commercial Paper
& Phelps portfolio portfolio
Must be publicly traded (whichever is greater) or
Corporation 15% of Total
Must have at least $20B in Portfolio
Market Capitalization
(at the time of purchase)
- ----------------------------------------------------------------------------------------------------------------------
Loan Participation Same as commercial paper credit $5,000,000 or 10% of 25%
Master Notes quality requirements total portfolio
(whichever is greater)
- ----------------------------------------------------------------------------------------------------------------------
Money Market Funds Any TWO of three rating $5,000,000 or 10% of 50%
services: AAAm/Aaa/AAA total portfolio
S&P, Moody's, Duff & Phelps (whichever is greater)
(at the time of purchase)
- ----------------------------------------------------------------------------------------------------------------------
Tax-exempt investments limited to: S&P: A-1, AA or better, Sp-1 $5,000,000 or 10% of 25%
AND total portfolio
Commercial Paper Moody's: P-1, Aa or better, (whichever is greater)
Floating Rate Put Bonds VMIG-1
Floating Rate Put Notes
Municipal Notes
Municipal Bonds
- ----------------------------------------------------------------------------------------------------------------------
E-3-5
GRANITE CONSTRUCTION INCORPORATED
INVESTMENT POLICY GUIDELINES
FOR HIGH-YIELD PORTFOLIO
EFFECTIVE: FEBRUARY 1, 2001
STATEMENT OF PURPOSE
Cash is the major source of working capital for the present and future
operations of Granite. Managing the cash to ensure the liquidity necessary to
meet Granite's business needs is of paramount importance. Any cash balances
above those necessary for day-to-day working capital requirements are available
for longer-term investments. These investments can be held for a longer interval
to enhance the portfolio yield, and add diversification, without loosing sight
of capital preservation within this policy's guidelines.
INVESTMENT OBJECTIVES
The investment objective of this portfolio is to seek consistency of investment
return with emphasis on capital appreciation and secondarily capital
preservation with a goal of either equaling or exceeding the Composite Policy
Index. The Composite Policy Index is defined, as an Index comprised of several
indices corresponding to the various mutual funds being used in this portfolio
as per the asset allocation study. Therefore, the investment objectives are:
[ ] Investment Return: Optimize the investment returns within the
constraints of this policy.
[ ] Safety: Emphasize preservation of capital assets over economic business
cycles.
[ ] Diversification:
- Provide investments in mutual fund companies that have sufficient
number of funds with different investment characteristics.
- Select funds from mutual fund companies that provide a balanced
investment approach that can be diversified among the major assets
classes and will provide sufficiently varied risk/return
characteristics (see Exhibit A).
PERFORMANCE MEASUREMENT GUIDELINES
Normally, investment performance should be judged over a complete economic cycle
(typically 3 to 5 years). Since short-term results are not usually meaningful,
true investment success will be looked at as a long-term proposition. To
accomplish this, the performance measurement guidelines are:
[ ] To manage the concentration in any one class of mutual funds, the
portfolio will be invested based on an asset allocation study prepared
by an outside investment advisory firm and managed accordingly.
Periodically, the Composite Policy Index will be modified to coincide
to the most recent asset allocation study.
E-3-6
[ ] To invest in funds that will have ratings from Morningstar of 3, 4, or
5 and will be comparable in performance to the respective indices, e.g.
growth fund index, growth and income index, etc. (see Exhibit B)
[ ] To determine if the investment guidelines are being followed, a review
of fund performance will be prepared each quarter by an outside
investment advisory firm. The review will take into consideration
overall economic conditions as well as the risk and return objectives
of these guidelines.
MARKETABILITY
Investments should be of sufficient size and be held in issues, which are traded
actively to facilitate transactions at minimum cost and accurate market
valuations.
TRADING
The following individuals are authorized traders:
Roxane C. Allbritton, Vice President/Treasurer
Jigisha Desai, Cash Manager
Michael D. Kevorkian, Treasury Analyst
Mary McCann-Jenni, Controller
Any individual transaction conforming to the policy set forth herein shall be
approved by one of the following officers or, any transaction not conforming to
the policy set forth herein must be approved by any two of the following
officers:
D.H. Watts W.E. Barton P.M. Costanzo
W.G. Dorey M.E. Boitano
MUTUAL FUNDS
The following mutual funds are authorized:
Franklin Small Cap Fund
Loomis Sayles
Pimco Bond Fund
Putnam Mutual Funds
E-3-7
All purchased investments will be delivered to the custodian bank for
safekeeping and paid for upon receipt.
SAFEKEEPING
The institutions designated as a safekeeping depository are:
Fleet Bank
Merrill Lynch
The custodian bank must provide timely confirmation/safekeeping receipts on all
investment transactions and provide monthly transaction reports.
REPORTING
- Daily -- Upon a settlement of trade, an investment transaction sheet,
sequentially numbered will be processed for approval by an authorized
officer.
- Monthly and quarterly -- Financial reporting requirements for GAAP.
- Monthly -- The mutual fund portfolio will be evaluated based on a
unit-based performance analysis and will be distributed to the
President, Chief Operating Officer, Chief Financial Officer and all
traders.
- Quarterly -- A risk-adjusted performance analysis and a composite
policy index analysis of funds will be prepared by an outside advisory
firm.
- Quarterly -- An asset allocation status, indicating out of balance
funds rebalancing (if any) that is required.
- An outside firm will do an asset allocation study every three (3)
years.
- For FASB 115 purposed, the Corporation classifies mutual fund
investments as "Available for Sale."
E-3-8