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EXHIBIT 10.01
RELIANCE STEEL & ALUMINUM CO.
$10,000,000 6.76% Senior Notes, Series E, due January 2, 2002,
$25,000,000 7.04% Senior Notes, Series F, due January 2, 2006
and
$30,000,000 7.08% Senior Notes, Series G, due January 2, 2008
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NOTE PURCHASE AGREEMENT
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Dated September 15, 1997
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TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. SALE AND PURCHASE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 4. CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 4.1. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4.2. Performance; No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4.3. Compliance Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4.4. Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4.5. Purchase Permitted By Applicable Law, Etc . . . . . . . . . . . . . . . . . . . . . 4
Section 4.6. Sale of Other Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.7. Payment of Special Counsel Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.8. Private Placement Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.9. Changes in Corporate Structure . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.10. Subsidiary Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.11. Proceedings and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 5.1. Organization; Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.2. Authorization, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.3. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates . . . . . . . . . 5
Section 5.5. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.6. Compliance with Laws, Other Instruments, Etc . . . . . . . . . . . . . . . . . . . 6
Section 5.7. Governmental Authorizations, Etc . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders . . . . . . . . . . . . . 7
Section 5.9. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.10. Title to Property; Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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Section 5.11. Licenses, Permits, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.12. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.13. Private Offering by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.14. Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.15. Existing Debt; Future Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.16. Foreign Assets Control Regulations, Etc . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.17. Status under Certain Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.18. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 6. REPRESENTATIONS OF THE PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.1. Purchase for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.2. Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.3. Competitors of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 7. INFORMATION AS TO COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.1. Financial and Business Information . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.2. Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7.3. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8. PREPAYMENT OF THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 8.1. Required Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 8.2. Optional Prepayments with Make-Whole Amount . . . . . . . . . . . . . . . . . . . . 16
Section 8.3. Allocation of Partial Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.4. Maturity; Surrender, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.5. Purchase of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.6. Make-Whole Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 9. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 9.1. Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 9.2. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 9.3. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 9.4. Payment of Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 9.5. Corporate Existence, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 9.6. Subsidiary Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 10. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 10.1. Incurrence of Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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Section 10.2. Subsidiary Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 10.3. Incurrence of Current Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 10.4. Minimum Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 10.5. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 10.6. Restrictions on Dividends of Subsidiaries . . . . . . . . . . . . . . . . . . . . . 24
Section 10.7. Sale of Assets, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 10.8. Merger, Consolidation, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.9. Line of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 10.10. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 10.11. Designation of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 12. REMEDIES ON DEFAULT, ETC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.1. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.2. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 12.3. Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc . . . . . . . . . . . . . . . . . 30
Section 13. Registration; Exchange; Substitution of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 13.1. Registration of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 13.2. Transfer and Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 13.3. Replacement of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 14. PAYMENTS ON NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 14.1. Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 14.2. Home Office Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 15. EXPENSES, ETC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 15.1. Transaction Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 15.2. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . 33
SECTION 17. AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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Section 17.1. Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 17.2. Solicitation of Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 17.3. Binding Effect, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 17.4. Notes Held by Company, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 18. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 19. REPRODUCTION OF DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 20. CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 21. SUBSTITUTION OF PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 22. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 22.1. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 22.2. Payments Due on Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 22.3. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 22.4. Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 22.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 22.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SCHEDULE A -- Information Relating To Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE C -- Existing Investments
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
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SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.11 -- Patents, Etc.
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Debt
EXHIBIT 1A -- Form of 6.76% Senior Note, Series E, due January
2, 2002
EXHIBIT 1B -- Form of 7.04% Senior Note, Series F, due January
2, 2006
EXHIBIT 1C -- Form of 7.08% Senior Note, Series G, due January
2, 2008
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel to the Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel to the
Subsidiary Guarantors
EXHIBIT 4.4(c) -- Form of Opinion of Special Counsel to the
Purchasers
EXHIBIT 9.6 -- Form of Subsidiary Guaranty
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RELIANCE STEEL & ALUMINUM CO.
2550 E. 25TH STREET
LOS ANGELES, CALIFORNIA 90058
$10,000,000 6.76% Senior Notes, Series E, due January 2, 2002,
$25,000,000 7.04% Senior Notes, Series F, due January 2, 2006
and
$30,000,000 7.08% Senior Notes, Series G, due January 2, 2008
September 15, 1997
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
RELIANCE STEEL & ALUMINUM CO., a California corporation (the
"Company"), agrees with you as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of (i) $10,000,000
aggregate principal amount of its 6.76% Senior Notes, Series E, due January 2,
2002 (the "Series E Notes"; such term to include any notes of the same series
issued in substitution therefor pursuant to Section 13 of this Agreement or the
Other Agreements (as hereinafter defined)), (ii) $25,000,000 aggregate
principal amount of its 7.04% Senior Notes, Series F, due January 2, 2006 (the
"Series F Notes"; such term to include any notes of the same series issued in
substitution therefor pursuant to Section 13 of this Agreement or the Other
Agreements (as hereinafter defined)) and (iii) $30,000,000 aggregate principal
amount of its 7.08% Senior Notes, Series G, due January 2, 2008 (the "Series G
Notes"; such term to include any notes of the same series issued in
substitution therefor pursuant to Section 13 of this Agreement or the Other
Agreements). The Series E Notes, the Series F Notes and the Series G Notes are
herein collectively referred to as the "Notes".
The Series E Notes shall be substantially in the form set out in
Exhibit 1A, with such changes therefrom, if any, as may be approved by you and
the Company. The Series F Notes shall be substantially in the form set out in
Exhibit 1B, with such changes therefrom, if any, as
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may be approved by you and the Company. The Series G Notes shall be
substantially in the form set out in Exhibit 1C, with such changes therefrom, if
any, as may be approved by you and the Company.
The Notes will be guaranteed by each of the Subsidiary Guarantors.
Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company
will issue and sell to you and you will purchase from the Company, at the
Closing provided for in Section 3, Notes of the series and in the principal
amount specified opposite your name in Schedule A at the purchase price of 100%
of the principal amount thereof. Contemporaneously with entering into this
Agreement, the Company is entering into separate Note Purchase Agreements (the
"Other Agreements"; this Agreement and the Other Agreements shall be
collectively referred to as the "Agreements") identical with this Agreement
with each of the other purchasers named in Schedule A (the "Other Purchasers"),
providing for the sale at such Closing to each of the Other Purchasers of Notes
of the series and in the principal amount specified opposite its name in
Schedule A. Your obligation hereunder, and the obligations of the Other
Purchasers under the Other Agreements, are several and not joint obligations,
and you shall have no obligation under any Other Agreement and no liability to
any Person for the performance or nonperformance by any Other Purchaser
thereunder.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by you and the
Other Purchasers shall occur at the offices of Chapman and Cutler, 111 West
Monroe Street, Chicago, Illinois 60603, at 10:00 A.M. Chicago time, at a
closing (the "Closing") on September 16, 1997. At the Closing the Company will
deliver to you the Notes to be purchased by you in the form of a single Note
for each series of Notes to be purchased by you (or such greater number of
Notes of each series to be purchased by you in denominations of at least
$1,000,000 as you may request) dated the date of the Closing and registered in
your name (or in the name of your nominee), against delivery by you to the
Company or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available funds for the
account of the Company to account number 1459406400 at the principal office of
Bank of America NT&SA, 525 South Flower Street, Los Angeles, California 90071,
ABA #121000358, Attention: Vera Hill,
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Reference: Reliance Steel & Aluminum Co. If at the Closing the Company shall
fail to tender such Notes to you as provided above in this Section 3, or any of
the conditions specified in Section 4 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
Section 4.1. Representations and Warranties. The
representations and warranties of the Company in this Agreement shall be
correct when made and at the time of the Closing.
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 at the
Closing, and after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by Schedule 5.14), no
Default or Event of Default shall have occurred and be continuing. Neither
the Company nor any Restricted Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been prohibited by
Section 10.1, 10.2, 10.3, 10.5 or 10.10 hereof had such Sections applied since
such date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to
you an Officer's Certificate, dated the date of the Closing, certifying that
the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to
you a certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes and the Agreements.
(c) Subsidiary Guarantor Officer's Certificate. Each Subsidiary
Guarantor shall have delivered to you an Officer's Certificate, dated the date
of the Closing, certifying that the representations and warranties of such
Subsidiary Guarantor contained in its Subsidiary Guaranty are true and correct
at the time of the Closing.
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(d) Subsidiary Guarantor Secretary's Certificate. Each Subsidiary
Guarantor shall have delivered to you a certificate certifying as to the
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of its Subsidiary Guaranty.
Section 4.4. Opinions of Counsel. You shall have received
opinions in form and substance satisfactory to you, dated the date of the
Closing (a) from Arter & Hadden, counsel for the Company, covering the matters
set forth in Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably request
(and the Company hereby instructs its counsel to deliver such opinion to you),
(b) from counsel for each Subsidiary Guarantor, covering the matters set forth
in Exhibit 4.4(b) and covering such other matters incident to the transactions
contemplated hereby as you or your counsel may reasonably request (and the
Company hereby instructs such counsel to deliver such opinion to you) and (c)
from Chapman and Cutler, your special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(c) and
covering such other matters incident to such transactions as you may reasonably
request.
Section 4.5. Purchase Permitted By Applicable Law, Etc. On the
date of the Closing your purchase of Notes shall (i) be permitted by the laws
and regulations of each jurisdiction to which you are subject, without recourse
to provisions (such as Section 1405(a)(8) of the New York Insurance Law)
permitting limited investments by insurance companies without restriction as to
the character of the particular investment, (ii) not violate any applicable law
or regulation (including, without limitation, Regulation G, T or X of the Board
of Governors of the Federal Reserve System) and (iii) not subject you to any
tax, penalty or liability under or pursuant to any applicable law or
regulation, which law or regulation was not in effect on the date hereof. If
requested by you, you shall have received an Officer's Certificate certifying
as to such matters of fact as you may reasonably specify to enable you to
determine whether such purchase is so permitted.
Section 4.6. Sale of Other Notes. Contemporaneously with the
Closing, the Company shall sell to the Other Purchasers, and the Other
Purchasers shall purchase, the Notes to be purchased by them at the Closing as
specified in Schedule A.
Section 4.7. Payment of Special Counsel Fees. Without limiting
the provisions of Section 15.1, the Company shall have paid on or before the
Closing the fees, charges and disbursements of your special counsel referred to
in Section 4.4 to the extent reflected in a statement of such counsel rendered
to the Company at least three Business Days prior to the date of the Closing.
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Section 4.8. Private Placement Number. A Private Placement
number issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Series E Notes, the Series F
Notes and the Series G Notes.
Section 4.9. Changes in Corporate Structure. Except as
specified in Schedule 4.9, the Company shall not have changed its jurisdiction
of incorporation or been a party to any merger or consolidation and shall not
have succeeded to all or any substantial part of the liabilities of any other
entity, at any time following the date of the most recent financial statements
referred to in Schedule 5.5.
Section 4.10. Subsidiary Guaranties. Each Subsidiary Guarantor
shall have delivered to you its Subsidiary Guaranty.
Section 4.11. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as you or they may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
Section 5.1. Organization; Power and Authority. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which
the failure to be so qualified or in good standing could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Company has the corporate power and authority to own or hold under lease
the properties it purports to own or hold under lease, to transact the business
it transacts and proposes to transact, to execute and deliver this Agreement
and the Other Agreements and the Notes and to perform the provisions hereof and
thereof.
Section 5.2. Authorization, Etc. This Agreement, the Other
Agreements and the Notes have been duly authorized by all necessary corporate
action on the part of the Company, and this Agreement constitutes, and upon
execution and delivery thereof each Note will constitute, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the
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enforcement of creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
Section 5.3. Disclosure. The Company, through its agent, Bank
of America NT&SA, has delivered to you and each Other Purchaser a copy of a
Private Placement Memorandum, dated August 1997 (the "Memorandum"), relating to
the transactions contemplated hereby, and the Company has delivered to you a
copy of its most recent Quarterly Report on Form 10-Q for the period ending
June 30, 1997. The Memorandum fairly describes, in all material respects, the
general nature of the business and principal properties of the Company and its
Subsidiaries. Except as disclosed in Schedule 5.3, this Agreement, the
Memorandum, the documents, certificates or other writings delivered to you by
or on behalf of the Company in connection with the transactions contemplated
hereby and the financial statements listed in Schedule 5.5, taken as a whole,
do not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made. Except as disclosed in the
Memorandum or 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, 1996, there has
been no change in the financial condition, operations, business, properties
or prospects of the Company or any Subsidiary except changes that individually
or in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could reasonably be
expected to have a Material Adverse Effect that has not been set forth herein
or in the Memorandum or in the other documents, certificates and other writings
delivered to you by or on behalf of the Company specifically for use in
connection with the transactions contemplated hereby.
Section 5.4. Organization and Ownership of Shares of
Subsidiaries; Affiliates. (a) Schedule 5.4 contains (except as noted therein)
complete and correct lists (i) of the Company's Subsidiaries, showing, as to
each Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its capital stock
or similar equity interests outstanding owned by the Company and each other
Subsidiary, (ii) of the Company's Affiliates, other than Subsidiaries, and
(iii) of the Company's directors and senior officers. Schedule 5.4 identifies
which Subsidiaries are designated Restricted Subsidiaries at the date of the
Closing.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Restricted 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).
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(c) Each Restricted 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 Restricted 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 Restricted Subsidiary is a party to, or otherwise subject
to any legal restriction or any agreement (other than this Agreement, the
agreements listed on Schedule 5.4 and customary limitations imposed by
corporate law statutes) restricting the ability of such Restricted Subsidiary
to pay dividends out of profits or make any other similar distributions of
profits to the Company or any of its Restricted Subsidiaries that owns
outstanding shares of capital stock or similar equity interests of such
Restricted Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to
each Purchaser copies of the financial statements of the Company and its
Restricted Subsidiaries listed on Schedule 5.5. All of said financial
statements (including in each case the related schedules and notes) fairly
present in all material respects the consolidated financial position of the
Company and its Restricted Subsidiaries as of the respective dates specified in
such Schedule and the consolidated results of their operations and cash flows
for the respective periods so specified and have been prepared in accordance
with GAAP consistently applied throughout the periods involved except as set
forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
Section 5.6. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not (i) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Restricted Subsidiary under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate charter or by-laws,
or any other agreement or instrument to which the Company or any Restricted
Subsidiary is bound or by which the Company or any Restricted Subsidiary or any
of their respective properties may be bound or affected (the consent of Bank of
America NT&SA shall have been obtained at or prior to the date of the Closing,
(ii) conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator
or Governmental Authority applicable to the Company or any Restricted
Subsidiary or (iii) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or any
Restricted Subsidiary.
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Section 5.7. Governmental Authorizations, Etc. No consent,
approval or authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with the execution, delivery
or performance by the Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and
Orders. (a) 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 Restricted Subsidiary or any property of the
Company or any Restricted Subsidiary in any court or before any arbitrator of
any kind or before or by any Governmental Authority that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any 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 tax returns that are required to have been filed in any jurisdiction, and
have paid all taxes shown to be due and payable on such returns and all other
taxes and assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (i) the amount of which is not individually or in the aggregate
Material or (ii) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as the case may be, has established adequate
reserves in accordance with GAAP. The Company knows of no basis for any other
tax or assessment that could reasonably be expected to have a Material Adverse
Effect. The charges, accruals and reserves on the books of the Company and its
Subsidiaries in respect of Federal, state or other taxes for all fiscal periods
are adequate. The Federal income tax liabilities of the Company and its
Subsidiaries have been determined by the Internal Revenue Service and paid for
all fiscal years up to and including the fiscal year ended December 31, 1988.
Section 5.10. Title to Property; Leases. The Company and its
Restricted 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
Restricted Subsidiary after said date (except as sold or otherwise disposed of
in the ordinary course of business), in each case free and clear of Liens
prohibited by this Agreement. All leases that
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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 Restricted Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights, service
marks, trademarks and trade names, or rights thereto, that individually or in
the aggregate are Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the
Company infringes in any Material respect any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or other
right owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its Restricted
Subsidiaries with respect to any patent, copyright, service mark, trademark,
trade name or other right owned or used by the Company or any of its Restricted
Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each
ERISA Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or
any ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under
the Plans (other than Multiemployer Plans), determined as of the end of such
Plans' most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plans' 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 terms "benefit liabilities" has the meaning specified in
section 4001 of ERISA and the terms "current value" and "present value" have
the meaning specified in section 3 of ERISA.
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(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as
of the last day of the Company's most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Restricted Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance
and sale of the Notes hereunder will not involve any transaction that is
subject to the prohibitions of section 406 of ERISA or in connection with which
a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The
representation by the Company in the first sentence of this Section 5.12(e) is
made in reliance upon and subject to (i) the accuracy of your representation in
Section 6.2 as to the sources of the funds used to pay the purchase price of
the Notes to be purchased by you and (ii) the assumption, made solely for the
purpose of making such representation, that Department of Labor Interpretive
Bulletin 75-2 with respect to prohibited transactions remains valid in the
circumstances of the transactions contemplated herein.
Section 5.13. Private Offering by the Company. Neither the
Company nor anyone acting on its behalf has offered the Notes or any similar
securities for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, any person other
than you, the Other Purchasers and not more than ten other Institutional
Investors, each of which has been offered the Notes at a private sale for
investment. Neither the Company nor anyone acting on its behalf has taken, or
will take, any action that would subject the issuance or sale of the Notes to
the registration requirements of Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company
will apply the proceeds of the sale of the Notes as set forth in Schedule 5.14.
No part of the proceeds from the sale of the Notes hereunder will be used,
directly or indirectly, for the purpose of buying or carrying any margin stock
within the meaning of Regulation G of the Board of Governors of the Federal
Reserve System (12 CFR 207), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve the Company in
a violation of Regulation X of said Board (12 CFR 224) or to involve any broker
or dealer in a violation of Regulation T of said Board (12 CFR 220). As used
in this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation G.
Section 5.15. Existing Debt; Future Liens. (a) Except as
described therein, Schedule 5.15 sets forth a complete and correct list of all
outstanding Debt of the Company and
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its Restricted Subsidiaries as of August 29, 1997, since which date there has
been no Material change in the amounts, interest rates, sinking funds,
installment payments or maturities of the Debt of the Company or its Restricted
Subsidiaries. Neither the Company nor any Restricted Subsidiary is in
default, and no waiver of default is currently in effect, in the payment of any
principal or interest on any Debt of the Company or such Restricted Subsidiary
and no event or condition exists with respect to any Debt of the Company or any
Restricted Subsidiary that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such Debt to become
due and payable before its stated maturity or before its regularly scheduled
dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor
any Restricted Subsidiary has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of its property,
whether now owned or hereafter acquired, to be subject to a Lien not permitted
by Section 10.5.
Section 5.16. Foreign Assets Control Regulations, Etc. Neither
the sale of the Notes by the Company hereunder nor its use of the proceeds
thereof will violate the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto.
Section 5.17. Status under Certain Statutes. Neither the Company
nor any Restricted Subsidiary is subject to regulation under the Investment
Company Act of 1940, as amended, the Public Utility Holding Company Act of
1935, as amended, the Interstate Commerce Act, as amended, or the Federal Power
Act, as amended.
Section 5.18. Environmental Matters. Neither the Company nor any
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Company or
any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws, except, in
each case, such as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed to you in writing:
(a) neither the Company nor any Subsidiary has knowledge
of any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets
or their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
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(b) neither the Company nor any of its Subsidiaries has
(i) stored any Hazardous Materials on real properties now or formerly
owned, leased or operated by any of them or (ii) disposed of any
Hazardous Materials in a manner contrary to any Environmental Laws in
each case in any manner that could reasonably be expected to result in
a Material Adverse Effect; and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Subsidiaries are in
compliance with applicable Environmental Laws, except where failure to
comply could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase for Investment. You represent that (1)
you are purchasing the Notes for your own account or for one or more separate
accounts maintained by you or for the account of one or more pension or trust
funds and not with a view to the distribution thereof, provided that the
disposition of your or their property shall at all times be within your or
their control and (2) you are an "accredited investor" within the meaning of
Rule 501 of Regulation D of the Securities Act. You understand that the Notes
have not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.
Section 6.2. Source of Funds. You represent that at least one
of the following statements is an accurate representation as to each source of
funds (a "Source") to be used by you to pay the purchase price of the Notes to
be purchased by you hereunder:
(a) if you are an insurance company, the Source does not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of Prohibited Transaction
Exemption ("PTE") 90-1 (issued January 29, 1990), or (ii) a bank
collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except as you have disclosed to the
Company in writing
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pursuant to this paragraph (b), no employee benefit plan or group of
plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning
of Part V of the QPAM Exemption), no employee benefit plan's assets
that are included in such investment fund, when combined with the
assets of all other employee benefit plans established or maintained
by the same employer or by an affiliate (within the meaning of Section
V(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of Part l(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
person controlling or controlled by the QPAM (applying the definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Company and (i) the identity of such QPAM and (ii) the
names of all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in writing pursuant
to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or
a separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (e); or
(f) the Source constitutes assets allocated to an
"insurance company general account" (as such term is defined under
Section V of the United States Department of Labor's Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) maintained by you
and the relevant requirements for exemptive relief under Sections I
and IV of PTCE 95-60 as in effect on the date of this representation
have been satisfied; or
(g) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
Section 6.3. Competitors of the Company. You agree that you
will not resell the Notes purchased by you under this Agreement to a Person
which, to the best of your knowledge,
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is a Competitor or Competitor Affiliate. It is understood and agreed that in
establishing compliance by you with the foregoing, you may reasonably rely upon
the written representation of the transferee of a Note to the effect that such
transferee is not a Competitor or Competitor Affiliate.
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:
(i) a consolidated balance sheet of the Company
and its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries for such quarter and (in the case of the second
and third quarters) for the portion of the fiscal year ending
with such quarter, setting forth in each case in comparative
form the figures for the corresponding periods in the previous
fiscal year, all in reasonable detail, prepared in accordance
with GAAP applicable to quarterly financial statements
generally, and certified by a Senior Financial Officer as
fairly presenting, in all material respects, the financial
position of the companies being reported on and their results
of operations and cash flows, subject to changes resulting
from year-end adjustments, provided that delivery within the
time period specified above of copies of the Company's
Quarterly Report on Form 10-Q prepared in compliance with the
requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a);
(b) Annual Statements -- within 105 days after
the end of each fiscal year of the Company, duplicate copies
of,
(i) a consolidated balance sheet of the Company
and its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
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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
(A) by an opinion thereon of independent
certified public accountants of recognized national
standing, which opinion shall state that such
financial statements present fairly, in all material
respects, the financial position of the companies
being reported upon and their results of operations
and cash flows and have been prepared in conformity
with GAAP, and that the examination of such
accountants in connection with such financial
statements has been made in accordance with generally
accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the
circumstances, and
(B) a certificate of such accountants
stating that they have reviewed this Agreement and
stating further whether, in making their audit, they
have become aware of any condition or event that then
constitutes a Default or an Event of Default, and, if
they are aware that any such condition or event then
exists, specifying the nature and period of the
existence thereof (it being understood that such
accountants shall not be liable, directly or
indirectly, for any failure to obtain knowledge of
any Default or Event of Default unless such
accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted
auditing standards or did not make such an audit),
provided that the delivery within the time period specified above of
the Company's Annual Report on Form 10-K for such fiscal year
(together with or followed by the Company's annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under the
Exchange Act delivered within 120 days after the end of such fiscal
year) prepared in accordance with the requirements therefor and filed
with the Securities and Exchange Commission, together with the
accountant's certificate described in clause (B) above, shall be
deemed to satisfy the requirements of this Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic
report, each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary with the
Securities and Exchange Commission and declared effective and of all
press releases and other statements made available generally by the
Company or any Subsidiary to the public concerning developments that
are Material;
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(d) Notice of Default or Event of Default -- promptly,
and in any event within five Business Days after a Responsible Officer
becoming aware of the existence of any Default or Event of Default or
that any Person has given any notice or taken any action with respect
to a claimed default hereunder or that any Person has given any notice
or taken any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the nature
and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within
five Business Days after a Responsible Officer becoming aware of any
of the following involving potential liability of the Company and/or
any of its Subsidiaries in excess of $5,000,000, a written notice
setting forth the nature thereof and the action, if any, that the
Company or an ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable
event, as defined in section 4043(b) of ERISA and the
regulations thereunder, for which notice thereof has not been
waived pursuant to such regulations as in effect on the date
hereof; or
(ii) the taking by the PBGC of steps to institute,
or the threatening by the PBGC of the institution of,
proceedings under section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan,
or the receipt by the Company or any ERISA Affiliate of a
notice from a Multiemployer Plan that such action has been
taken by the PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that
could result in the incurrence of any liability by the Company
or any ERISA Affiliate pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and
in any event within 30 days of receipt thereof, copies of any notice
to the Company or any Subsidiary from any Federal or state
Governmental Authority relating to any order, ruling, statute or other
law or regulation that could reasonably be expected to have a Material
Adverse Effect; and
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(g) Requested Information -- with reasonable promptness,
such other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes.
Section 7.2. Officer's Certificate. Each set of financial
statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section
7.1(b) hereof shall be accompanied by a certificate of a Senior Financial
Officer setting forth:
(a) Covenant Compliance -- the information (including
detailed calculations) required in order to establish whether the
Company was in compliance with the requirements of Section 10.1
through Section 10.7 hereof, inclusive, during the quarterly or annual
period covered by the statements then being furnished (including with
respect to each such Section, where applicable, the calculations of
the maximum or minimum amount, ratio or percentage, as the case may
be, permissible under the terms of such Sections, and the calculation
of the amount, ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall
not have disclosed the existence during such period of any condition
or event that constitutes a Default or an Event of Default or, if any
such condition or event existed or exists (including, without
limitation, any such event or condition resulting from the failure of
the Company or any Subsidiary to comply with any Environmental Law),
specifying the nature and period of existence thereof and what action
the Company shall have taken or proposes to take with respect thereto.
Section 7.3. Inspection. The Company shall permit the
representatives of each holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the
Company, to discuss the affairs, finances and accounts of the Company
and its Subsidiaries with the Company's officers, and (with the
consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of
the Company, which consent will not be unreasonably withheld) to visit
the other offices and properties of the Company and each
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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. Except as provided in
Section 8.2, the Company may not prepay the Notes of any series prior to their
respective expressed maturity date. The entire unpaid principal amount of the
Series E Notes shall become due and payable on January 2, 2002. The entire
unpaid principal amount of the Series F Notes shall become due and payable on
January 2, 2006. The entire unpaid principal amount of the Series G Notes
shall become due and payable on January 2, 2008.
Section 8.2. Optional Prepayments with Make-Whole Amount. The
Company may, at its option, upon notice as provided below, prepay at any time
all, or from time to time any part of, the Notes, in an amount not less than
10% of the aggregate principal amount of the Notes then outstanding in the case
of a partial prepayment, at 100% of the principal amount so prepaid, 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 of
each series to be prepaid on such date, the principal amount of each Note of
each series 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 with respect to each series of Notes in connection with such prepayment
(calculated as if the date of such notice were the date of the prepayment),
setting forth the details of such computation. Two Business Days prior to such
prepayment, the Company shall deliver to each holder of Notes a certificate of
a Senior Financial Officer specifying the calculation of such Make-Whole Amount
as of the specified prepayment date.
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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 (i) among all of the series of Notes at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts of each series of Notes and (ii) among all of the Notes of a
given series 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 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 upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes. 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 of any series, 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" means, with respect to any Note of any
series, the principal of such Note that is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal
of any Note of any series, 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
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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" means, with respect to the Called
Principal of any Note of any series, 0.5% over the yield to maturity
implied by (i) the yields reported, as of 10:00 A.M. (New York City
time) on the second Business Day preceding the Settlement Date with
respect to such Called Principal, on the display designated as page
"USD" of the Bloomberg Financial Markets Services Screen (or such
other display as may replace page "USD" of the Bloomberg Financial
Markets Services Screen) for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or (ii) if such yields are not
reported as of such time or the yields reported as of such time are
not ascertainable, the Treasury Constant Maturity Series Yields
reported, for the latest day for which such yields have been so
reported as of the second Business Day preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical
Release H. 15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of
such Settlement Date. Such implied yield will be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice
and (b) interpolating linearly between (1) the actively traded U.S.
Treasury security with the duration closest to and greater than the
Remaining Average Life and (2) the actively traded U.S. Treasury
security with the duration closest to and less than the Remaining
Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one- twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with respect to
such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of any Note of any series, all payments of such
Called Principal and interest thereon that would be due after the
Settlement Date with respect to such Called Principal if no payment of
such Called Principal were made prior to its scheduled due date,
provided that if such Settlement Date is not a date on which interest
payments are due to be made under the terms of the Notes, then the
amount of the next succeeding scheduled interest payment
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will be reduced by the amount of interest accrued to such Settlement
Date and required to be paid on such Settlement Date pursuant to
Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called Principal
of any Note of any series, 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 from and after the execution and delivery
of this Agreement and so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will and will
cause each of its Subsidiaries to comply with all laws, ordinances or
governmental rules or regulations to which each of them is subject, including,
without limitation, Environmental Laws, and will obtain and maintain in effect
all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent
necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 9.2. Insurance. The Company will and will cause each of
its Restricted Subsidiaries to maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is customary in the
case of entities of established reputations engaged in the same or a similar
business and similarly situated.
Section 9.3. Maintenance of Properties. The Company will and
will cause each of its Restricted Subsidiaries to maintain and keep, or cause
to be maintained and kept, their respective properties in good repair, working
order and condition (other than ordinary wear and tear), so that the business
carried on in connection therewith may be properly conducted at all times,
provided that this Section shall not prevent the Company or any Restricted
Subsidiary from discontinuing the operation and the maintenance of any of its
properties if such discontinuance is desirable in the conduct of its business
and the Company has concluded that such discontinuance could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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Section 9.4. Payment of Taxes and Claims. The Company will and
will cause each of its Subsidiaries to file all tax returns required to be
filed in any jurisdiction and to pay and discharge all taxes shown to be due
and payable on such returns and all other taxes, assessments, governmental
charges, or levies imposed on them or any of their properties, assets, income
or franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent and all claims for which sums
have become due and payable that have or might become a Lien on properties or
assets of the Company or any Subsidiary, provided that neither the Company nor
any Subsidiary need pay any such tax or assessment or claims if (i) the amount,
applicability or validity thereof is contested by the Company or such
Subsidiary on a timely basis in good faith and in appropriate proceedings, and
the Company or a Subsidiary has established adequate reserves therefor in
accordance with GAAP on the books of the Company or such Subsidiary or (ii) the
nonpayment of all such taxes and assessments in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
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 and 10.8, 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 Restricted
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. Subsidiary Guaranties. The Company will cause each
of its Material Subsidiaries existing as of the date of the Closing to execute
and deliver to each holder of Notes, at the Closing, a Guaranty Agreement in
the form attached hereto as Exhibit 9.6 (a "Subsidiary Guaranty"). The Company
will cause (i) each of its Restricted Subsidiaries that becomes a Material
Subsidiary at any time after the Closing and (ii) each Material Subsidiary that
is acquired at any time after the Closing to execute and deliver to each holder
of Notes, immediately upon becoming a Material Subsidiary, a Subsidiary
Guaranty. Notwithstanding the foregoing, you hereby agree that each such
Subsidiary Guaranty shall be released upon your receipt of written evidence,
satisfactory in form and substance to you and your counsel, that no other Debt
of the Company is supported by any Guaranty from any Material Subsidiary. In
the event that the Subsidiary Guaranty is so released and other Debt of the
Company is thereafter supported by any Guaranty from any Material Subsidiary,
the Company will cause each of its Material Subsidiaries that executed and
delivered a Guaranty supporting such other Debt to execute and deliver to each
holder of Notes, a Subsidiary Guaranty.
SECTION 10. NEGATIVE COVENANTS.
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The Company covenants that from and after the execution and delivery
of this Agreement and so long as any of the Notes are outstanding:
Section 10.1. Incurrence of Funded Debt. The Company will not,
and will not permit any Restricted Subsidiary to, directly or indirectly,
create, incur, assume, guarantee, or otherwise become directly or indirectly
liable with respect to, any Funded Debt, except:
(a) Funded Debt evidenced by the Notes;
(b) Funded Debt of the Company and its Restricted
Subsidiaries outstanding on the date hereof and disclosed in Schedule
5.15 hereto;
(c) Funded Debt of the Company in addition to that
otherwise permitted by the foregoing provisions of this Section 10.1,
provided that on the date the Company incurs or otherwise becomes
liable with respect to any such additional Funded Debt and immediately
after giving effect thereto and to the concurrent retirement of any
other Funded Debt, (i) no Default or Event of Default shall exist and
(ii) Consolidated Funded Debt does not exceed 60% of Total
Capitalization; and
(d) Funded Debt of Restricted Subsidiaries permitted by
Section 10.2.
For the purposes of this Section 10.1, any Person becoming a Restricted
Subsidiary after the date hereof shall be deemed, at the time it becomes a
Restricted Subsidiary, to have incurred all of its then outstanding Debt.
Notwithstanding the foregoing, the extension, renewal or refunding (without
increase in principal amount) of any Funded Debt originally incurred within the
limitations contained in this Section 10.1 shall not be considered to be an
incurrence of Funded Debt.
Section 10.2. Subsidiary Debt. The Company will not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume,
guarantee, or otherwise become directly or indirectly liable with respect to,
any Debt, except:
(a) Debt of a Restricted Subsidiary owed to the Company
or to a Wholly-Owned Restricted Subsidiary;
(b) Debt of a Restricted Subsidiary outstanding on the
date hereof and disclosed in Schedule 5.15 hereto, provided that such
Debt may not be extended, renewed or refunded except as otherwise
permitted by this Agreement;
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(c) Debt of a Restricted Subsidiary outstanding at the
time such Restricted Subsidiary becomes a Restricted Subsidiary,
provided that (i) such Debt shall not have been incurred in
contemplation of such Restricted Subsidiary becoming a Restricted
Subsidiary and (ii) immediately after such Restricted Subsidiary
becomes a Restricted Subsidiary no Default or Event of Default shall
exist, and provided, further, that such Debt may not be extended,
renewed or refunded except as otherwise permitted by this Agreement;
(d) Debt of a Restricted Subsidiary in addition to that
otherwise permitted by the foregoing provisions of this Section 10.2,
provided that on the date the Restricted 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, (i) no Default or Event of Default exists and (ii)
the total amount of all Debt of Restricted Subsidiaries plus all Debt
of the Company secured by Liens permitted by Section 10.5(k) does not
exceed 10% of Consolidated Net Worth; and
(e) Debt of any Restricted Subsidiary evidenced by a
Subsidiary Guaranty with respect to the Notes. For the purposes of
this Section 10.2, any Person becoming a Restricted Subsidiary after
the date hereof shall be deemed, at the time it becomes a Restricted
Subsidiary, to have incurred all of its then outstanding Debt.
Section 10.3. Incurrence of Current Debt. The Company will not,
and will not permit any Restricted Subsidiary to, directly or indirectly,
create, incur, assume, guarantee, or otherwise become directly or indirectly
liable with respect to, any Current Debt, unless there shall have been during
the immediately preceding twelve months a period of at least 28 consecutive
days on each of which there shall have been no Current Debt of the Company or
its Restricted Subsidiaries outstanding in excess of the amount of additional
Funded Debt that the Company would have been permitted to (but did not) incur
on such day under Section 10.1(c). Solely for the purpose of calculating the
foregoing limitation on Current Debt, Current Debt shall be deemed to be Funded
Debt and included, without duplication, in the computation of both Consolidated
Funded Debt and Total Capitalization under Section 10.1(c).
For the purposes of this Section 10.3, any Person becoming a Restricted
Subsidiary after the date hereof shall be deemed, at the time it becomes a
Restricted Subsidiary, to have incurred all of its then outstanding Current
Debt.
Section 10.4. Minimum Consolidated Net Worth. The Company will
not, at any time, permit Consolidated Net Worth to be less than $150,000,000.
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Section 10.5. Liens. The Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly create, incur,
assume or permit to exist (upon the happening of a contingency or otherwise)
any Lien on or with respect to any property or asset (including, without
limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any such Restricted Subsidiary, whether now owned
or held or hereafter acquired, or any income or profits therefrom, or assign or
otherwise convey any right to receive income or profits, except:
(a) Liens for taxes, assessments or other governmental
charges which are not yet due and payable or the payment of which is
not at the time required by Section 9.4;
(b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens, in each
case, incurred in the ordinary course of business for sums not yet due
and payable or the payment of which is not at the time required by
Section 9.4;
(c) Liens (other than any Lien imposed by ERISA) incurred
or deposits made in the ordinary course of business (i) in connection
with workers' compensation, unemployment insurance and other types of
social security or retirement benefits, or (ii) to secure (or to
obtain letters of credit that secure) the performance of tenders,
statutory obligations, surety bonds, appeal bonds, 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 Restricted Subsidiaries securing Debt owing to the Company or to
another Restricted Subsidiary;
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(g) Liens existing on the date of this Agreement and
securing the Debt of the Company and its Restricted Subsidiaries
referred to in item 3 of Schedule 5.15;
(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
(or any improvement thereon) acquired or constructed by the Company or
a Restricted Subsidiary after the date of the Closing, provided that
(i) any such Lien shall extend solely to the item
or items of such property (or improvement thereon) so acquired
or constructed,
(ii) the principal amount of the Debt secured by
any such Lien shall at no time exceed an amount equal to the
lesser of (A) the cost to the Company or such Restricted
Subsidiary of the property (or improvement thereon) so
acquired or constructed and (B) the Fair Market Value (as
determined in good faith by the board of directors of the
Company) of such property (or improvement thereon) at the time
of such acquisition or construction, and
(iii) any such Lien shall be created
contemporaneously with, or within 180 days after, the
acquisition or construction of such property;
(i) any Lien existing on property of a Person immediately
prior to its being consolidated with or merged into the Company or a
Restricted Subsidiary or its becoming a Restricted Subsidiary, or any
Lien existing on any property acquired by the Company or any
Restricted Subsidiary at the time such property is so acquired
(whether or not the Debt secured thereby shall have been assumed),
provided that (i) no such Lien shall have been created or assumed in
contemplation of such consolidation or merger or such Person's
becoming a Restricted Subsidiary or such acquisition of property, and
(ii) each such Lien shall extend solely to the item or items of
property so acquired;
(j) any Lien renewing, extending or refunding any Lien
permitted by paragraph (g), (h) or (i) of this Section 10.5, provided
that (i) the principal amount of Debt secured by such Lien immediately
prior to such extension, renewal or refunding is not increased or the
maturity thereof reduced, (ii) such Lien is not extended to any other
property, (iii) immediately after such extension, renewal or refunding
no Default or Event of Default would exist, and (iv) immediately after
such extension, renewal or refunding, the Company would be permitted
to incur at least $1.00 of additional Funded Debt under the provisions
of Section 10.1(c) owing to a Person other than a Restricted
Subsidiary; and
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(k) other Liens not otherwise permitted by paragraphs (a)
through (j), securing Debt of the Company or any Restricted
Subsidiary, provided that the total amount of all Debt of Restricted
Subsidiaries plus all Debt of the Company secured by Liens permitted
by this paragraph (k) does not exceed 10% of Consolidated Net Worth.
Section 10.6. Restrictions on Dividends of Subsidiaries. The
Company will not, and will not permit any of its Restricted Subsidiaries to,
enter into any agreement which would restrict any Restricted Subsidiary's
ability or right to pay dividends to, or make advances to or Investments in,
the Company or, if such Restricted Subsidiary is not directly owned by the
Company, the "parent" Subsidiary of such Restricted Subsidiary.
Section 10.7. Sale of Assets, Etc. Except as permitted under
Section 10.8, the Company will not, and will not permit any of its Restricted
Subsidiaries to, make any Asset Disposition unless:
(a) in the good faith opinion of the 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 Restricted Subsidiary; and
(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 in the then current fiscal
year of the Company would not exceed 10% of Consolidated Total Assets
as of the end of the then most recently ended fiscal year of the
Company; and
(d) immediately after giving effect to the Asset
Disposition, the Company would be permitted to incur at least $1.00 of
additional Funded Debt under the provisions of Section 10.1(c) owing
to a Person other than a Restricted Subsidiary.
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 10.7 as of any date, shall be
deemed not to be an Asset Disposition.
Notwithstanding the foregoing, so long as no Default or Event of
Default shall exist, the Company may, and may permit any Restricted Subsidiary
to, enter into any arrangement whereby the Company or any Restricted Subsidiary
shall sell or transfer any property owned by the
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Company or any Restricted Subsidiary to any Person other than the Company or a
Restricted Subsidiary and, within 180 days after such Asset Disposition, the
Company or any Restricted Subsidiary shall lease or intend to lease, as lessee,
the same property.
Section 10.8. Merger, Consolidation, Etc. The Company will
not, and will not permit any of its Restricted Subsidiaries 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 (except that a Restricted Subsidiary of the Company
may (x) consolidate with or merge with, or convey, transfer or lease
substantially all of its assets in a single transaction or series of
transactions to, the Company or another Restricted Subsidiary of the Company
and (y) convey, transfer or lease all of its assets in compliance with the
provisions of Section 10.7), provided that the foregoing restriction does not
apply to the consolidation or merger of the Company with, or the conveyance,
transfer or lease of substantially all of the assets of the Company in a single
transaction or series of transactions to, any Person so long as:
(a) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by conveyance,
transfer or lease substantially all of the assets of the Company as an
entirety, as the case may be (the "Successor Corporation"), shall be a
solvent corporation organized and existing under the laws of the
United States of America, any State thereof or the District of
Columbia;
(b) if the Company is not the Successor Corporation, such
corporation shall have executed and delivered to each holder of Notes
its assumption of the due and punctual performance and observance of
each covenant and condition of this Agreement and the Notes (pursuant
to such agreements and instruments as shall be reasonably satisfactory
to the Required Holders), and the Company shall have caused to be
delivered to each holder of 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
(c) immediately after giving effect to such transaction:
(i) no Default or Event of Default would exist,
and
(ii) the Successor Corporation would be permitted
by the provisions of Section 10.1(c) hereof to incur at least
$1.00 of additional Funded Debt owing to a Person other than a
Subsidiary of the Successor Corporation.
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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 10.9. Line of Business. The Company will not, and will
not permit any of its Restricted Subsidiaries to, engage in any business if, as
a result, the general nature of the business in which the Company and its
Restricted Subsidiaries, taken as a whole, would then be engaged would be
substantially changed from the general nature of the business in which the
Company and its Restricted Subsidiaries, taken as a whole, are engaged on the
date of this Agreement as described in the Memorandum.
Section 10.10. Transactions with Affiliates. The Company will not
and will not permit any Restricted Subsidiary to enter into directly or
indirectly any transaction or Material group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate (other than the
Company or another Restricted Subsidiary), except in the ordinary course and
pursuant to the reasonable requirements of the Company's or such Restricted
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Restricted Subsidiary than would be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate.
Section 10.11. Designation of Subsidiaries. The Company may
designate any Subsidiary to be a Restricted Subsidiary and may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary by giving written notice
to each holder of Notes that the Board of Directors of the Company has made
such designation, provided, however, that no Subsidiary may be designated a
Restricted Subsidiary and no Restricted Subsidiary may be designated an
Unrestricted Subsidiary unless, at the time of such action and after giving
effect thereto, (i) solely in the case of a Restricted Subsidiary being
designated an Unrestricted Subsidiary, such Restricted Subsidiary being
designated an Unrestricted Subsidiary shall not have any continuing Investment
in the Company or any Restricted Subsidiary, (ii) no Default or Event of
Default shall exist, and (iii) the Company would be permitted to incur at least
$1.00 of additional Funded Debt under the provisions of Section 10.1(c) owing
to a Person other than a Restricted Subsidiary. Any Restricted Subsidiary
which has been designated an Unrestricted Subsidiary and which has then been
designated a Restricted Subsidiary again, in each case in accordance with the
provisions of the immediately preceding sentence shall not at any time
thereafter be an Unrestricted Subsidiary. Any Unrestricted Subsidiary which
has been designated a Restricted Subsidiary and which has then been designated
an Unrestricted Subsidiary again, in each case in accordance with the
provisions of the first sentence of this Section 10.11 shall not at any time
thereafter be a Restricted Subsidiary. Notwithstanding the foregoing, the
Company shall not permit any Subsidiary incorporated under the laws of Mexico
or any State thereof to be designated a Restricted Subsidiary unless, after
giving effect to such designation, the total assets of all
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Restricted Subsidiaries incorporated under the laws of Mexico or any State
thereof (in the aggregate), as of the last day of the immediately preceding
fiscal quarter, would not exceed 10% of Consolidated Total Assets as of such
date, in each case as reflected in the most recent annual or quarterly
financial statements of the Company and its Subsidiaries.
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 10.10,
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 (i) a Responsible
Officer obtaining actual knowledge of such default and (ii) the
Company receiving written notice of such default from any holder of a
Note (any such written notice to be identified as a "notice of
default" and to refer specifically to this paragraph (d) of Section
11; provided that if a default shall occur under Section 10.11, then
promptly upon the remedy of such default the Company shall recalculate
whether the Company was in compliance with Section 10.1 through 10.7
hereof, inclusive, as of the time of the occurrence of such default
(such recalculations to be based upon the corrected designations with
respect to Restricted Subsidiaries and Unrestricted Subsidiaries) and,
if applicable, the Company shall comply with Section 7.1(d)); or
(e) any representation or warranty made in writing by or
on behalf of the Company or any Restricted Subsidiary or by any
officer of the Company in this Agreement, the Subsidiary Guaranty or
in any writing furnished in connection with the transactions
contemplated hereby proves to have been false or incorrect in any
material respect on the date as of which made; or
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(f) (i) the Company or any Restricted Subsidiary is in
default (as principal or as guarantor or other surety) in the payment
of any principal of or premium or make-whole amount or interest on any
Indebtedness that is outstanding in an aggregate principal amount of
at least $5,000,000 beyond any period of grace provided with respect
thereto, or (ii) the Company or any Restricted Subsidiary is in
default in the performance of or compliance with any term of any
evidence of any Indebtedness in an aggregate outstanding principal
amount of at least $5,000,000 or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a
consequence of such default or condition such Indebtedness has become,
or has been declared (or one or more Persons are entitled to declare
such Indebtedness to be), due and payable before its stated maturity
or before its regularly scheduled dates of payment, or (iii) as a
consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the holder
of Indebtedness to convert such Indebtedness into equity interests),
(x) the Company or any Restricted Subsidiary has become obligated to
purchase or repay Indebtedness before its regular maturity or before
its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $5,000,000, or (y) one or more Persons
have the right to require the Company or any Restricted Subsidiary so
to purchase or repay such Indebtedness; or
(g) the Company or any Restricted Subsidiary (i) is
generally not paying, or admits in writing its inability to pay, its
debts as they become due, (ii) files, or consents by answer or
otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its creditors, (iv)
consents to the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, (v) is adjudicated as insolvent or
to be liquidated, or (vi) takes corporate action for the purpose of
any of the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the
Company or any of its Restricted Subsidiaries, a custodian, receiver,
trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, or constituting
an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation
of the Company or any of its Restricted Subsidiaries, or any such
petition shall be filed against the Company or any of its Restricted
Subsidiaries and such petition shall not be dismissed within 60 days;
or
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(i) a final judgment or judgments for the payment of
money aggregating in excess of $2,000,000 are rendered against one or
more of the Company and its Restricted Subsidiaries and which
judgments are not, within 60 days after entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within 60
days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or part
thereof or a waiver of such standards or extension of any amortization
period is sought or granted under section 412 of the Code, (ii) a
notice of intent to terminate any Plan shall have been or is
reasonably expected to be filed with the PBGC and the amount owed by
the Company or any ERISA Affiliate due to such termination exceeds
$5,000,000, or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan
or the PBGC shall have notified the Company or any ERISA Affiliate
that a Plan may become a subject of any such proceedings, (iii) the
aggregate "amount of unfunded benefit liabilities" (within the meaning
of section 4001(a)(18) of ERISA) under all Plans, determined in
accordance with Title IV of ERISA, shall exceed $5,000,000, (iv) the
Company or any ERISA Affiliate shall have incurred or is reasonably
expected to incur any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee
benefit plans, (v) the Company or any ERISA Affiliate withdraws from
any Multiemployer Plan, or (vi) the Company or any Subsidiary
establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the
liability of the Company or any Subsidiary thereunder; and any such
event or events described in clauses (i) through (vi) above, either
individually or together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect; or
(k) any Subsidiary Guarantor shall breach its obligations
under the Subsidiary Guaranty or any Subsidiary Guaranty shall have
been declared to be unenforceable or any Subsidiary Guarantor shall
contest or deny in writing the validity or enforceability of its
obligations under its Subsidiary Guaranty or shall take any other
affirmative action to cause its Subsidiary Guaranty to cease to be
valid or enforceable.
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 or a Restricted Subsidiary described in paragraph (g) or
(h) of Section 11 (other than an Event of
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Default described in clause (i) of paragraph (g) or described in clause (vi) of
paragraph (g) by virtue of the fact that such clause encompasses clause (i) of
paragraph (g)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing,
any holder or holders of more than 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 has occurred and is continuing, any holder or holders of Notes at
the time outstanding affected by such Event of Default may at any time, at its
or their option, by notice or notices to the Company, declare all the Notes
held by it or them to be immediately due and payable.
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 (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the
Company (except as herein specifically provided for), and that the provision
for payment of a Make-Whole Amount by the Company in the event that the Notes
are prepaid or are accelerated as a result of an Event of Default, is intended
to provide compensation for the deprivation of such right under such
circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default
has occurred and is continuing, and irrespective of whether any Notes have
become or have been declared immediately due and payable under Section 12.1,
the holder of any Note at the time outstanding may proceed to protect and
enforce the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein or in any Note, or for an injunction against a violation of
any of the terms hereof or thereof, or in aid of the exercise of any power
granted hereby or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been
declared due and payable pursuant to clause (b) 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
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and Make-Whole Amount, if any, and (to the extent permitted by applicable law)
any overdue interest in respect of the Notes, at the Default Rate, (b) all
Events of Default and Defaults, other than non-payment of amounts that have
become due solely by reason of such declaration, have been cured or have been
waived pursuant to Section 17, and (c) no judgment or decree has been entered
for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc.
No course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power
or remedy conferred by this Agreement or by any Note upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under Section 15,
the Company will pay to the holder of each Note on demand such further amount
as shall be sufficient to cover all costs and expenses of such holder incurred
in any enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys' fees, expenses and disbursements.
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1. Registration of Notes. The Company shall keep at
its principal executive office a register, by series of Notes, 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 of the same
series (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Any transfer shall comply with applicable securities laws.
Each such new
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Note shall be payable to such Person as such holder may request and shall be
substantially in the form of (i) Exhibit 1A, in the case of a Series E Note,
(ii) Exhibit 1B, in the case of a Series F Note, and (iii) Exhibit 1C, in the
case of a Series G Note. 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.
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 $10,000,000,
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 of the same series, 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 Los Angeles, California at the principal
office of Bank of America NT&SA in such jurisdiction. The Company may at any
time, by notice to each holder of a Note, change the place of payment of the
Notes so long as such place of payment shall be either the principal office of
the Company in such jurisdiction or the principal office of a bank or trust
company in such jurisdiction.
Section 14.2. Home Office Payment. So long as you or your
nominee shall be the holder of any Note, and notwithstanding anything contained
in Section 14.1 or in such Note to the
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contrary, the Company will pay all sums becoming due on such Note for
principal, Make-Whole Amount, if any, and interest by the method and at the
address specified for such purpose below your name in Schedule A, or by such
other method or at such other address as you shall have from time to time
specified to the Company in writing for such purpose, without the presentation
or surrender of such Note or the making of any notation thereon, except that
upon written request of the Company made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, you shall surrender
such Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office or at the place of payment most
recently designated by the Company pursuant to Section 14.1. Prior to any sale
or other disposition of any Note held by you or your nominee you will, at your
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to Section 13.2. The
Company will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note purchased by you
under this Agreement and that has made the same agreement relating to such Note
as you have made in this Section 14.2.
SECTION 15. EXPENSES, ETC.
Section 15.1. Transaction Expenses. (a) Whether or not the
transactions contemplated hereby are consummated, the Company will pay the
reasonable attorneys' fees and disbursements of Chapman and Cutler, your
special counsel, incurred in connection with the transactions contemplated by
the Agreements. The Company will pay, and will save you and each other holder
of a Note harmless from, all claims in respect of any fees, costs or expenses,
if any, of brokers and finders (other than those retained by you).
(b) The Company will pay all costs and expenses, including
reasonable attorneys' fees in connection with any amendments, waivers or
consents under or in respect of this Agreement or the Notes (whether or not
such amendment, waiver or consent becomes effective), including, without
limitation: (i) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this
Agreement or the Notes or in responding to any subpoena or other legal process
or informal investigative demand issued in connection with this Agreement or
the Notes, or by reason of being a holder of any Note, and (ii) 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 and by
the Notes.
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.
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SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or
transfer by you of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of you or any
other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject
matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment
or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or
any defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may,
without the written consent of the holder of each Note at the time outstanding
affected thereby, (i) subject to the provisions of Section 12 relating to
acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment or
method of computation of interest or of the Make-Whole Amount on, the Notes,
(ii) change the percentage of the principal amount of the Notes the holders of
which are required to consent to any such amendment or waiver, or (iii) amend
any of Sections 8, 11(a), 11(b), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the 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.
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(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 or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
Section 17.3. Binding Effect, Etc. Any amendment or waiver
consented to as provided in this Section 17 applies equally to all holders of
Notes and is binding upon them and upon each future holder of any Note and upon
the Company without regard to whether such Note has been marked to indicate
such amendment or waiver. No such amendment or waiver will extend to or affect
any obligation, covenant, agreement, Default or Event of Default not expressly
amended or waived or impair any right consequent thereon. No course of dealing
between the Company and the holder of any Note nor any delay in exercising any
rights hereunder or under any Note shall operate as a waiver of any rights of
any holder of such Note. As used herein, the term "this Agreement" and
references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose
of determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the
address specified for such communications in Schedule A, or at such
other address as you or it shall have specified to the Company in
writing,
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(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of the Senior Financial
Officer, or at such other address as the Company shall have specified
to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and you may destroy any original document so reproduced.
The Company agrees and stipulates that, to the extent permitted by applicable
law, any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by you
in the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
This Section 19 shall not prohibit the Company or any other holder of Notes
from contesting any such reproduction to the same extent that it could contest
the original, or from introducing evidence to demonstrate the inaccuracy of any
such reproduction.
SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary
in connection with the transactions contemplated by or otherwise pursuant to
this Agreement that is proprietary in nature and that was clearly marked or
labeled or otherwise adequately identified when received by you 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 you prior to the time of such disclosure, other than by your violation
of the terms of this Section, (b) subsequently becomes publicly known through
no act or omission by you or any person acting on your behalf, (c) otherwise
becomes known to you other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential
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Information in accordance with procedures adopted by you in good faith to
protect confidential information of third parties delivered to you, provided
that you may deliver or disclose Confidential Information to (i) your
directors, officers, employees, agents, attorneys and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment
represented by your Notes), (ii) your financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which you sell or offer
to sell such Note or any part thereof or any participation therein (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (v) any Person
from which you offer to purchase any security of the Company (if such Person
has agreed in writing prior to its receipt of such Confidential Information to
be bound by the provisions of this Section 20), (vi) any federal or state
regulatory authority having jurisdiction over you, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
you are a party (where, in your sole discretion, the information is material
and relevant to the subject matter of the litigation) or (z) if an Event of
Default has occurred and is continuing, to the extent you may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under your Notes
and this Agreement. Each holder of a Note, by its acceptance of a Note, will
be deemed to have agreed to be bound by and to be entitled to the benefits of
this Section 20 as though it were a party to this Agreement. On reasonable
request by the Company in connection with the delivery to any holder of a Note
of information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.
SECTION 21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and
such Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you"
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is used in this Agreement (other than in this Section 21), such word shall be
deemed to refer to such Affiliate in lieu of you. In the event that such
Affiliate is so substituted as a purchaser hereunder and such Affiliate
thereafter transfers to you all of the Notes then held by such Affiliate, upon
receipt by the Company of notice of such transfer, wherever the word "you" is
used in this Agreement (other than in this Section 21), such word shall no
longer be deemed to refer to such Affiliate, but shall refer to you, and you
shall have all the rights of an original holder of the Notes under this
Agreement.
SECTION 22. MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note) whether so
expressed or not.
Section 22.2. Payments Due on Non-Business Days. Anything in
this Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or Make-Whole Amount or interest on any Note that is due on a date
other than a Business Day shall be made on the next succeeding Business Day
without including the additional days elapsed in the computation of the
interest payable on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall (to the full
extent permitted by law) not invalidate or render unenforceable such provision
in any other jurisdiction.
Section 22.4. Construction. Each covenant contained herein shall
be construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to
action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
Section 22.5. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
Section 22.6. Governing Law. This Agreement shall be construed
and enforced in accordance with, and the rights of the parties shall be
governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State that would require the application of the
laws of a jurisdiction other than such State.
-48-
48
* * * * *
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to
the Company, whereupon the foregoing shall become a binding agreement between
you and the Company.
Very truly yours,
RELIANCE STEEL & ALUMINUM CO.
By
Title:
By
Title:
-49-
49
Accepted as of September __, 1997:
[VARIATION]
By
[Title]
-50-
50
Accepted as of September __, 1997:
NATIONWIDE LIFE INSURANCE COMPANY
By
Its
-51-
51
Accepted as of September __, 1997:
GREAT-WEST LIFE & ANNUITY
INSURANCE COMPANY
By
Its
By
Its
-52-
52
Accepted as of September __, 1997:
TRANSAMERICA OCCIDENTAL LIFE
INSURANCE COMPANY
By
Its
-53-
53
Accepted as of September __, 1997:
ALLSTATE LIFE INSURANCE COMPANY
By
Name:
By
Name:
Authorized Signatories
-54-
54
Accepted as of September __, 1997:
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By
Its
-55-
55
Accepted as of September __, 1997:
UNITED OF OMAHA LIFE INSURANCE COMPANY
By
Its
-56-
56
Accepted as of September __, 1997:
CUNA MUTUAL INSURANCE SOCIETY
By CIMCO Inc.
By
Its
-57-
57
Accepted as of September __, 1997:
CUNA MUTUAL LIFE INSURANCE COMPANY
By CIMCO Inc.
By
Its
-58-
58
INFORMATION RELATING TO PURCHASERS
PRINCIPAL AMOUNT OF
NAME AND ADDRESS OF PURCHASER NOTES TO BE PURCHASED
SERIES E
NATIONWIDE LIFE INSURANCE COMPANY $10,000,000
One Nationwide Plaza
Columbus, Ohio 43215-2220
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
"Reliance Steel & Aluminum Co. 6.76% Senior Notes, Series E, due January 2,
2002, PPN 75952* AJ 9, principal or interest") to:
The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Life Insurance Company
Attention: P&I Department
Notices
All notices of payment on or in respect of the Notes and written confirmation
of each such payment to:
Nationwide Life Insurance Company
c/o The Bank of New York
P. O. Box 19266
Newark, NJ 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
SCHEDULE A
(to Note Purchase Agreement)
59
All notices and communications other than those in respect to payments to be
addressed:
Nationwide Life Insurance Company
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 31-4156830
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PRINCIPAL AMOUNT OF
NAME AND ADDRESS OF PURCHASER NOTES TO BE PURCHASED
SERIES F
GREAT-WEST LIFE & ANNUITY $5,000,000
INSURANCE COMPANY
8515 East Orchard Road, 3rd floor, Tower 2
Englewood, Colorado 80111
Attention: U.S. Private Placements
Facsimile: (303) 689-6193
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
"Reliance Steel & Aluminum Co. 7.04% Senior Notes, Series F, due January 2,
2006, PPN 75952* AK 6, principal or interest and confirmation of principal
balance") to:
ABA #091000019
NW MPLS/TRUST CLEARING
Account Number 08-40-245
Attention: GWL Account Number 12468800
Notices
All notices of payments, on or in respect of the Notes and written confirmation
of each such payment to:
Norwest Bank Minnesota, N.A.
733 Marquette Avenue, Investors Building, 5th Floor
Minneapolis, Minnesota 55479-0047
Attention: Income Collections
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: 84-0467907
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PRINCIPAL AMOUNT OF
NAME AND ADDRESS OF PURCHASER NOTES TO BE PURCHASED
SERIES F
TRANSAMERICA OCCIDENTAL LIFE $10,000,000
INSURANCE COMPANY
c/o Transamerica Investment Services
1150 South Olive Street, Suite 2700
Los Angeles, California 90015
Attention: John Casparian
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
"Reliance Steel & Aluminum Co. 7.04% Senior Notes, Series F, due January 2,
2006, PPN 75952* AK 6, principal or interest") to:
Federal Reserve Bank of Boston
Boston Safe Deposit & Trust
Boston, Massachusetts
ABA 011-001-234
Acct#: 12-526-1
FFC: Cost Center 1253
Transamerica Occidental Life Insurance Company
Account Segment: UNI
Account No. TRAF 1505102
Ref: Cusip and Description
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment
and all account statements, to:
Transamerica Life Companies
P. O. Box 2101 - Securities Accounting
Los Angeles, California 90051-0101
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 95-1060502
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PRINCIPAL AMOUNT OF
NAME AND ADDRESS OF PURCHASER NOTES TO BE PURCHASED
SERIES G
ALLSTATE LIFE INSURANCE COMPANY $3,000,000
3075 Sanders Road, STE G3A $6,000,000
Northbrook, Illinois 60062-7127 $6,000,000
Attention: Private Placements Department Telephone Number: (847) 402-4394
Telecopier Number: (847) 402-3092 Payments All payments on or in respect of
the Notes to be made by Fedwire transfer of immediately available funds
(identifying each payment with name of the Issuer (and the Credit, if any), 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 = Reliance Steel & Aluminum Co.
OBI = DPP - 75952* AL 4 --
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
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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
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PRINCIPAL AMOUNT OF
NAME AND ADDRESS OF PURCHASER NOTES TO BE PURCHASED
SERIES G
MASSACHUSETTS MUTUAL LIFE $15,000,000
INSURANCE COMPANY
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Reliance Steel & Aluminum Co. 7.08% Senior Notes, Series G, due January 2,
2008, PPN 75952* AL 4, principal or interest") to:
Citibank, N.A. (ABA #021000089)
111 Wall Street
New York, New York 10043
for credit to: MassMutual Long Term Pool Account Number 4067-3488
Re: Description of security, principal and interest split
With telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413)
744-3878.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed Attention:
Securities Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
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PRINCIPAL AMOUNT OF
NAME AND ADDRESS OF PURCHASER NOTES TO BE PURCHASED
SERIES F
UNITED OF OMAHA LIFE INSURANCE $5,000,000
COMPANY
Mutual of Omaha Plaza
Omaha, Nebraska 68175
Attention: Investment Division/Securities Accounting
Telefacsimile: (402) 351-2913
Confirmation: (402) 351-2583
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
"Reliance Steel & Aluminum Co. 7.04% Senior Notes, Series F, due January 2,
2006, PPN 75952* AK 6, principal or interest") to:
First Bank, N.A. (ABA #1040-0002-9)
17th and Farnam Streets
Omaha, Nebraska 68102
for credit to: United of Omaha Life Insurance Company
Account Number 1-487-1447-0769
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0322111
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PRINCIPAL AMOUNT OF
NAME AND ADDRESS OF PURCHASER NOTES TO BE PURCHASED
SERIES F
CUNA MUTUAL INSURANCE SOCIETY $3,000,000
c/o CIMCO Inc.
5910 Mineral Point Road
Madison, Wisconsin 53705 Attention:
Private Placements
Telecopier Number: (608) 238-2316
Security Description: Reliance Steel
Series F, 7.04%
Par Value of securities purchased: $3,000,000
1. All payments by wire transfer of immediately available federal funds
to:
State Street Bank
ABA 011000028
BNF: CUNA Mutual Insurance Society
AG: DDA: 1044-851-2
OBI: ZT1E
with sufficient information to identify the source and application of
such funds, including cusip, payment date, and principal, premium or
interest on the security.
2. All other communications:
CIMCO Inc.
5910 Mineral Point Road
Madison, WI 53705
Attn: Private Placements
FAX Number: (608) 238-2316
3. Tax Identification No.: 39-0230590
4. All securities being purchased should be registered in the name of
"CUNA Mutual Insurance Society" and delivered to:
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67
The Chase Manhattan Bank and Trust Company
A/C State Street Bank
Attn: Mike Jones
4 New York Plaza, Ground Floor
New York, NY 10004
A/C CUNA Mutual Group
A/C Number: ZT1E
5. Signature page format:
CUNA Mutual Insurance Society
By: CIMCO Inc.
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68
PRINCIPAL AMOUNT OF
NAME AND ADDRESS OF PURCHASER NOTES TO BE PURCHASED
SERIES F
CUNA MUTUAL LIFE INSURANCE COMPANY $2,000,000
c/o CIMCO Inc.
5910 Mineral Point Road
Madison, Wisconsin 53705
Attention: Private Placements
Telecopier Number: (608) 238-2316
Security Description: Reliance Steel
Series F, 7.04%
Par Value of securities purchased: $2,000,000
1. All payments by wire transfer of immediately available federal funds
to:
State Street Bank
ABA 011000028
BNF: CUNA Mutual Life Insurance Company
AG: DDA: 1044-854-6
OBI: ZT2A
with sufficient information to identify the source and application of
such funds, including cusip, payment date, and principal, premium or
interest on the security.
2. All other communcations:
CIMCO Inc.
5910 Mineral Point Road
Madison, WI 53705
Attn: Private Placements
FAX Number: (608) 238-2316
3. Tax Identification No.: 42-0388260
4. All securities being purchase should be registered in the name of
"CUNA Mutual Life Insurance Company" and delivered to:
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The Chase Manhattan Bank and Trust Company
A/C State Street Bank
Attn: Mike Jones
4 New York Plaza, Ground Floor
New York, NY 10004
A/C CUNA Mutual Group
A/C Number: ZT2A
5. Signature page format:
CUNA Mutual Life Insurance Company
By: CIMCO Inc.
A-70
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DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a)
any other Person (other than a Restricted Subsidiary) 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
Person (other than a Restricted Subsidiary) beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or equity interests
of the Company or any Restricted Subsidiary or any corporation of which the
Company and its Restricted Subsidiaries beneficially own or hold, in the
aggregate, directly or indirectly, 10% or more of any class of voting or equity
interests and (c) any other Person that is an officer or director of such first
Person. 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.
"Agreements" is defined in Section 2.
"Asset Disposition" means any Transfer except:
(a) any
(i) Transfer from a Restricted Subsidiary to the
Company or a Wholly-Owned Restricted Subsidiary;
(ii) Transfer from the Company to a Wholly-Owned
Restricted Subsidiary; and
(iii) Transfer from the Company to a Restricted
Subsidiary (other than a Wholly-Owned Restricted Subsidiary)
or from a Restricted Subsidiary to another Restricted
Subsidiary, which in either case is for Fair Market Value,
so long as immediately before and immediately after the consummation
of any such Transfer and after giving effect thereto, no Default or
Event of Default exists and the Company would be permitted to incur at
least $1.00 of additional Funded Debt under the provisions of Section
10.1(c) owing to a Person other than a Restricted Subsidiary; and
SCHEDULE B
(to Note Purchase Agreement)
71
(b) any Transfer made in the ordinary course of business
and involving only property that is either (i) inventory held for sale
or (ii) equipment, fixtures, supplies or materials that are obsolete.
"Business Day" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Los Angeles, California or New York, New York
are required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and
the incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to
time.
"Company" means Reliance Steel & Aluminum Co., a California
corporation.
"Competitor" shall mean any Person which is primarily engaged in the
metals service center industry and the electro-polishing of stainless steel
tubing and "Competitor Affiliate" shall mean with respect to any Competitor (a)
any other Person at the time directly or indirectly controlling, controlled by
or under direct or indirect common control with such Competitor, (b) any other
Person of which such Competitor at the time owns 25% or more on a consolidated
basis of the equity interest of such Person, and (c) any other Person which at
the time owns 25% or more of any class of the capital stock of such Competitor,
provided that:
(a) the provision of investment advisory services by a
Person to a Plan which is owned or controlled by a Person which would
otherwise be a Competitor or Competitor Affiliate shall not of itself
cause the Person providing such services to be deemed to be a
Competitor or Competitor Affiliate;
(b) in no event shall an Institutional Investor be deemed
a Competitor or Competitor Affiliate unless such Institutional
Investor controls or is controlled by, or is
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72
under common control with, a Person which is primarily engaged in the
metals service center industry and the electro-polishing of stainless
steel tubing; and
(c) an Institutional Investor which would otherwise be
deemed a Competitor or Competitor Affiliate pursuant to the foregoing
provisions of this definition by virtue of its ownership or control as
a portfolio investment of the equity Securities of any Person
primarily engaged in the metals service center industry and the
electro-polishing of stainless steel tubing shall not be deemed a
Competitor or Competitor Affiliate if such Institutional Investor has
established "firewall" like-procedures which will prevent confidential
information supplied to such Institutional Investor by the Company
from being transmitted or otherwise made available to such Person.
"Confidential Information" is defined in Section 20.
"Consolidated Funded Debt" means, as of any date of determination, the
total of all Funded Debt of the Company and its Restricted Subsidiaries
outstanding on such date, after eliminating all offsetting debits and credits
between the Company and its Restricted Subsidiaries and all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of the Company and its Restricted Subsidiaries in
accordance with GAAP.
"Consolidated Net Worth" means, at any time,
(a) the sum of (i) the par value of the capital stock
(but excluding treasury stock and capital stock subscribed and
unissued) of the Company and its Restricted Subsidiaries plus (ii) the
amount of the paid-in capital and retained earnings of the Company and
its Restricted Subsidiaries, in each case as such amounts would be
shown on a consolidated balance sheet of the Company and its
Restricted Subsidiaries as of such time prepared in accordance with
GAAP, minus
(b) to the extent included in clause (a) above, all
amounts properly attributable to minority interests, if any, in the
stock and surplus of Restricted Subsidiaries, minus
(c) the book value (established at the date of
incurrence) of all Restricted Investments incurred after the date of
the Closing in excess of an amount equal to 5% of the amount
determined pursuant to clause (a) above.
"Consolidated Total Assets" means, at any time, the total assets of
the Company and its Restricted Subsidiaries which would be shown as assets on a
consolidated balance sheet of the Company and its Restricted Subsidiaries as of
such time prepared in accordance with GAAP, after
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73
eliminating all amounts properly attributable to minority interests, if any, in
the stock and surplus of Restricted Subsidiaries.
"Current Debt" means, with respect to any Person, all Debt of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures on demand or within one year from the date of the
creation thereof and is not directly or indirectly renewable or extendible at
the option of the obligor in respect thereof to a date one year or more from
such date, provided that (a) Debt outstanding under a revolving credit or
similar agreement which obligates the lender or lenders to extend credit over a
period of one year or more and (b) Current Maturities of Funded Debt shall
constitute Funded Debt and not Current Debt, even though such Debt by its terms
matures on demand or within one year from such date.
"Current Maturities of Funded Debt" means, at any time and with
respect to any item of Funded Debt, the portion of such Funded Debt outstanding
at such time which by the terms of such Funded Debt or the terms of any
instrument or agreement relating thereto is due on demand or within one year
from such time (whether by sinking fund, other required prepayment or final
payment at maturity) and is not directly or indirectly renewable, extendible or
refundable at the option of the obligor under an agreement or firm commitment
in effect at such time to a date one year or more from such time.
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising
in the ordinary course of business but including, without limitation,
all liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person (whether or not
it has assumed or otherwise become liable for such liabilities);
(e) all recourse obligations of such Person related to
Receivable Securitization transactions;
(f) all obligations of such Person in respect of
mandatorily redeemable preferred stock;
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74
(g) the face amount of all letters of credit issued for
the account of such Person and all drafts drawn thereunder, other than
undrawn amounts under letters of credit used in the ordinary course of
business; and
(h) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a) through (g)
hereof.
Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"Debt Prepayment Application" means, with respect to any Transfer of
property, the application by the Company or its Restricted Subsidiaries of cash
in an amount equal to the Net Proceeds Amount with respect to such Transfer to
pay Senior Debt of the Company (other than Debt owing to the Company, any of
its Subsidiaries or any Affiliate).
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" means, with respect to amounts owing in respect of any
series of Notes, that rate of interest that is the greater of (i) 2% per annum
above the rate of interest stated in clause (a) of the first paragraph of the
Notes of the applicable series or (ii) the default rate of interest applicable
as of the date of any determination hereunder to Debt outstanding under that
certain First Amended and Restated Business Loan Agreement dated as of June 26,
1996 between Bank of America NT&SA and the Company, as amended (or any credit
facility entered into in replacement thereof).
"Disposition Value" means, at any time, with respect to any property
(a) in the case of property that does not constitute
Subsidiary Stock, the book 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.
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75
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, at any time and with respect to any
property, the sale value of such property that would be realized in an
arm's-length sale at such time between an informed and willing buyer and an
informed and willing seller (neither being under a compulsion to buy or sell).
"Funded Debt" means, with respect to any Person, all Debt of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendible at the option
of the obligor in respect thereof to a date one year or more (including,
without limitation, an option of such obligor under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over a
period of one year or more) from, the date of the creation thereof, provided
that Funded Debt shall include, as at any date of determination, Current
Maturities of Funded Debt.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
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(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to,
any such government.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of such indebtedness or obligation, or (ii) to maintain any
working capital or other balance sheet condition or any income
statement condition of any other Person or otherwise to advance or
make available funds for the purchase or payment of such indebtedness
or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of any other Person to make
payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor
under any Guaranty, the indebtedness or other obligations that are the subject
of such Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety,
the removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
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77
"holder" means, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
Section 13.1.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising
in the ordinary course of business but including all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person (whether or not
it has assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of performance bonds
or letters of credit or instruments serving a similar function issued
or accepted for its account by banks and other financial institutions
(whether or not representing obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a) through (f)
hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"Institutional Investor" means (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.
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78
"Investment" means any investment, made in cash or by delivery of
property, by the Company or any of its Restricted Subsidiaries (i) in any
Person, whether by acquisition of stock, Debt or other obligation or security,
or by loan, Guaranty, advance, capital contribution or otherwise, or (ii) in
any property.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.6.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Restricted Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries taken as a whole, or (b) the ability of
the Company to perform its obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement, the Subsidiary Guaranty,
if any, or the Notes.
"Material Subsidiary" means, at any time, MetalCenter, Inc., Valex
Corp., CCC Steel, Inc., Siskin Steel & Supply Company, Inc., AMI Metals, Inc.
and any other Restricted Subsidiary having at such time either (i) total net
revenues for the period of the immediately preceding four fiscal quarters equal
to or greater than 10% of the consolidated total net revenues of the Company
and its Subsidiaries for such period or (ii) total assets, as of the last day
of the immediately preceding fiscal quarter, equal to or greater than 10% of
the Consolidated Total Assets as of such date, in each case as reflected in the
most recent annual or quarterly financial statements of the Company and its
Subsidiaries.
"Memorandum" is defined in Section 5.3.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"Net Proceeds Amount" means, with respect to any Transfer of any
Property by any Person, an amount equal to the difference of
B-80
79
(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) received by such Person in respect of
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 Section 1.
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"Other Agreements" is defined in Section 2.
"Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any
liability.
"Preferred Stock" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"Property Reinvestment Application" means, with respect to any
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
Restricted Subsidiary of operating assets of the Company or any Restricted
Subsidiary to be used in the ordinary course of business of such Person.
B-81
80
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Receivable Securitization" means any transaction pursuant to which
(i) accounts receivable are sold or transferred and (ii) the seller of such
accounts receivable (a) retains an interest in the accounts receivable sold or
transferred or (b) assumes any liability in connection with such sale or
transfer.
"Required Holders" means, 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 or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer.
"Restricted Investments" means all Investments except the following:
(a) property to be used in the ordinary course of
business of the Company and its Subsidiaries;
(b) current assets arising from the sale of goods and
services in the ordinary course of business of the Company and its
Subsidiaries;
(c) Investments in one or more Restricted Subsidiaries or
any Person that concurrently with such Investment becomes a Restricted
Subsidiary;
(d) Investments existing on the date of the Closing and
disclosed in Schedule C (including the Company's 50% equity investment
in American Steel L.L.C. in an amount equal to $30,205,000 as of June
30, 1997);
(e) Investments in United States Governmental Securities,
provided that such obligations mature within three years from the date
of acquisition thereof;
(f) Investments in tax-exempt obligations of any state of
the United States of America, or any municipality of any such state,
in each case rated one of the two highest ratings by at least one
credit rating agency of recognized national standing, provided that
such obligations mature within three years from the date of
acquisition thereof;
(g) Investments in certificates of deposit or banker's
acceptances issued by an Acceptable Bank, provided that such
obligations mature within 365 days from the date of acquisition
thereof;
B-82
81
(h) Investments in commercial paper given one of the two
highest ratings by at least one credit rating agency of recognized
national standing and maturing not more than 270 days from the date of
creation thereof; and
(i) Investments in money market instrument programs which
are classified as current assets in accordance with GAAP, which money
market instrument programs are administered by an Acceptable Bank.
As of any date of determination, each Restricted Investment shall be
valued at the greater of:
(x) the amount at which such Restricted Investment is
shown on the books of the Company or any of its Restricted
Subsidiaries (or zero if such Restricted Investment is not shown on
any such books); and
(y) either
(i) in the case of any Guaranty of the obligation of any
Person, the amount which the Company or any of its Restricted
Subsidiaries has paid on account of such obligation less any
recoupment by the Company or such Restricted Subsidiary of any such
payments, or
(ii) in the case of any other Restricted Investment, the
excess of (x) the greater of (A) the amount originally entered on the
books of the Company or any of its Restricted Subsidiaries with
respect thereto and (B) the cost thereof to the Company or its
Restricted Subsidiary over (y) any return of capital (after income
taxes applicable thereto) upon such Restricted Investment through the
sale or other liquidation thereof or part thereof or otherwise.
As used in this definition of "Restricted Investments":
"Acceptable Bank" means Bank of America NT&SA and any other
bank or trust company (i) which is organized under the laws of the
United States of America or any State thereof, (ii) which has capital,
surplus and undivided profits aggregating at least $250,000,000, and
(iii) whose long-term unsecured debt obligations (or the long-term
unsecured debt obligations of the bank holding company owning all of
the capital stock of such bank or trust company) shall have been given
one of the two highest ratings by at least one credit rating agency of
recognized national standing.
B-83
82
"United States Governmental Security" means any direct
obligation of, or obligation guaranteed by, the United States of
America, or any agency controlled or supervised by or acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America, so long as
such obligation or guarantee shall have the benefit of the full faith
and credit of the United States of America which shall have been
pledged pursuant to authority granted by the Congress of the United
States of America.
"Restricted Subsidiary" shall mean MetalCenter, Inc., Valex Corp., CCC
Steel, Inc., Siskin Steel & Supply Company, Inc., AMI Metals, Inc., Amalco
Metals, Inc. and any other Subsidiary (i) which is designated a Restricted
Subsidiary by the Board of Directors of the Company in accordance with Section
10.11; (ii) which is organized under the laws of the United States or any State
thereof or Canada or any Province thereof or, subject to the last sentence of
Section 10.11, Mexico or any State thereof; (iii) which conducts substantially
all of its business and has substantially all of its assets within the United
States or Canada or, subject to the last sentence of Section 10.11, Mexico or
any State thereof; and (iv) of which at least 80% (by number of votes) of the
voting interests is owned by the Company and/or one or more Wholly- Owned
Restricted Subsidiaries.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Senior Debt" of any Person means any Current Debt or Funded Debt of
such Person not expressed to be subordinate or junior to any other Debt of such
Person.
"Senior Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Company.
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient equity or
voting interests to enable it or them (as a group) ordinarily, in the absence
of contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person
or one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of
its Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
Notwithstanding the foregoing, American Steel, L.L.C. shall not be considered a
Subsidiary for any purpose of this Agreement.
"Subsidiary Guarantor" means any Material Subsidiary.
B-84
83
"Subsidiary Guaranty" is defined in Section 9.6.
"Subsidiary Stock" means, 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.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"Total Capitalization" means the sum of (i) Consolidated Funded Debt
plus (ii) Consolidated Net Worth.
"Transfer" means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its
property, including, without limitation, Subsidiary Stock. 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.
"Unrestricted Subsidiary" shall mean any Subsidiary that is not a
Restricted Subsidiary.
"Wholly-Owned Restricted Subsidiary" means, at any time, any
Restricted Subsidiary one hundred percent (100%), or in the case of Valex Corp.
ninety-five percent (95%), 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 Restricted Subsidiaries at
such time.
B-85
84
EXISTING INVESTMENTS
SCHEDULE C
(to Note Purchase Agreement)
85
CHANGES IN CORPORATE STRUCTURE
SCHEDULE 4.9
(to Note Purchase Agreement)
86
DISCLOSURE MATERIALS
SCHEDULE 5.3
(to Note Purchase Agreement)
87
SUBSIDIARIES OF THE COMPANY
AND OWNERSHIP OF SUBSIDIARY STOCK
SCHEDULE 5.4
(to Note Purchase Agreement)
88
FINANCIAL STATEMENTS
SCHEDULE 5.5
(to Note Purchase Agreement)
89
CERTAIN LITIGATION
SCHEDULE 5.8
(to Note Purchase Agreement)
90
PATENTS, ETC.
SCHEDULE 5.11
(to Note Purchase Agreement)
91
USE OF PROCEEDS
SCHEDULE 5.14
(to Note Purchase Agreement)
92
EXISTING DEBT
SCHEDULE 5.15
(to Note Purchase Agreement)
93
[FORM OF SERIES E NOTE]
RELIANCE STEEL & ALUMINUM CO.
6.76% SENIOR NOTE, SERIES E, DUE JANUARY 2, 2002
No. [ER-___] [Date]
$[____________] PPN 75952* AJ 9
FOR VALUE RECEIVED, the undersigned, RELIANCE STEEL & ALUMINUM CO.
(herein called the "Company"), a corporation organized and existing under the
laws of the State of California, hereby promises to pay to [________________],
or registered assigns, the principal sum of [________________] DOLLARS on
January 2, 2002, 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 6.76%
per annum from the date hereof, payable semiannually, on the last day of June
and December in each year, commencing with the June 30 or December 31 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 Agreements referred to below), payable semiannually as aforesaid
(or, at the option of the registered holder hereof, on demand), at a rate per
annum equal to the greater of (i) 8.76% or (ii) the default rate of interest
applicable as of the date of any determination hereunder to Debt outstanding
under that certain First Amended and Restated Business Loan Agreement dated as
of June 26, 1996 between Bank of America NT&SA and the Company, as amended (or
any credit facility entered into in replacement thereof).
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 NT&SA, in Los Angeles,
California or at such other place as the Company shall have designated by
written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of 6.76% Senior Notes, Series E, due
January 2, 2002 issued in an aggregate principal amount of $10,000,000 (the
"Series E Notes"), together with the 7.04% Senior Notes, Series F, due January
2, 2006 issued in an aggregate principal amount of $25,000,000 (the "Series F
Notes") and the 7.08% Senior Notes, Series G, due January 2, 2008 issued in an
aggregate principal amount of $30,000,000 (the "Series G Notes"), pursuant to
separate Note Purchase Agreements, dated September 15, 1997 (as from time to
time amended,
EXHIBIT 1A
(to Note Purchase Agreement)
94
the "Note Purchase Agreements"), between the Company and the respective
Purchasers named therein and is entitled to the benefits thereof. Each holder
of this Note will be deemed, by its acceptance hereof, (i) to have agreed to
the confidentiality provisions set forth in Section 20 of the Note Purchase
Agreements and (ii) to have made the representation set forth in Section 6.2 of
the Note Purchase Agreements. Capitalized terms used herein shall have the
meanings set forth in the Note Purchase Agreements unless defined herein.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
The payment by the Company of all amounts due with respect to the
Notes has been unconditionally guaranteed by the Material Subsidiaries of the
Company pursuant to the Subsidiary Guaranty.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
RELIANCE STEEL & ALUMINUM CO.
By
[Title]
By
[Title]
E-1A-96
95
[FORM OF SERIES F NOTE]
RELIANCE STEEL & ALUMINUM CO.
7.04% SENIOR NOTE, SERIES F, DUE JANUARY 2, 2006
No. [FR-___][Date]
$[____________]PPN 75952* AK 6
FOR VALUE RECEIVED, the undersigned, RELIANCE STEEL & ALUMINUM CO.
(herein called the "Company"), a corporation organized and existing under the
laws of the State of California, hereby promises to pay to [________________],
or registered assigns, the principal sum of [________________] DOLLARS on
January 2, 2006, 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 7.04%
per annum from the date hereof, payable semiannually, on the last day of June
and December in each year, commencing with the June 30 or December 31 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 Agreements referred to below), payable semiannually as aforesaid
(or, at the option of the registered holder hereof, on demand), at a rate per
annum equal to the greater of (i) 9.04% or (ii) the default rate of interest
applicable as of the date of any determination hereunder to Debt outstanding
under that certain First Amended and Restated Business Loan Agreement dated as
of June 26, 1996 between Bank of America NT&SA and the Company, as amended (or
any credit facility entered into in replacement thereof).
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 NT&SA, in Los Angeles,
California or at such other place as the Company shall have designated by
written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of 7.04% Senior Notes, Series F, due
January 2, 2006 issued in an aggregate principal amount of $25,000,000 (the
"Series F Notes"), together with the 6.76% Senior Notes, Series E, due January
2, 2002 issued in an aggregate principal amount of $10,000,000 (the "Series E
Notes") and the 7.08% Senior Notes, Series G, due January 2, 2008 issued in an
aggregate principal amount of $30,000,000 (the "Series G Notes"), pursuant to
separate Note Purchase Agreements, dated September 15, 1997 (as from time to
time amended,
EXHIBIT 1B
(to Note Purchase Agreement)
96
the "Note Purchase Agreements"), between the Company and the respective
Purchasers named therein and is entitled to the benefits thereof. Each holder
of this Note will be deemed, by its acceptance hereof, (i) to have agreed to
the confidentiality provisions set forth in Section 20 of the Note Purchase
Agreements and (ii) to have made the representation set forth in Section 6.2 of
the Note Purchase Agreements. Capitalized terms used herein shall have the
meanings set forth in the Note Purchase Agreements unless defined herein.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
The payment by the Company of all amounts due with respect to the
Notes has been unconditionally guaranteed by the Material Subsidiaries of the
Company pursuant to the Subsidiary Guaranty.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
RELIANCE STEEL & ALUMINUM CO.
By
[Title]
By
[Title]
E-1B-99
97
[FORM OF SERIES G NOTE]
RELIANCE STEEL & ALUMINUM CO.
7.08% SENIOR NOTE, SERIES G, DUE JANUARY 2, 2008
No. [GR-___] [Date]
$[____________] PPN 75952* AL 4
FOR VALUE RECEIVED, the undersigned, RELIANCE STEEL & ALUMINUM CO.
(herein called the "Company"), a corporation organized and existing under the
laws of the State of California, hereby promises to pay to
[______________________], or registered assigns, the principal sum of
[________________________] DOLLARS on January 2, 2008, with interest (computed
on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid
balance thereof at the rate of 7.08% per annum from the date hereof, payable
semiannually, on the last day of June and December in each year, commencing
with the June 30 or December 31 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 Agreements referred to
below), payable semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum equal to the greater of (i)
9.08% or (ii) the default rate of interest applicable as of the date of any
determination hereunder to Debt outstanding under that certain First Amended
and Restated Business Loan Agreement dated as of June 26, 1996 between Bank of
America NT&SA and the Company, as amended (or any credit facility entered into
in replacement thereof).
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 NT&SA, in Los Angeles,
California or at such other place as the Company shall have designated by
written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of 7.08% Senior Notes, Series G, due
January 2, 2008 issued in an aggregate principal amount of $30,000,000 (the
"Series G Notes"), together with the 6.76% Senior Notes, Series E, due January
2, 2002 issued in an aggregate principal amount of $10,000,000 (the "Series E
Notes") and the 7.04% Senior Notes, Series F, due January 2, 2006 issued in an
aggregate principal amount of $25,000,000 (the "Series F Notes"), pursuant to
separate Note Purchase Agreements, dated September 15, 1997 (as from time to
time amended,
EXHIBIT 1C
(to Note Purchase Agreement)
98
the "Note Purchase Agreements"), between the Company and the respective
Purchasers named therein and is entitled to the benefits thereof. Each holder
of this Note will be deemed, by its acceptance hereof, (i) to have agreed to
the confidentiality provisions set forth in Section 20 of the Note Purchase
Agreements and (ii) to have made the representation set forth in Section 6.2 of
the Note Purchase Agreements. Capitalized terms used herein shall have the
meanings set forth in the Note Purchase Agreements unless defined herein.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
The payment by the Company of all amounts due with respect to the
Notes has been unconditionally guaranteed by the Material Subsidiaries of the
Company pursuant to the Subsidiary Guaranty.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
RELIANCE STEEL & ALUMINUM CO.
By
[Title]
By
[Title]
E-1C-102
99
FORM OF OPINION OF SPECIAL COUNSEL
TO THE COMPANY
The closing opinion of Arter & Hadden, special counsel to the Company,
which is called for by Section 4.4(a) of the Note Purchase Agreement, shall be
dated the date of the Closing and addressed to the Purchasers, shall be
satisfactory in scope and form to the Purchasers and shall be to the effect
that:
1. The Company is a corporation, duly incorporated,
validly existing and in good standing under the laws of the State of
California, has the corporate power and the corporate authority to
execute and perform the Note Purchase Agreement and to issue the Notes
and has the full corporate power and the corporate authority to
conduct the activities in which it is now engaged and is duly
qualified and is in good standing as a foreign corporation in each
jurisdiction in which the character of the properties owned or leased
by it or the nature of the business transacted by it makes such
qualification necessary.
2. Each Restricted Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of
its jurisdiction of incorporation and is duly qualified and is in good
standing in each jurisdiction in which the character of the properties
owned or leased by it or the nature of the business transacted by it
makes such qualification necessary and all of the issued and
outstanding shares of capital stock of each such Restricted Subsidiary
have been duly issued, are fully paid and non- assessable and, except
for 3,000 shares (representing less than 3% of the issued and
outstanding shares) of the capital stock of Valex Corp. owned by the
President of Valex Corp., are owned by the Company.
3. The Note Purchase Agreement has been duly authorized
by all necessary corporate action on the part of the Company, has been
duly executed and delivered by the Company and constitutes the legal,
valid and binding contract of the Company enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of
such principles is considered in a proceeding in equity or at law).
4. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed
and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance
and
EXHIBIT 4.4(a)
(to Note Purchase Agreement)
100
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
5. No approval, consent or withholding of objection on
the part of, or filing, registration or qualification with, any
governmental body, Federal or state, is necessary in connection with
the execution and delivery of the Note Purchase Agreement or the
Notes.
6. The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Note Purchase Agreement
do not conflict with or result in any breach of any of the provisions
of or constitute a default under or result in the creation or
imposition of any Lien upon any of the property of the Company
pursuant to the provisions of the Articles of Incorporation or By-laws
of the Company or any agreement or other instrument known to such
counsel to which the Company is a party or by which the Company may be
bound.
7. The issuance, sale and delivery of the Notes under
the circumstances contemplated by the Note Purchase Agreement do not,
under existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
8. There are no actions, suits or proceedings pending
or, to the knowledge of such counsel, threatened against or affecting
the Company or any Restricted Subsidiary or any property of the
Company or any Restricted Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority
either (i) with respect to the Note Purchase Agreement or the Notes or
(ii) that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
9. The issuance of the Notes and the use of the proceeds
of the sale of the Notes in accordance with the provisions of and as
contemplated by the Note Purchase Agreement (including, without
limitation, the representations and warranties set forth in the Note
Purchase Agreement) do not violate or conflict with Regulation G, T or
X of the Board of Governors of the Federal Reserve System.
10. The Company is not an "investment company," or a
company "controlled" by an "investment company," under the Investment
Company Act of 1940, as amended.
The opinion of Arter & Hadden is limited to the laws of the State of
California, the laws of the State of New York, the Federal laws of the United
States and the securities laws of the Purchasers' states of residence, shown in
Exhibit A, as reported in current standard compilations
E-4.4(a)-105
101
thereof. The opinion of Arter & Hadden shall cover such other matters relating
to the sale of the Notes as the Purchasers may reasonably request. With
respect to matters of fact on which such opinion is based, such counsel shall
be entitled to rely on appropriate certificates of public officials and
officers of the Company and representations of the Purchasers set forth in the
Note Purchase Agreement.
E-4.4(a)-106
102
FORM OF OPINION OF SPECIAL COUNSEL
TO THE SUBSIDIARY GUARANTORS
The closing opinion of special counsel to each Subsidiary Guarantor,
which is called for by Section 4.4(b) of the Note Purchase Agreement, shall be
dated the date of the Closing and addressed to the Purchasers, shall be
satisfactory in scope and form to the Purchasers and shall be to the effect
that:
1. The Subsidiary Guarantor is a corporation, duly
incorporated, validly existing and in good standing under the laws of
the State of ________, has the corporate power and the corporate
authority to execute and perform the Subsidiary Guaranty to which it
is a party and has the full corporate power and the corporate
authority to conduct the activities in which it is now engaged and is
duly qualified and is in good standing as a foreign corporation in
each jurisdiction in which the character of the properties owned or
leased by it or the nature of the business transacted by it makes such
qualification necessary.
2. The Subsidiary Guaranty to which it is a party has
been duly authorized by all necessary corporate action on the part of
the Subsidiary Guarantor, has been duly executed and delivered by the
Subsidiary Guarantor and constitutes the legal, valid and binding
contract of the Subsidiary Guarantor enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent conveyance
and similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
3. No approval, consent or withholding of objection on
the part of, or filing, registration or qualification with, any
governmental body, Federal or state, is necessary in connection with
the execution and delivery of the Subsidiary Guaranty to which it is a
party.
4. The execution, delivery and performance by the
Subsidiary Guarantor of the Subsidiary Guaranty to which it is a party
do not conflict with or result in any breach of any of the provisions
of or constitute a default under or result in the creation or
imposition of any Lien upon any of the property of the Subsidiary
Guarantor pursuant to the provisions of the ___________ of
Incorporation or By-laws of the Subsidiary Guarantor or any agreement
or other instrument known to such counsel to which the Subsidiary
Guarantor is a party or by which the Subsidiary Guarantor may be
bound.
5. There are no actions, suits or proceedings pending
or, to the knowledge of such counsel, threatened against or affecting
the Subsidiary Guarantor or any property of
EXHIBIT 4.4(b)
(to Note Purchase Agreement)
103
the Subsidiary Guarantor in any court or before any arbitrator of any kind or
before or by any Governmental Authority either (i) with respect to the
Subsidiary Guaranty to which it is a party or (ii) that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
The opinion of special counsel to each Subsidiary Guarantor shall be
limited to the laws of the jurisdiction of incorporation of such Subsidiary
Guarantor, the laws of the State of New York, the Federal laws of the United
States and the securities laws of the Purchasers' states of residence, shown in
Exhibit A, as reported in current standard compilations thereof. The opinion
of special counsel to each Subsidiary Guarantor shall cover such other matters
relating to the Subsidiary Guaranty to which it is a party as the Purchasers
may reasonably request. With respect to matters of fact on which such opinion
is based, such counsel shall be entitled to rely on appropriate certificates of
public officials and officers of the Subsidiary Guarantors and representations
of the Purchasers set forth in the Note Purchase Agreement.
E-4.4(b)-108
104
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
The closing opinion of Chapman and Cutler, special counsel to the
Purchasers, called for by Section 4.4(c) of the Note Purchase Agreement, shall
be dated the date of the Closing and addressed to the Purchasers, shall be
satisfactory in form and substance to the Purchasers and shall be to the effect
that:
1. The Company is a corporation, validly existing and in
good standing under the laws of the State of California and has the
corporate power and the corporate authority to execute and deliver the
Note Purchase Agreement and to issue the Notes.
2. The Note Purchase Agreement has been duly authorized
by all necessary corporate action on the part of the Company, has been
duly executed and delivered by the Company and constitutes the legal,
valid and binding contract of the Company enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of
such principles is considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, and the Notes being
delivered on the date hereof have been duly executed and delivered by
the Company and constitute the legal, valid and binding obligations of
the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under
the circumstances contemplated by the Note Purchase Agreement do not,
under existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
The opinion of Chapman and Cutler shall also state that the opinion of
Arter & Hadden, special counsel to the Company, and each of the opinions of
special counsel to the Subsidiary Guarantors are satisfactory in scope and form
to Chapman and Cutler and that, in their opinion, the Purchasers are justified
in relying thereon.
In rendering the opinion set forth in paragraph 1 above, Chapman and
Cutler may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Articles of Incorporation
EXHIBIT 4.4(c)
(to Note Purchase Agreement)
105
certified by, and a certificate of good standing of the Company from, the
Secretary of State of the State of California, the By-laws of the Company and
the general business corporation law of the State of California. The opinion
of Chapman and Cutler is limited to the laws of the State of New York, the
general business corporation law of the State of California and the Federal
laws of the United States.
With respect to matters of fact upon which such opinion is based,
Chapman and Cutler may rely on appropriate certificates of public officials and
officers of the Company and upon representations of the Company and the
Purchasers delivered in connection with the issuance and sale of the Notes.
E-4.4(c)-110
106
FORM OF SUBSIDIARY GUARANTY
EXHIBIT 9.6
(to Note Purchase Agreement)