Exhibit 10(v)
LINCOLN ELECTRIC HOLDINGS, INC.
THE LINCOLN ELECTRIC COMPANY
8.73% Senior Notes due November 26, 2003
Uncommitted Private Shelf Facility
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AMENDED AND RESTATED
NOTE PURCHASE AND PRIVATE SHELF AGREEMENT
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Dated as of April 30, 2002
TABLE OF CONTENTS
SECTION HEADING PAGE
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SECTION 1A. AUTHORIZATION OF RESTATED NOTES........................................................1
SECTION 1B. AUTHORIZATION OF ISSUE OF SHELF NOTES................................................2
SECTION 2A. ISSUANCE OF RESTATED NOTES...........................................................2
SECTION 2B. PURCHASE AND SALE OF SHELF NOTES.....................................................2
Section 2B(1). Facility 2
Section 2B(2). Issuance Period 3
Section 2B(3). Request for Purchase 3
Section 2B(4). Rate Quotes 3
Section 2B(5). Acceptance 3
Section 2B(6). Market Disruption 4
Section 2B(7). Facility Closings 4
Section 2B(8). Fees 5
Section 2B(8)(i). [Intentionally Omitted] 5
Section 2B(8)(ii). Issuance Fee 5
Section 2B(8)(iii). Delayed Delivery Fee 5
Section 2B(8)(iv). Cancellation Fee 6
SECTION 3. RESTATED NOTES CLOSING.................................................................6
SECTION 4. CONDITIONS TO CLOSING..................................................................6
Section 4.1. Representations and Warranties.....................................................7
Section 4.2. Performance; No Default............................................................7
Section 4.3. Compliance Certificates............................................................7
Section 4.4. Opinions of Counsel................................................................7
Section 4.5. Purchase Permitted by Applicable Law, etc..........................................7
Section 4.6. Proceedings and Documents..........................................................7
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS.........................................8
Section 5.1. Organization; Power and Authority..................................................8
Section 5.2. Authorization, etc.................................................................8
Section 5.3. Disclosure.........................................................................8
Section 5.4. Subsidiaries.......................................................................8
Section 5.5. Financial Statements...............................................................9
Section 5.6. Compliance with Laws, Other Instruments, etc......................................10
Section 5.7. Governmental Authorizations, etc..................................................10
Section 5.8. Litigation; Observance of Statutes and Orders.....................................10
Section 5.9. Taxes.............................................................................10
Section 5.10. Title to Property; Leases.........................................................11
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Section 5.11. Licenses, Permits, etc............................................................11
Section 5.12. Compliance with ERISA.............................................................11
Section 5.13. Private Offering by the Obligors..................................................12
Section 5.14. Use of Proceeds; Margin Regulations...............................................12
Section 5.15. Existing Indebtedness.............................................................12
Section 5.16. Foreign Assets Control Regulations, etc...........................................13
Section 5.17. Status under Certain Statutes.....................................................13
Section 5.18. Hostile Tender Offers.............................................................13
SECTION 6. REPRESENTATIONS OF THE PURCHASER......................................................13
Section 6.1. Purchase for Investment...........................................................13
Section 6.2. Source of Funds...................................................................13
SECTION 7. INFORMATION AS TO OBLIGORS............................................................15
Section 7.1. Financial and Business Information................................................15
Section 7.2. Officer's Certificate.............................................................18
Section 7.3. Inspection........................................................................18
SECTION 8. PREPAYMENT OF THE NOTES...............................................................19
Section 8.1. Required Prepayments..............................................................19
Section 8.2. Optional Prepayments with Make-Whole Amount.......................................19
Section 8.3. Prepayment of Notes upon Change of Control........................................19
Section 8.4. Allocation of Partial Prepayments.................................................21
Section 8.5. Maturity; Surrender, etc..........................................................21
Section 8.6. Purchase of Notes.................................................................21
Section 8.7. Make-Whole Amount.................................................................21
SECTION 9. AFFIRMATIVE COVENANTS.................................................................23
Section 9.1. Compliance with Law...............................................................23
Section 9.2. Insurance.........................................................................23
Section 9.3. Maintenance of Properties.........................................................23
Section 9.4. Payment of Taxes..................................................................23
Section 9.5. Corporate Existence, etc..........................................................24
Section 9.6. Notes to Rank Pari Passu..........................................................24
Section 9.7. Ownership of the Company..........................................................24
Section 9.8. Changes in Status of Subsidiaries.................................................24
SECTION 10. NEGATIVE COVENANTS....................................................................25
Section 10.1. Transactions with Affiliates......................................................25
Section 10.2. Fixed Charges Coverage Ratio......................................................25
Section 10.3. Leverage Ratio; Minimum Shareholders' Equity......................................25
Section 10.4. Priority Debt.....................................................................25
Section 10.5. Investments.......................................................................25
Section 10.6. Mergers, Consolidations and Sales of Assets.......................................27
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Section 10.7. Limitation on Liens...............................................................30
Section 10.8. Sale-and-Leaseback Transactions...................................................33
SECTION 11. EVENTS OF DEFAULT.....................................................................33
SECTION 12. REMEDIES ON DEFAULT, ETC..............................................................35
Section 12.1. Acceleration......................................................................35
Section 12.2. Other Remedies....................................................................36
Section 12.3. Rescission........................................................................36
Section 12.4. No Waivers or Election of Remedies, Expenses, etc.................................36
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.........................................36
Section 13.1. Registration of Notes.............................................................36
Section 13.2. No Transfers of Notes to Competitors; Transfer and Exchange of Notes..............37
Section 13.3. Replacement of Notes..............................................................37
SECTION 14. PAYMENTS ON NOTES.....................................................................38
Section 14.1. Place of Payment..................................................................38
Section 14.2. Home Office Payment...............................................................38
SECTION 15. EXPENSES, ETC.........................................................................38
Section 15.1. Transaction Expenses..............................................................38
Section 15.2. Survival..........................................................................39
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..........................39
SECTION 17. AMENDMENT AND WAIVER..................................................................39
Section 17.1. Requirements......................................................................39
Section 17.2. Binding Effect, etc...............................................................40
Section 17.3. Notes Held by the Obligors, etc...................................................40
SECTION 18. NOTICES...............................................................................40
SECTION 19. REPRODUCTION OF DOCUMENTS.............................................................41
SECTION 20. CONFIDENTIAL INFORMATION..............................................................41
SECTION 21. [INTENTIONALLY OMITTED]...............................................................42
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SECTION 22. MISCELLANEOUS.........................................................................42
Section 22.1. Successors and Assigns............................................................42
Section 22.2. Payments Due on Non-Business Days.................................................42
Section 22.3. Severability......................................................................42
Section 22.4. Construction......................................................................43
Section 22.5. Counterparts......................................................................43
Section 22.6. Governing Law.....................................................................43
Section 22.7. Consent to Jurisdiction and Service of Process....................................43
SCHEDULES AND EXHIBITS
SCHEDULE A -- Information Relating to Restated Note Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 5.4 -- Subsidiaries of the Obligors and Ownership of Subsidiary Stock
SCHEDULE 5.18 -- Existing Investments
EXHIBIT A-1 -- Form of Restated Note
EXHIBIT A-2 -- Form of Shelf Note
EXHIBIT B -- Form of Request for Purchase
EXHIBIT C -- Form of Confirmation of Acceptance
EXHIBIT D-1 -- Form of Opinion of Counsel to Obligors for Restated Note Closing
EXHIBIT D-2 -- Form of Opinion of Counsel to Obligors for Shelf Note Closing
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LINCOLN ELECTRIC HOLDINGS, INC.
THE LINCOLN ELECTRIC COMPANY
22801 SAINT CLAIR AVENUE
CLEVELAND, OH 44117-1199
As of April 30, 2002
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA (" PRUDENTIAL")
Each Prudential Affiliate which becomes
bound by certain provisions of this Agreement
as hereinafter provided
c/o PRUDENTIAL CAPITAL GROUP
180 North Stetson Street
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601
Ladies and Gentlemen:
LINCOLN ELECTRIC HOLDINGS, INC., an Ohio corporation ("Holdings") and
THE LINCOLN ELECTRIC COMPANY, an Ohio corporation (the "Company", and together
with Holdings hereinafter referred to individually as an "Obligor" and
collectively as the "Obligors"), jointly and severally agree with you that the
Note Agreement (the "Existing Agreement") dated as of November 20, 1991, between
the Company and Prudential is hereby amended and restated in its entirety as set
forth herein. 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 1A. AUTHORIZATION OF RESTATED NOTES.
The Company has authorized the amendment and restatement of, and
Holdings has authorized the assumption of, the Company's 8.73% senior promissory
notes due November 26, 2003, in the aggregate outstanding principal amount of
$18,750,000 (the "Existing Notes"), which Existing Notes were issued pursuant to
the Existing Agreement. The Existing Notes, as so amended, restated and assumed,
are referred to herein as the "Restated Notes". The Restated Notes shall be in
the aggregate principal amount of $18,750,000, shall mature November 26, 2003,
shall bear interest at the rate of 8.73% per annum (or, in the event of a
payment default, at the Default Rate) and shall be substantially in the form of
Exhibit A-1 hereto. The terms "Restated Note" and "Restated Notes" as used
herein shall include each Restated Note delivered pursuant to any provision of
this Agreement and each Restated Note delivered in substitution or exchange
therefor pursuant to any such provision.
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SECTION 1B. AUTHORIZATION OF ISSUE OF SHELF NOTES.
The Obligors will jointly and severally authorize the issue and sale of
their additional senior notes (the "Shelf Notes") in the aggregate principal
amount of $100,000,000, to be dated the date of issue thereof, to mature, in the
case of each Shelf Note so issued, no more than fifteen years after the date of
original issuance thereof, to have an average life, in the case of each Shelf
Note so issued, of no more than twelve years after the date of original issuance
thereof, to bear interest on the unpaid balance thereof from the date thereof at
the rate per annum, and to have such other particular terms, as shall be set
forth, in the case of each Shelf Note so issued, in the Confirmation of
Acceptance with respect to such Shelf Note delivered pursuant to Section 2B(5),
and to be substantially in the form of Exhibit A-2. The terms "Shelf Note" and
"Shelf Notes" as used herein shall include each Shelf Note delivered pursuant to
any provision of this Agreement and each Shelf Note delivered in substitution or
exchange for any such Shelf Note pursuant to any such provision. The terms
"Note" and "Notes" as used herein shall include each Restated Note and each
Shelf Note delivered pursuant to any provision of this Agreement and each Note
delivered in substitution or exchange for any such Note pursuant to any such
provision. Notes that have (i) the same final maturity, (ii) the same principal
prepayment dates, (iii) the same principal prepayment amounts (as a percentage
of the original principal amount of each Note), (iv) the same interest rate, (v)
the same interest payment periods and (vi) the same date of issuance (which, in
the case of a Note issued in exchange for another Note, shall be deemed for
these purposes the date on which such Note's ultimate predecessor Note was
issued), are herein called a "Series" of Notes.
SECTION 2A. ISSUANCE OF RESTATED NOTES.
The Obligors hereby agree to issue to Prudential and, subject to the
terms and conditions herein set forth, Prudential hereby agrees to acquire from
the Obligors, the aggregate principal amount of Restated Notes set forth
opposite its name on Schedule A hereto, in exchange for Existing Notes in
identical outstanding principal amounts.
SECTION 2B. PURCHASE AND SALE OF SHELF NOTES.
Section 2B(1). Facility. Prudential is willing to consider, in its sole
discretion and within limits that may be authorized for purchase by Prudential
and Prudential Affiliates from time to time, the purchase of Shelf Notes
pursuant to this Agreement. The willingness of Prudential to consider such
purchase of Shelf Notes is herein called the "Facility." At any time, the
aggregate principal amount of shelf Notes stated in Section 1B, minus the
aggregate principal amount of Shelf Notes purchased and sold pursuant to this
Agreement prior to such time, minus the aggregate principal amount of Accepted
Notes (as hereinafter defined) which have not yet been purchased and sold
hereunder prior to such time, is herein called the "Available Facility Amount"
at such time. NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER
PURCHASES OF SHELF NOTES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS
UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL BE
OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES,
SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OR SHELF NOTES,
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AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR
ANY PRUDENTIAL AFFILIATE.
Section 2B(2). Issuance Period. Shelf Notes may be issued and sold
pursuant to this Agreement until the earlier of (i) the third anniversary of the
date of this Agreement (or if such anniversary is not a Business Day, the
Business Day next preceding such anniversary) and (ii) the thirtieth day after
Prudential shall have given to the Company, or the Company shall have given to
Prudential, written notice stating that it elects to terminate the issuance and
sale of Shelf Notes pursuant to this Agreement (or if such thirtieth day is not
a Business Day, the Business Day next preceding such thirtieth day). The period
during which Shelf Notes may be issued and sold pursuant to this Agreement is
herein called the "Issuance Period."
Section 2B(3). Request for Purchase. The Obligors may from time to time
during the Issuance Period make requests for purchases of Shelf Notes (each such
request being herein called a "Request for Purchase"). Each Request for Purchase
shall be made to Prudential by telecopier or overnight delivery service to the
applicable address set forth in the Information Schedule, and shall (i) specify
the aggregate principal amount of Shelf Notes covered thereby, which shall not
be less than $10,000,000 and not be greater than the Available Facility Amount
at the time such Request for Purchase is made, (ii) specify the principal
amounts, final maturities, principal prepayment dates and amounts and interest
payment periods (quarterly or semi-annual in arrears) of the Shelf Notes covered
thereby, (iii) specify the use of proceeds of such Shelf Notes, (iv) specify the
proposed day for the closing of the purchase and sale of such Shelf Notes, which
shall be a Business Day during the Issuance Period not less than ten Business
Days and not more than 25 days after the making of such Request for Purchase,
(v) specify the number of the account and the name and address of the depository
institution to which the purchase prices of such Shelf Notes are to be
transferred on the Closing Day for such purchase and sale, (vi) certify that the
representations and warranties contained in Section 5 are true on and as of the
date of such Request for Purchase and that there exists on the date of such
Request for Purchase no Event of Default or Default and (vii) be substantially
in the form of Exhibit C attached hereto. Each Request for Purchase shall be in
writing and shall be deemed made when received by Prudential.
Section 2B(4). Rate Quotes. Not later than five Business Days after the
Obligors shall have given Prudential a Request for Purchase pursuant to Section
2B(3), Prudential may, but shall be under no obligation to, provide to the
Obligors by telephone or telecopier, in each case between 9:30 a.m. and 1:30
p.m. New York City local time (or such later time as Prudential may elect)
interest rate quotes for the several principal amounts, maturities, principal
prepayment schedules, and interest payment periods of Shelf Notes specified in
such Request for Purchase. Each quote shall represent the interest rate per
annum payable on the outstanding principal balance of such Shelf Notes at which
Prudential or a Prudential Affiliate would be willing to purchase such Shelf
Notes at 100% of the principal amount thereof.
Section 2B(5). Acceptance. Within five minutes after Prudential shall
have provided any interest rate quotes pursuant to Section 2B(4) or such shorter
period as Prudential may specify to the Obligors (such period herein called the
"Acceptance Window"), the Obligors may, subject to Section 2B(6), elect to
accept such interest rate quotes as to not less than $10,000,000 aggregate
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principal amount of the Shelf Notes specified in the related Request for
Purchase. Such election shall be made by an Authorized Officer of an Obligor
notifying Prudential by telephone or in person within the Acceptance Window that
the Obligors elect to accept such interest rate quotes, specifying the Shelf
Notes (each such Shelf Note being herein called an "Accepted Note") as to which
such acceptance (herein called an "Acceptance") relates. The day the Obligors
notify Prudential of an Acceptance with respect to any Accepted Notes is herein
called the "Acceptance Day" for such Accepted Notes. Any interest rate quotes as
to which Prudential does not receive an Acceptance within the Acceptance Window
shall expire, and no purchase or sale of Shelf Notes hereunder shall be made
based on such expired interest rate quotes. Subject to Section 2B(6) and the
other terms and conditions hereof, the Obligors agree to sell to Prudential or a
Prudential Affiliate, and Prudential agrees to purchase, or to cause the
purchase by a Prudential Affiliate of, the Accepted Notes at 100% of the
principal amount of such Accepted Notes. As soon as practicable following the
Acceptance Day, the Obligors, Prudential and each Prudential Affiliate which is
to purchase any such Accepted Notes will execute a confirmation of such
Acceptance substantially in the form of Exhibit D attached hereto (herein called
a "Confirmation of Acceptance"). If the Obligors should fail to execute and
return to Prudential within three Business Days following receipt thereof a
Confirmation of Acceptance with respect to any Accepted Notes, Prudential may at
its election at any time prior to its receipt thereof cancel the closing with
respect to such Accepted Notes by so notifying the Company in writing.
Section 2B(6). Market Disruption. Notwithstanding the provisions of
Section 2B(5), if Prudential shall have provided interest rate quotes pursuant
to Section 2B(4) and thereafter prior to the time an Acceptance with respect to
such quotes shall have been notified to Prudential in accordance with Section
2B(5) the domestic market for U.S. Treasury securities or derivatives shall have
closed or there shall have occurred a general suspension, material limitation,
or significant disruption of trading in securities generally on the New York
Stock Exchange or in the domestic market for U.S. Treasury securities or
derivatives, then such interest rate quotes shall expire, and no purchase or
sale of Shelf Notes hereunder shall be made based on such expired interest rate
quotes. If the Obligors thereafter notify Prudential of the Acceptance of any
such interest rate quotes, such Acceptance shall be ineffective for all purposes
of this Agreement, and Prudential shall promptly notify the Obligors that the
provisions of this Section 2B(6) are applicable with respect to such Acceptance.
Section 2B(7). Facility Closings. Not later than 1:00 p.m. (New York
City local time) on the Closing Day for any Accepted Notes, the Obligors will
deliver to each Purchaser listed in the Confirmation of Acceptance relating
thereto at the offices of the Prudential Capital Group, 180 North Stetson
Street, Two Prudential Plaza, Suite 5600, Chicago, IL 60601, the Accepted Notes
to be purchased by such Purchaser in the form of one or more Notes in authorized
denominations as such Purchaser may request for each Series of Accepted Notes to
be purchased on the Closing Day, dated the Closing Day and registered in such
Purchaser's name, against payment of the purchase price thereof by transfer of
immediately available funds for credit to the account of an Obligor specified in
the Request for Purchase of such Notes. If the Obligors fail to tender to any
Purchaser the Accepted Notes to be purchased by such Purchaser on the scheduled
Closing Day for such Accepted Notes as provided above in this Section 2B(7), or
any of the conditions specified in Section 3 shall not have been fulfilled by
the time required on such scheduled Closing Day, the Obligors shall, prior to
1:30 p.m., New York City local time, on such scheduled
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Closing Day notify Prudential (which notification shall be deemed received by
each Purchaser) in writing whether (i) such closing is to be rescheduled (such
rescheduled date to be a Business Day during the Issuance Period not less than
one Business Day and no more than 10 Business Days after such scheduled Closing
Day (the "Rescheduled Closing Day")) and certify to Prudential (which
certification shall be for the benefit of each Purchaser) that the Obligors
reasonably believe that they will be able to comply with the conditions set
forth in Section 3 on such Rescheduled Closing Day and that the Obligors will
pay the Delayed Delivery Fee in accordance with Section 2B(8)(iii) or (ii) such
closing is to be canceled. In the event that the Obligors shall fail to give
such notice referred to in the preceding sentence, Prudential (on behalf of each
Purchaser) may at its election, at any time after 1:30 p.m., New York City local
time, on such scheduled Closing Day, notify the Obligors in writing that such
closing is to be canceled. Notwithstanding anything to the contrary appearing in
this Agreement, the Obligors may not elect to reschedule a closing with respect
to any given Accepted Notes on more than one occasion, unless Prudential shall
have otherwise consented in writing.
Section 2B(8). Fees.
Section 2B(8)(i). [INTENTIONALLY OMITTED].
Section 2B(8)(ii). Issuance Fee. The Company will pay to Prudential in
immediately available funds a fee (herein called the "Issuance Fee") on each
Closing Day (other than the Restated Notes Closing Day) in an amount equal to
0.10% of the aggregate principal amount of Accepted Notes sold on such Closing
Day.
Section 2B(8)(iii). Delayed Delivery Fee. If the closing of the
purchase and sale of any Accepted Note is delayed for any reason beyond the
original Closing Day for such Accepted Note, the Obligors will pay to Prudential
(a) on the Cancellation Date or actual closing date of such purchase and sale
and (b) if earlier, the next Business Day following 90 days after the Acceptance
Day for such Accepted Note and on each Business Day following 90 days after the
prior payment hereunder, a fee (herein called the "Delayed Delivery Fee")
calculated as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note, "MMY" means Money Market Yield, i.e., the yield per
annum on commercial paper investments of the highest quality on the date
Prudential receives notice of the delay in the closing for such Accepted Note
and having a maturity date or dates the same as, or closest to, the Rescheduled
Closing Day or Rescheduled Closing Days, determined by interpolation, if
necessary (a new alternative investment being selected by Prudential each time
such closing is delayed); "DTS" means Days to Settlement, i.e., the number of
actual days elapsed from and including the original Closing Day with respect to
such Accepted Note (in the case of the first such payment with respect to such
Accepted Note) or from and including the date of the next preceding payment (in
the case of any subsequent delayed delivery fee payment with respect to such
Accepted Note) to but excluding the date of such payment; and "PA" means
Principal Amount, i.e., the principal amount of the Accepted Note for which such
calculation is being made. In no case shall the Delayed Delivery Fee be less
than zero. Nothing contained herein
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shall obligate any Purchaser to purchase any Accepted Note on any day other than
the Closing Day for such Accepted Note, as the same may be rescheduled from time
to time in compliance with Section 2B(7).
Section 2B(8)(iv). Cancellation Fee. If (a) the Obligors at any time
notify Prudential in writing that the Obligors are canceling the closing of the
purchase and sale of any Accepted Note, or (b) Prudential notifies the Obligors
in writing under the circumstances set forth in the last sentence of Section
2B(5) or the penultimate sentence of Section 2B(7) that the closing of the
purchase and sale of such Accepted Note is to be canceled, or (c) the closing of
the purchase and sale of such Accepted Note is not consummated on or prior to
the last day of the Issuance Period (the date of any such notification, or the
last day of the Issuance Period, as the case may be, being herein called the
"Cancellation Date"), the Obligors will pay the Purchasers in immediately
available funds an amount (the "Cancellation Fee") calculated as follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and "PA" has the
meaning ascribed to it in Section 2B(8)(iii). The foregoing bid and ask prices
shall be as reported on the Treasury Yield Monitor page of Standard & Poor's MMS
- - Treasury Market Insight (or, if such data for any reason ceases to be so
reported or such source ceases to be Prudential Capital Group's customary source
of such information, such publicly available source of similar market data as is
then Prudential Capital Group's customary source of such information). Each
price shall be based on a U.S. Treasury security having a par value of $100.00
and shall be rounded to the second decimal place. In no case shall the
Cancellation Fee be less than zero.
SECTION 3. RESTATED NOTES CLOSING.
The exchange of the Restated Notes for the Existing Notes shall occur
at the offices of Prudential Capital Group, Suite 2700, Four Embarcadero Center,
San Francisco, California 94111 on April 30, 2002 (the "Restated Notes Closing
Day"). On the Restated Notes Closing Day the Obligors will deliver to Prudential
one or more Restated Notes registered in Prudential's name, evidencing the
aggregate principal amount of Restated Notes to be acquired by it and in the
denomination or denominations specified in Schedule A against delivery by
Prudential of Existing Notes aggregating in principal amount such aggregate
principal amount of Restated Notes.
SECTION 4. CONDITIONS TO CLOSING.
The obligation of Prudential to exchange Existing Notes for Restated
Notes, and of any Purchaser to purchase and pay for any Shelf Notes, in each
case is subject to the fulfillment to its satisfaction, prior to or at the
applicable Closing Day, of the following conditions:
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Section 4.1. Representations and Warranties. The representations and
warranties of the Obligors in this Agreement shall be correct when made and as
of the applicable Closing Day (or if such representation or warranty is
expressly stated to have been made as of a specific date, at such specific
date).
Section 4.2. Performance; No Default. Each of the Obligors 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 as of the
applicable Closing Day, and after giving effect to the issue and sale of the
Notes (and the application of the proceeds thereof), no Default or Event of
Default shall have occurred and be continuing.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. Each of the Obligors shall have
delivered to such Purchaser an Officer's Certificate, dated the
applicable Closing Day, certifying that the conditions specified in
Sections 4.1 and 4.2 have been fulfilled.
(b) Secretary's Certificate. Each of the Obligors shall have
delivered to such Purchaser a certificate dated the applicable Closing
Day certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution,
delivery and (if applicable) assumption of the Notes and this
Agreement.
Section 4.4. Opinions of Counsel. Such Purchaser shall have received an
opinion in form and substance reasonably satisfactory to such Purchaser, dated
the applicable Closing Day, from Frederick G. Stueber, Esq., Senior Vice
President, General Counsel and Secretary of each of the Obligors, substantially
in the form of Exhibit D-1 (in the case of the Restated Notes) or Exhibit D-2
(in the case of any Shelf Notes) (and the Obligors hereby instruct their counsel
to deliver such opinions to such Purchaser) and covering such other matters
incident to such transactions as such Purchaser may reasonably request.
Section 4.5. Purchase Permitted by Applicable Law, etc. On the
applicable Closing Day such Purchaser's purchase of Notes shall (i) be permitted
by the laws and regulations of each jurisdiction to which such Purchaser is
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii) not
violate any applicable law or regulation (including, without limitation,
Regulation T, U or X of the Board of Governors of the Federal Reserve System)
and (iii) not subject such Purchaser to any tax, penalty or liability under or
pursuant to any applicable law or regulation, which law or regulation was not in
effect on the date hereof.
Section 4.6. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to such Purchaser and Purchasers' special counsel, and such
Purchaser and Purchasers' special counsel shall have received all such
counterpart originals or certified or other copies of such documents as such
Purchaser or such Purchaser's special counsel may reasonably request.
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SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS.
Each Obligor, jointly and severally, represents and warrants to each of
the Purchasers that:
Section 5.1. Organization; Power and Authority. Each Obligor 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 would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each
Obligor 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 Notes and to perform the provisions hereof and thereof.
Section 5.2. Authorization, etc. This Agreement and the Notes have been
duly authorized by all necessary corporate action on the part of each Obligor,
and this Agreement constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of each Obligor
enforceable against such Obligor in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3. Disclosure. This Agreement and other documents,
certificates and statements furnished to the Purchasers by or on behalf of the
Obligors in connection herewith, taken as a whole, do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained herein and therein not misleading in light of
the circumstances under which they were made. Since the last day of the most
recent Fiscal Year for which annual financial statements of Holdings and the
Company have been delivered pursuant to Section 7.1(b) (or, if no such financial
statements have been delivered, the last day of the most recent Fiscal Year for
which financial statements of Holdings and the Company were furnished pursuant
to Section 5.5), there has been no change in the financial condition,
operations, business or properties of Holdings or any of its Restricted
Subsidiaries except changes that individually or in aggregate would not
reasonably be expected to have a Material Adverse Effect.
Section 5.4. Subsidiaries.
(a) As of the date of this Agreement, all Subsidiaries of the Obligors
are set forth on Schedule 5.4 and all such Subsidiaries are Restricted
Subsidiaries.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary have been validly issued, are fully paid and
nonassessable and are owned by the Obligors or another Subsidiary free and clear
of any Lien (except for any Lien permitted by Section 10.7).
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(c) Each Subsidiary 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 would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each such
Subsidiary has the corporate or other power and authority to own or hold under
lease the properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact.
Section 5.5. Financial Statements. The Obligors have furnished each
Purchaser of the Restated Notes or any Accepted Notes (as applicable) with the
following financial statements: (i) the financial statements of Holdings
appearing in its two most recently filed (as of the date as of which this
representation is made or repeated) Annual Reports on Form 10-K, prepared in
accordance with the requirements therefor and filed with the SEC, (ii) a
consolidated balance sheet of Holdings and its Restricted Subsidiaries as of the
last day in each of the three Fiscal Years most recently completed prior to the
date as of which this representation is made or repeated to such Purchaser
(other than Fiscal Years completed within 120 days prior to such date for which
annual financial statements have not been released) and consolidated statements
of income, cash flows and shareholders' equity of Holdings and its Restricted
Subsidiaries for each such Fiscal Year, (iii) the financial statements of
Holdings appearing in its Quarterly Report on Form 10-Q as at the end of the
Fiscal Quarter (if any) most recently completed prior to such date and after the
end of the most recent Fiscal Year (other than Fiscal Quarters completed within
60 days prior to date for which such Quarterly Report has not been filed), (iv)
consolidated balance sheets of Holdings and its Restricted Subsidiaries as at
the end of the Fiscal Quarter (if any) most recently completed prior to such
date and after the end of the most recent Fiscal Year (other than Fiscal
Quarters completed within 60 days prior to such date for which financial
statements have not been released) and the comparable Fiscal Quarter in the
preceding Fiscal Year, and consolidated statements of income and cash flows of
Holdings and its Restricted Subsidiaries for the periods from the beginning of
the Fiscal Years in which such Fiscal Quarters are included to the end of such
Fiscal Quarters, (v) a consolidated balance sheet of the Company and its
Restricted Subsidiaries as of the last day in each of the three Fiscal Years
most recently completed prior to the date as of which this representation is
made or repeated to such Purchaser (other than Fiscal Years completed within 120
days prior to such date for which annual financial statements have not been
released) and consolidated statements of income, cash flows and shareholders'
equity of the Company and its Restricted Subsidiaries for each such Fiscal Year,
and (vi) consolidated balance sheets of the Company and its Restricted
Subsidiaries as at the end of the Fiscal Quarter (if any) most recently
completed prior to such date and after the end of the most recent Fiscal Year
(other than Fiscal Quarters completed within 60 days prior to such date for
which financial statements have not been released) and the comparable Fiscal
Quarter in the preceding fiscal year and consolidated statements of income and
cash flows of the Company and its Restricted Subsidiaries for the periods from
the beginning of the Fiscal Years in which such Fiscal Quarters are included to
the end of such Fiscal Quarters. Such financial statements (including in each
case any related schedules and notes) fairly present in all material respects
the consolidated financial position of the companies described therein as of the
respective dates thereof 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
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the periods involved except as may be set forth in any notes thereto (subject,
in the case of interim statements, to normal year-end adjustments).
Section 5.6. Compliance with Laws, Other Instruments, etc. The
execution, delivery and performance by the Obligors 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
either Obligor 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 Material agreement or instrument to which either Obligor
or any Restricted Subsidiary is bound or by which either Obligor or any
Restricted Subsidiary or any of their respective properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to either Obligor or any
Restricted Subsidiary or (iii) violate any provision of any statute or other
rule or regulation of any Governmental Authority applicable to either Obligor or
any Restricted Subsidiary which violation or violations under this clause (iii),
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
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 either Obligor of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Statutes and Orders. (a) There
are no actions, suits or proceedings pending or, to the knowledge of either
Obligor, threatened against or affecting either Obligor or any Restricted
Subsidiary or any property of either Obligor 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, would reasonably be expected
to have a Material Adverse Effect.
(b) Neither Obligor nor any Restricted Subsidiary is in default under
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, would
reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Obligors and all Restricted Subsidiaries have
filed all income tax returns that are required to have been filed in any
jurisdiction, and have paid all taxes shown to be due and payable on such
returns and all other taxes and assessments payable by them, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (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 an Obligor or a Restricted Subsidiary, as
the case may be, has established adequate reserves in accordance with GAAP.
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Section 5.10. Title to Property; Leases. The Obligors and the
Restricted Subsidiaries have good and sufficient title to their respective
Material properties, including all such properties reflected in the most recent
audited balance sheet referred to in Section 5.5 or purported to have been
acquired by an Obligor 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, except for those defects
in title and Liens that, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect. All Material leases are valid and
subsisting and are in full force and effect in all material respects.
Section 5.11. Licenses, Permits, etc. The Obligors and the Restricted
Subsidiaries own or possess all licenses, permits, franchises, authorizations,
patents, copyrights, service marks, trademarks and trade names, or rights
thereto, that are Material, without known conflict with the rights of others,
except for those conflicts that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
Section 5.12. Compliance with ERISA. (a) Holdings 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 Holdings 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 would reasonably be
expected to result in the incurrence of any such liability by Holdings or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of Holdings or any ERISA Affiliate, in either case pursuant
to Title I or IV of ERISA or to such penalty or excise tax provisions or to
Section 401(a)(29) or 412 of the Code, other than such liabilities or Liens as
would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report (which in the case of the Restated Notes Closing Day is dated January 1,
2001), did not exceed (i) on the Restated Notes Closing Day the aggregate
current value of the assets of such Plan allocable to such benefit liabilities
by more than $60,000 in the case of any single Plan and by more than $500,000 in
the aggregate for all Plans, provided that Holdings' Annual Report on Form 10-K
for the Fiscal Year ended December 31, 2001 indicated that, as of December 31,
2001, the projected benefit obligation under all such Plans exceeds the plan
assets of such Plan by not more than $47,000,000 and (ii) on any other Closing
Day, (a) in the case of any single Plan, an amount which, if said Plan were
terminated, would have a Material Adverse Effect and (b) in the case of all said
Plans, an amount which, if all said Plans were terminated, would have a Material
Adverse Effect. The term "benefit liabilities" has the meaning specified in
Section 4001 of ERISA and the terms "current value" and "present value" have the
meanings specified in Section 3 of ERISA.
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(c) Holdings 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 Holdings' 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 Holdings 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 each Obligor in the first sentence of this Section 5.12(e) is made in
reliance upon and subject to the accuracy of each Purchaser's representation in
Section 6.2 as to the sources of the funds to be used to pay the purchase price
of the Notes to be purchased by such Purchaser.
Section 5.13. Private Offering by the Obligors. Neither Obligor 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 the
Purchasers and not more than 35 other Institutional Investors, each of which has
been offered the Notes at a private sale for investment. Neither Obligor 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. No part of the
proceeds from the sale of the Notes hereunder will be used (or, in the case of
the Existing Notes was used), directly or indirectly, for the purpose of buying
or carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve either Obligor in a violation of Regulation X of said Board (12 CFR 224)
or to involve any broker or dealer in a violation of Regulation T of said Board
(12 CFR 220). Margin stock does not constitute more than 5% of the value of the
consolidated assets of Holdings and its Restricted Subsidiaries and the Obligors
do not have any present intention that margin stock will constitute more than 5%
of the value of such assets. As used in this Section, the terms "margin stock"
and "purpose of buying or carrying" shall have the meanings assigned to them in
said Regulation U.
Section 5.15. Existing Indebtedness. Neither Obligor nor any Restricted
Subsidiary has outstanding any Debt except as permitted by Sections 10.3 and
10.4. Neither Obligor 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 Indebtedness of such Obligor or such Restricted Subsidiary and no event
or condition exists with respect to any Indebtedness of either Obligor 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 Indebtedness to
become due and payable before its stated maturity or before its regularly
scheduled dates of payment.
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Section 5.16. Foreign Assets Control Regulations, etc. Neither the sale
of the Notes by the Obligors hereunder nor their 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. Without limiting the foregoing, neither the Obligors nor
any Subsidiary (i) is or will become a person whose property or interests in
property are blocked pursuant to Section 1 of Executive Order 13224 of September
23, 2001, Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) or
(ii) to its knowledge, after reasonable inquiry, engages or will engage in any
dealings or transactions, or be otherwise associated, with any such person.
Section 5.17. Status under Certain Statutes. Neither Obligor nor any of
their Subsidiaries is subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as amended,
the ICC Termination Act of 1995, as amended, or the Federal Power Act, as
amended.
Section 5.18. Hostile Tender Offers. None of the proceeds of the sale
of any Shelf Notes will be used to finance a Hostile Tender Offer.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase for Investment. Each Purchaser represents that it
is a Person duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization. Such Purchaser is purchasing the Notes
for its own account or for one or more separate accounts maintained by it or for
the account of one or more pension or trust funds and not with a view to the
distribution or sale thereof, provided that (i) the disposition and sale of such
Purchaser's or their property shall at all times be within its or their control
and (ii) such Purchaser and each such pension trust fund is an "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act. Each Purchaser understands that the Notes have not been, and
will not be, registered under the Securities Act and may be resold only 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
Obligors are not required to register the Notes.
Section 6.2. Source of Funds. Each Purchaser represents that at least
one of the following statements is an accurate representation as to each source
of funds (a "Source") to be used by such Purchaser to pay the purchase price of
the Notes to be purchased by it hereunder:
(a) the Source is an "insurance company general account"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no employee
benefit plan, treating as a single plan, all plans maintained by the
same employer or employee organization, with respect to which the
amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceeds ten percent (10%)
of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth
in the NAIC Annual Statement filed with such Purchaser's state of
domicile; or
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(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as such Purchaser has
disclosed to the Obligors in writing pursuant to this paragraph (b), no
employee benefit plan or group of plans maintained by the same employer
or employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in
either Obligor 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 Obligors 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 Obligors in
writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
If any Purchaser or any subsequent transferee of the Notes indicates
that such Purchaser or such transferee are relying on any representation
contained in paragraph (b), (c) or (e) above, the Obligors shall deliver a
certificate on the applicable Closing Day, with respect to such Purchaser and,
on or prior to the date of any transfer of the Notes, with respect to any such
transferee of the Notes, which certificate shall either state that (i) each
Obligor is neither a "party in interest" (as defined in Title I, Section 3(14)
of ERISA) nor a "disqualified person" (as defined in Section 4975(e)(2) of the
Internal Revenue Code of 1986, as amended), with respect to any plan identified
pursuant to paragraph (b) or (e) above, or (ii) with respect to any plan
identified pursuant to paragraph (c) above, neither Obligor nor any "affiliate"
(as defined in Section V(c) of the QPAM Exemption) has at such time, and during
the immediately preceding one year, exercised the authority to appoint or
terminate said QPAM as manager of the assets of any plan identified in writing
pursuant to paragraph (c) above or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plans.
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As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO OBLIGORS.
Section 7.1. Financial and Business Information. The Obligors shall
deliver to Prudential and each holder of Notes that is an Institutional
Investor:
(a) Quarterly Statements -- promptly, and in any event within
60 days after the end of each Fiscal Quarter in each Fiscal Year (other
than the last Fiscal Quarter of each such Fiscal Year),
(i) duplicate copies of Holdings' Quarterly Report on
Form 10-Q prepared in compliance with the requirements
therefor and filed with the SEC, together with:
(1) a consolidated balance sheet of Holdings
and its Restricted Subsidiaries as at the end of such
Fiscal Quarter; and
(2) consolidated statements of income and
cash flows of Holdings and its Restricted
Subsidiaries for such Fiscal Quarter and (in the case
of the second and third quarters) for the portion of
the Fiscal Year ending with such Fiscal Quarter, and
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, but excluding
footnotes, and certified by a Senior Financial Officer of
Holdings 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;
(ii) duplicate copies of:
(1) a consolidated balance sheet of the
Company and its Restricted Subsidiaries as at the end
of such Fiscal Quarter, and
(2) consolidated statements of income and
cash flows of the Company and its Restricted
Subsidiaries for such Fiscal Quarter and (in the case
of the second and third quarters) for the portion of
the Fiscal Year ending with such Fiscal 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, but
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excluding footnotes, and certified by a Senior Financial
Officer of the Company 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;
(b) Annual Statements -- promptly, and in any event within 120
days after the end of each Fiscal Year,
(i) duplicate copies of Holdings' Annual Report on
Form 10-K for such Fiscal Year (together with Holdings' annual
report to shareholders, if any, prepared pursuant to Rule
14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the SEC, together with:
(1) a consolidated balance sheet of Holdings
and its Restricted Subsidiaries, as at the end of
such Fiscal Year, and
(2) consolidated statements of income,
changes in shareholders' equity and cash flows of
Holdings and its Restricted Subsidiaries, for such
Fiscal Year,
setting forth in each case in comparative form the figures for
the previous Fiscal Year, all in reasonable detail, prepared
in accordance with GAAP applicable to year-end financial
statements generally, but excluding footnotes, and certified
by a Senior Financial Officer of Holdings as fairly
presenting, in all material respects, the financial position
of the companies being reported upon and their results of
operations and cash flows; and
(ii) duplicate copies of:
(1) a consolidated balance sheet of the
Company and its Restricted Subsidiaries as at the end
of such Fiscal Year; and
(2) consolidated statements of income,
changes in shareholders' equity and cash flows of the
Company and its Restricted Subsidiaries, for such
Fiscal Year,
setting forth in each case in comparative form the figures for
the previous Fiscal Year, all in reasonable detail, prepared
in accordance with GAAP applicable to year-end financial
statements generally, but excluding footnotes, and certified
by a Senior Financial Officer of the Company as fairly
presenting, in all material respects, the financial position
of the companies being reported on and their results of
operations and cash flows.
(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
information statement sent by either Obligor or any Restricted
Subsidiary to public securities holders generally (including,
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without limitation, proxy materials), and (ii) each regular or periodic
report (including, without limitation, any report of any Obligor on
Form 8-K), each registration statement that shall have become effective
and each final prospectus and all amendments thereto filed by either
Obligor or any Restricted Subsidiary with the SEC;
(d) Notice of Default or Event of Default -- promptly, and in
any event within five Business Days after a Responsible Officer of
either Obligor becoming aware of the existence of any Default or Event
of Default, a written notice specifying the nature and period of
existence thereof and what action the Obligors are taking or propose to
take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within 30 days
after a Responsible Officer of either Obligor becoming aware of any of
the following, a written notice setting forth the nature thereof and
the action, if any, that Holdings 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 Holdings 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 (including a copy of
any notice thereof); or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by Holdings 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 Holdings or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, would reasonably be expected to have a Material
Adverse Effect;
(f) Litigation or Other Proceedings -- promptly, and in any
event within five Business Days after a Responsible Officer of either
Obligor becoming aware of any of the following, written notice of any
pending litigation or, to the knowledge of either Obligor, threat of
litigation against or affecting either Obligor or any Restricted
Subsidiary or any property of either Obligor or any Restricted
Subsidiary, that, individually or in the aggregate, is reasonably
likely 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 either Obligor or
any Restricted Subsidiary or relating to the ability of the Obligors to
perform their 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 of
Holdings setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Obligors were
in compliance with the requirements of Section 10.2 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 Holdings and its Restricted 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 either Obligor or any Restricted Subsidiary to comply with
any Environmental Law), specifying the nature and period of existence
thereof and what action the Obligors shall have taken or proposes to
take with respect thereto.
Section 7.3. Inspection. The Obligors 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 Obligors, to visit the principal executive office of each
Obligor, to discuss the affairs, finances and accounts of the Obligors
and the Restricted Subsidiaries with each Obligor's officers, and, with
the consent of the Obligors (which consent will not be unreasonably
withheld), to visit the other offices and properties of each Obligor
and the Restricted Subsidiaries, 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 Obligors to visit and inspect any of the offices
or properties of each Obligor or any Restricted Subsidiary, to examine
all their respective books of account, records, reports and other
papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective
officers and independent public
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accountants (and by this provision the Obligors authorize said
accountants to discuss the affairs, finances and accounts of the
Obligors and the Restricted Subsidiaries), all at such times and as
often as may be requested.
SECTION 8. PREPAYMENT OF THE NOTES.
Section 8.1. Required Prepayments.
(a) Restated Notes. The Company shall prepay on November 26, 2002,
$9,375,000 in principal amount of the Restated Notes at par; provided that upon
any partial prepayment of the Restated Notes pursuant to Section 8.2 or 8.3 or
purchase of Restated Notes pursuant to Section 8.6, the principal amount of such
required prepayment shall be reduced in the same proportion as the aggregate
unpaid principal amount of the Restated Notes is reduced as a result of such
prepayment or purchase pursuant to Sections 8.2, 8.3 or 8.6. Except as set forth
in Section 8.2, the Restated Notes may not be prepaid prior to maturity at the
option of the Obligors.
(b) Shelf Notes. Each Series of Shelf Notes shall be subject to the
required prepayments, if any, as are set forth in the Notes of such Series.
Except as set forth in Section 8.2, Shelf Notes may not be prepaid prior to
maturity at the option of the Obligors.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Obligors
may, at their option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes of any Series, in a minimum principal
amount of $5,000,000 in the case of a partial prepayment, at 100% of the
principal amount so prepaid, together with interest accrued thereon to the date
of such prepayment, plus the Make-Whole Amount determined for the prepayment
date with respect to such principal amount. The Obligors will give each holder
of Notes of such Series written notice of each optional prepayment under this
Section 8.2 not less than 10 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 such Series to be prepaid on such
date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.4), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid.
Section 8.3. Prepayment of Notes upon Change of Control. (a) In the
event that any Change of Control shall occur or either Obligor shall have
knowledge of any proposed Change of Control, the Obligors will give written
notice (the "Obligor Notice") of such fact in the manner provided in Section 18
hereof to the holders of the Notes and, if the Issuance Period has not
terminated, to Prudential. The Obligor Notice shall be delivered promptly upon
receipt of such knowledge by an Obligor and in any event no later than three
Business Days following the occurrence of any Change of Control. The Obligor
Notice shall (i) describe the facts and circumstances of such Change of Control
in reasonable detail, (ii) make reference to this Section 8.3 and the right of
the holders of the Notes to require prepayment of the Notes on the terms and
conditions provided for in this Section 8.3, (iii) offer in writing to prepay
the outstanding Notes, together with accrued interest to the date of prepayment,
and without payment of the Make-Whole Amount or any premium, (iv) specify a date
for such prepayment
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(the "Change of Control Prepayment Date"), which Change of Control Prepayment
Date shall be not more than 90 days nor less than 30 days following the date of
such Obligor Notice, and (v) specify that such holder is required to give notice
of its acceptance to be prepaid not later than 20 days after its receipt of the
Obligor Notice. Each holder of the then outstanding Notes shall have the right
to accept such offer and require prepayment of the Notes held by such holder in
full by written notice to an Obligor (a "Noteholder Notice") given not later
than 20 days after receipt of the Obligor Notice. The Obligors shall on the
Change of Control Prepayment Date prepay in full all of the Notes held by
holders which have so accepted such offer of prepayment. The prepayment price of
the Notes payable upon the occurrence of any Change of Control shall be an
amount equal to 100% of the outstanding principal amount of the Notes so to be
prepaid and accrued interest thereon to the date of such prepayment.
(b)(i) Without limiting the foregoing, notwithstanding any failure on
the part of the Obligors to give the Obligor Notice herein required, as a result
of the occurrence of a Change of Control each holder of the Notes shall have the
right by delivery of written notice to the Obligors to require the Obligors to
prepay, and the Obligors will prepay, such holder's Notes in full, together with
accrued interest thereon to the date of prepayment, and without payment of the
Make-Whole Amount or any premium. Notice of any required prepayment pursuant to
this Section 8.3(b)(i) shall be delivered by any holder of the Notes which was
entitled to, but did not receive, such Obligor Notice to the Obligors after such
holder has actual knowledge of such Change of Control. On the date (the "Change
of Control Delayed Prepayment Date") designated in such holder's notice (which
shall be not more than 90 days nor less than 30 days following the date of such
holder's notice), the Obligors shall prepay in full all of the Notes held by
such holder, together with accrued interest thereon to the date of prepayment.
If the holder of any Note gives any notice pursuant to this Section 8.3(b)(i),
the Obligors shall give an Obligor Notice within three Business Days of receipt
of such notice and identify the Change of Control Delayed Prepayment Date to all
other holders of the Notes and each of such other holders shall then and
thereupon have the right to accept the Obligors' offer to prepay the Notes held
by such holder in full and require prepayment of such Notes by delivery of a
Noteholder Notice within 20 days following receipt of such Obligor Notice;
provided only that any date for prepayment of such holder's Notes shall be the
Change of Control Delayed Prepayment Date. On the Change of Control Delayed
Prepayment Date, the Obligors shall prepay in full the Notes of each holder
thereof which has accepted such offer of prepayment at a prepayment price equal
to 100% of the outstanding principal amount of the Notes so to be prepaid and
accrued interest thereon to the date of such prepayment.
(ii) Compliance with the provisions of this Section 8.3(b) shall not be
deemed to constitute a waiver of, or consent to, any Default or Event of Default
caused by any violation of the provisions of Section 8.3(a).
(c) "Change of Control" means if any person (as such term is used in
section 13(d) and section 14(d)(2) of the Exchange Act as in effect on the date
of this Agreement) or related persons constituting a group (as such term is used
in Rule 13d-5 under the Exchange Act), become the "beneficial owners" (as such
term is used in Rule 13d-3 under the Exchange Act as in effect on the date of
this Agreement), directly or indirectly, of more than 50% of the issued and
outstanding common stock of Holdings.
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Section 8.4. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes of any Series (other than a partial prepayment
under Section 8.3), the principal amount of the Notes to be prepaid shall be
allocated among all of the Notes of such Series at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts
thereof.
Section 8.5. 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 Obligors 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 Holdings and cancelled and shall not be reissued, and no
Note shall be issued in lieu of any prepaid principal amount of any Note.
Section 8.6. Purchase of Notes. The Obligors will not and will not
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Notes except (a) upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes or (b) pursuant to an offer to purchase made by the Obligors or an
Affiliate pro rata to the holders of all Notes at the time outstanding upon the
same terms and conditions (but taking into account the respective interest rates
of each Series). Any such offer shall provide each holder with sufficient
information to enable it to make an informed decision with respect to such
offer, and shall remain open for at least 20 Business Days. If the holders of
more than 20% of the principal amount of the Notes then outstanding accept such
offer, the Obligors shall promptly notify the remaining holders of such fact and
the expiration date for the acceptance by holders of Notes of such offer shall
be extended by the number of days necessary to give each such remaining holder
at least 10 Business Days from its receipt of such notice to accept such offer.
The Obligors will promptly cancel all Notes acquired by either of them 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 8.7. Make-Whole Amount. The term "Make-Whole Amount" means,
with respect to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such Called Principal, provided that
the Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"Designated Spread" means 0 in the case of the Restated Notes
and .50% in the case of any Shelf Notes.
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"Discounted Value" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of any Note, the Designated Spread 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
PX1" on the Bloomberg Financial Services Screen (or such other display
as may replace Page PX1 on the Bloomberg Financial Services Screen) for
"on-the-run" 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 "on-the-run" 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
"on-the-run" U.S. Treasury security with the maturity closest to and
greater than the Remaining Average Life and (2) the "on-the-run" U.S.
Treasury security with the maturity closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
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"Settlement Date" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
SECTION 9. AFFIRMATIVE COVENANTS.
Each Obligor, jointly and severally, covenants that during the Issuance
Period and so long thereafter as any of the Notes are outstanding:
Section 9.1. Compliance with Law. Each Obligor 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 would
not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
Section 9.2. Insurance. Each Obligor will, and each Obligor will cause
each of the 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. Each Obligor will, and each
Obligor will cause each of the 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 either Obligor 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 Obligors have concluded that such discontinuance would not,
individually or in the aggregate, have a Material Adverse Effect.
Section 9.4. Payment of Taxes. Each Obligor will, and each Obligor will
cause each of its Subsidiaries to, file all income tax or similar 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 payable by any of them, to the extent such taxes
and assessments have become due and payable and before they have become
delinquent, provided that neither Obligor nor any of its Subsidiaries need pay
any such tax or assessment if (i) the amount, applicability or validity thereof
is contested by such Obligor or such Subsidiary on a timely basis in good faith
and in appropriate proceedings diligently conducted, and such
- 27 -
Obligor or such Subsidiary has established adequate reserves therefor in
accordance with GAAP on the books of such Obligor or such Subsidiary or (ii) the
failure to file such tax return or the nonpayment of all such taxes and
assessments in the aggregate would not reasonably be expected to have a Material
Adverse Effect.
Section 9.5. Corporate Existence, etc. Each Obligor will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Section 10.6, each Obligor will at all times preserve and keep in full force and
effect the corporate existence of the Restricted Subsidiaries and all rights and
franchises of such Obligor and its Restricted Subsidiaries unless, in the good
faith judgment of such Obligor, 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. Notes to Rank Pari Passu. The Notes of the Obligors are
and shall at all times rank at least pari passu as against the assets of each
Obligor with all other present and future unsecured Indebtedness (actual or
contingent) of such Obligor which is not expressed to be subordinate or junior
in rank to any other unsecured Debt of such Obligor.
Section 9.7. Ownership of the Company. Holdings shall at all times own
100%, directly or indirectly, of the issued and outstanding capital stock of the
Company.
Section 9.8. Changes in Status of Subsidiaries. (a) So long as no
Default or Event of Default shall have occurred and be continuing, a Senior
Financial Officer of Holdings may at any time and from time to time, upon not
less than 30 days' prior written notice given to each holder of Notes (and, if
the Issuance Period has not terminated, to Prudential), designate a previously
Unrestricted Subsidiary as a Restricted Subsidiary, provided that immediately
after such designation and after giving effect thereto (i) no Default or Event
of Default shall have occurred and be continuing and (ii) Holdings and its
Restricted Subsidiaries would be in compliance with the provisions of Sections
10.2, 10.3, 10.4, 10.5 and 10.7 hereof, assuming, for purposes of determining
such compliance, that the date of such designation was the last day of the most
recently ended Fiscal Quarter, and provided, further, that the status of such
Subsidiary had not previously been changed more than once.
(b) So long as no Default or Event of Default shall have occurred and
be continuing, a Senior Financial Officer of Holdings may at any time and from
time to time, upon not less than 30 days' prior written notice given to each
holder of Notes (and, if the Issuance Period has not terminated, to Prudential),
designate a previously Restricted Subsidiary (other than the Company and any
Restricted Subsidiary that owns, directly or indirectly, any capital stock of
the Company), or a new Subsidiary on the date of its formation or acquisition,
as an Unrestricted Subsidiary, provided that such designation is treated as a
sale of assets subject to the provisions of Section 10.6 and immediately after
such designation and after giving effect thereto (i) no Default or Event of
Default shall have occurred and be continuing, (ii) such previously Restricted
Subsidiary does not own, directly or indirectly, any Debt, shares of capital
stock or any other Securities of Holdings or any Restricted Subsidiary and (iii)
Holdings and its Restricted Subsidiaries would be in compliance with the
provisions of Sections 10.2, 10.3, 10.4, 10.5, 10.6 and 10.7 hereof, assuming,
for purposes of determining such compliance, that the date
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of such designation was the last day of the most recently ended Fiscal Quarter,
and provided, further, that the status of such Subsidiary had not previously
been changed more than once.
(c) Any notice of designation pursuant to this Section 9.8 shall be
accompanied by a certificate signed by a Responsible Officer of Holdings stating
that the provisions of this Section 9.8 have been complied with in connection
with such designation and setting forth the name of each other Subsidiary (if
any) which has or will become a Restricted Subsidiary or an Unrestricted
Subsidiary as a result of such designation.
SECTION 10. NEGATIVE COVENANTS.
Each Obligor covenants that during the Issuance Period and so long
thereafter as any of the Notes are outstanding:
Section 10.1. Transactions with Affiliates. Neither Obligor will, nor
will it permit any Restricted Subsidiary to enter into directly or indirectly
any transaction or 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 an Obligor or another Restricted
Subsidiary), except in the ordinary course and pursuant to the reasonable
requirements of such Obligor's or such Restricted Subsidiary's business and upon
fair and reasonable terms no less favorable to such Obligor or such Restricted
Subsidiary than would be obtainable in a comparable arm's-length transaction
with a Person not an Affiliate.
Section 10.2. Fixed Charges Coverage Ratio. The Obligors will not, at
any time, permit the Fixed Charges Coverage Ratio to be less than 1.75 to 1.00.
Section 10.3. Leverage Ratio; Minimum Shareholders' Equity. The
Obligors will not, at any time, permit (i) the Leverage Ratio to exceed 3.00 to
1.00 or (ii) Consolidated Shareholders' Equity to be less than $300,000,000.
Section 10.4. Priority Debt. The Obligors will not, at any time, permit
Priority Debt to exceed 20% of Consolidated Net Worth determined at such time.
Section 10.5. Investments. The Obligors will not, and will not permit
any Restricted Subsidiary to, make or have outstanding any Investments, other
than:
(a) Investments by Holdings and its Restricted Subsidiaries in
and to Restricted Subsidiaries, including any Investment in any Person
which, after giving effect to such Investment, will become a Restricted
Subsidiary or a division of Holdings or of a Restricted Subsidiary;
(b) Investments of Holdings and its Restricted Subsidiaries
existing as of the date of this Agreement and described on Schedule
5.18 hereto;
(c) Investments in Cash Equivalents;
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(d) Investments in mutual funds registered under the
Investment Company Act of 1940, as amended, which invest only in either
money market securities or United States Governmental Securities, in
either case, maturing within three years from the date of acquisition
thereof by such mutual fund;
(e) Investments in Related Industries, provided that such
Investments are in furtherance of the reasonable business purposes of
Holdings and its Restricted Subsidiaries and are not speculative in
nature;
(f) Subject to the limitations provided for under Section
10.6(b) hereof, Investments in Special Purpose Companies incidental to
the consummation of Qualifying Securitization Transactions and not
involving any significant investment of capital;
(g) Investments in property to be used in the ordinary course
of business of Holdings and its Restricted Subsidiaries;
(h) Investments in current assets arising from the sale of
goods and services in the ordinary course of business of Holdings and
its Restricted Subsidiaries; and
(i) Investments of Holdings and its Restricted Subsidiaries
not described in the foregoing clauses (a) through (h); provided that
the aggregate amount of all such Investments outstanding under this
clause (i) shall not at any time exceed 15% of Consolidated Net Worth.
As of any date of determination, each Investment shall be valued at the greater
of:
(x) the amount at which such is shown on the books of Holdings
or any of its Restricted Subsidiaries (or zero if such 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 Holdings or any of its Restricted
Subsidiaries has paid on account of such obligation less any
recoupment by Holdings or such Restricted Subsidiary of any
such payments, or
(ii) in the case of any other Investment, the excess
of (x) the greater of (A) the amount originally entered on the
books of Holdings or any of its Restricted Subsidiaries with
respect thereto and (B) the cost thereof to Holdings or its
Restricted Subsidiary over (y) any return of capital (after
income taxes applicable thereto) upon such Investment through
the sale or other liquidation thereof or part thereof or
otherwise.
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Section 10.6. Mergers, Consolidations and Sales of Assets. (a) The
Obligors will not, and will not permit any Restricted Subsidiary to, consolidate
with or be a party to a merger with any other Person, or sell, lease or
otherwise dispose of all or substantially all of its assets; provided that:
(i) any Subsidiary (other than the Company) may merge or
consolidate with or into, or transfer all or substantially all of its
assets to, Holdings or any Restricted Subsidiary so long as in (1) any
merger or consolidation involving an Obligor pursuant to this clause
(i), such Obligor shall be the surviving or continuing corporation, (2)
any merger or consolidation involving a Restricted Subsidiary (other
than the Company) (other than a merger or consolidation with Holdings),
a Restricted Subsidiary shall be the surviving or continuing
corporation, provided that any decrease in the percentage of the Voting
Stock of such Restricted Subsidiary beneficially owned, directly or
indirectly, by Holdings shall be treated as a disposition of such
Voting Stock by Holdings subject to the provisions of Section 10.6(b)
hereof and (3) at the time of such consolidation or merger and
immediately after giving effect thereto, no Default or Event of Default
would exist;
(ii) any Restricted Subsidiary (other than the Company) may
sell, lease or otherwise dispose of all or substantially all of its
assets in compliance with the provisions of Section 10.6(b);
(iii) either Obligor may consolidate or merge with or into any
other corporation if (1) the corporation which results from such
consolidation or merger (the "surviving corporation") is organized
under the laws of any state of the United States or the District of
Columbia, (2) if such Obligor is not the surviving corporation, the due
and punctual performance and observation of all of the covenants in
this Agreement and the Notes to be performed or observed by such
Obligor are expressly assumed in writing by the surviving corporation
(pursuant to such agreements and instruments as shall be satisfactory
in form and substance to the Required Holders of the Notes), and the
surviving corporation shall furnish to the Required Holders an opinion
of counsel satisfactory to such holders to the effect that the
agreements and instruments of assumption have been duly authorized,
executed and delivered and constitute the legal, valid and binding
contracts and agreements of the surviving corporation enforceable in
accordance with their respective terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles, and (3) at the
time of such consolidation or merger and immediately after giving
effect thereto, no Default or Event of Default would exist; and
(iv) the Obligors may, collectively, sell or otherwise dispose
of all or substantially all of their assets, taken as a whole (other
than as provided in this Section 10.6(a) and Section 10.6(c)) to any
Person for consideration which represents the fair market value of such
assets (as determined in good faith by a Senior Financial Officer of
such Obligor or, to the extent the approval of the Board of Directors
is required, the Board of Directors of such Obligor), at the time of
such sale or other
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disposition if (1) the acquiring Person is a corporation organized
under the laws of any state of the United States or the District of
Columbia, (2) the due and punctual performance and observance of all of
the covenants in this Agreement and the Notes to be performed or
observed by such Obligor are expressly assumed in writing by the
acquiring corporation (pursuant to such agreements and instruments as
shall be satisfactory in form and substance to the Required Holders of
the Notes), and the acquiring corporation shall furnish to the Required
Holders an opinion of counsel satisfactory to such holders to the
effect that the agreements and instruments of assumption have been duly
authorized, executed and delivered and constitute the legal, valid and
binding contracts and agreements of the surviving corporation
enforceable in accordance with their respective terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles, and
(3) at the time of such sale or disposition and immediately after
giving effect thereto, no Default or Event of Default would exist.
(b) The Obligors will not, and will not permit any Restricted
Subsidiary to, sell, lease, transfer, abandon or otherwise dispose of assets,
including, without limitation, any Restricted Subsidiary Stock of, or any
Investment in, any Restricted Subsidiary; provided that the foregoing
restrictions do not apply to:
(i) the sale, lease, transfer or other disposition of assets
of a Restricted Subsidiary (other than the Company) to Holdings or a
Restricted Subsidiary, provided that any sale, lease, transfer or other
disposition of assets from a transferring Restricted Subsidiary to
another Restricted Subsidiary with a larger minority interest than the
transferring Restricted Subsidiary shall be treated as a sale, lease,
transfer or other disposition of assets by such transferring Restricted
Subsidiary, to the extent that the minority interest of such other
Restricted Subsidiary exceeds the minority interest of the transferring
Restricted Subsidiary, subject to the provisions of Section 10.6(b)(v)
hereof; or
(ii) the sale of assets in the ordinary course of business for
fair market value; or
(iii) the sale or other disposition of all or substantially
all of the assets of the Obligors, taken as a whole, as provided in
Section 10.6(a)(iv) hereof; or
(iv) the sale, transfer or other disposition of Restricted
Subsidiary Stock (1) to qualify directors, (2) to comply with local
laws requiring multiple shareholders, or (3) in connection with a
merger or consolidation permitted under Section 10.6(a)(i); or
(v) the sale of assets (including, without limitation, (A) a
decrease in the percentage of Voting Stock of a Restricted Subsidiary
(other than the Company) beneficially owned, directly or indirectly, by
Holdings as a result of a merger or consolidation pursuant to Section
10.6(a)(i) hereof, (B) a sale, lease or other disposition of all or
substantially all of the assets of a Restricted Subsidiary (other than
the
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Company) pursuant to Section 10.6(a)(ii), (C) any Restricted Subsidiary
Stock of, or any Investment in, any Restricted Subsidiary pursuant to
Section 10.6(b)(i) and (D) an increase in the minority interest in the
stock and surplus of a Restricted Subsidiary as a result of the
issuance of stock by such Restricted Subsidiary permitted under Section
10.6(c)) for cash or Cash Equivalents to a Person or Persons other than
an Affiliate if all of the following conditions are met:
(1) the Disposition Value of such assets does not,
together with the Disposition Value of all other assets of
Holdings and its Restricted Subsidiaries previously disposed
of during the Fiscal Year in which such sale occurs (other
than pursuant to Sections 10.6(b)(i) (subject to the proviso
therein), 10.6(b)(ii), 10.6(b)(iii), 10.6(b)(iv) and
10.6(b)(vi)), exceed 15% of Consolidated Total Assets;
(2) a Senior Financial Officer of Holdings, or (to
the extent the approval of the Board of Directors is required)
the Board of Directors of Holdings (as evidenced by a
resolution thereof) shall have determined, that the proposed
sale, lease, transfer or other disposition is for fair value
and is in the best interests of Holdings and its Restricted
Subsidiaries;
(3) if, after giving effect to such sale, transfer or
other disposition of Restricted Subsidiary Stock of a
Restricted Subsidiary, such Restricted Subsidiary shall no
longer qualify to be a "Restricted Subsidiary" hereunder,
simultaneously with such sale, transfer or disposition, all
shares of such Restricted Subsidiary Stock related to such
Restricted Subsidiary and all Investment in such Restricted
Subsidiary at the time owned by Holdings and by every other
Restricted Subsidiary shall be sold, transferred or disposed
of as an entirety and such Restricted Subsidiary shall not
have any continuing Investment in Holdings or any other
Restricted Subsidiary not being simultaneously disposed of;
(4) any Restricted Subsidiary Stock of and Investment
in any Restricted Subsidiary that are sold, transferred or
otherwise disposed of shall be sold, transferred or otherwise
disposed of to a Person on terms reasonably deemed by a Senior
Financial Officer of Holdings or (to the extent the approval
of the Board of Directors is required) the Board of Directors
of Holdings to be adequate and satisfactory; and
(5) immediately after the consummation of the
transaction and after giving effect thereto no Default or
Event of Default would exist;
provided, however, that for purposes of the foregoing calculation,
there shall not be included any assets the net proceeds of which were
or are applied either (A) within twelve months after the date of sale
of such assets, to the acquisition of assets of a similar character
useful and intended to be used in the operation of the business of
Holdings and its Restricted Subsidiaries and having a fair market value
and a capacity to contribute to Consolidated EBITDA (as determined in
good faith by a Senior Financial Officer of
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Holdings or (to the extent the approval of the Board of Directors is
required) the Board of Directors of Holdings), in each case, at least
equal to that of the assets so disposed of or (B) immediately upon
receipt, to the prepayment, together with any applicable prepayment
premium, on a pro rata basis, of the Notes and any other Consolidated
Senior Funded Debt, provided that the Obligors may prepay any secured
Consolidated Senior Funded Debt then outstanding prior to unsecured
Consolidated Senior Funded Debt. It is understood and agreed by the
Obligors that any such proceeds paid and applied to the prepayment of
the Notes as hereinabove provided shall be prepaid as and to the extent
provided in Section 8.2; or
(vi) the sale or other transfer of Trade Receivables to a
Special Purpose Company pursuant to one or more Qualifying
Securitization Transactions, to the extent that the aggregate amount
outstanding under all financing facilities relating to such Qualifying
Securitization Transactions shall not exceed $75,000,000 at any time of
determination.
(c) The Obligors will not permit any Restricted Subsidiary to issue any
of its own stock (or any options or warrants to purchase stock or other
Securities exchangeable for or convertible into such stock) to any Person other
than an Obligor (except (i) to qualify directors, (ii) stock issued to comply
with local laws requiring multiple shareholders, or (iii) in connection with an
issuance of such stock whereby Holdings maintains its same direct or indirect
proportionate interest in such Restricted Subsidiary), unless
(i) such issuance is for cash consideration or Cash
Equivalents and after giving effect to such issuance of such stock,
such Restricted Subsidiary shall continue to be a "Restricted
Subsidiary" hereunder;
(ii) a Senior Financial Officer of Holdings, or (to the extent
the approval of the Board of Directors is required) the Board of
Directors of Holdings (as evidenced by a resolution thereof) shall have
determined that the proposed issuance of said stock is for fair value
and is in the best interest of Holdings and its Restricted
Subsidiaries;
(iii) said stock issued to a Person on terms reasonably deemed
by such Senior Financial Officer of Holdings or (to the extent the
approval of the Board of Directors is required) the Board of Directors
of Holdings to be adequate and satisfactory; and
(iv) such issuance shall be treated as a disposition of assets
by Holdings of a portion of such Restricted Subsidiary equal to the
increase in the minority interests in the stock and surplus of such
Restricted Subsidiary subject to the provisions of Section 10.6(b)
hereof.
Section 10.7. Limitation on Liens. The Obligors will not, and will not
permit any Restricted Subsidiary to, create or incur, or suffer to be incurred
or to exist, any Lien on its or their property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer any
property for the purpose of subjecting the same to the payment of obligations in
priority to the payment of its or their general creditors, or acquire or agree
to
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acquire, or permit any Restricted Subsidiary to acquire or agree to acquire, any
property or assets upon conditional sales agreements or other title retention
devices, except:
(a) Liens for taxes, assessments or other governmental charges
or levies which are not yet due and payable or if they can thereafter
be paid without penalty or the payment of which is not at the time
required by Section 9.4;
(b) any attachment or judgment Lien, unless either (i) the
judgment it secures shall not, within thirty (30) days after the entry
thereof, have been discharged or execution thereof stayed pending
appeal, or shall not have been discharged within thirty (30) days after
the expiration of any such stay or (ii) the judgment it secures, when
taken together with all other judgments under this subclause (ii)
related to attachment and judgment Liens under this clause (b), does
not exceed $5,000,000 in the aggregate;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, workmen, repairmen, 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 amount, applicability
or validity thereof is contested by such Obligor or such Restricted
Subsidiary on a timely basis in good faith and in appropriate
proceedings diligently conducted, and such Obligor or such Restricted
Subsidiary has established adequate reserves therefor in accordance
with GAAP on the books of such Obligor or such Restricted Subsidiary;
(d) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation obligations, unemployment insurance, other types
of social security or retirement benefits;
(e) Liens incurred in the ordinary course of business to
secure (i) the non-delinquent performance of bids, trade contracts,
leases (other than Capital Leases) and statutory obligations, (ii)
contingent obligations on surety bonds and appeal bonds, and (iii)
other similar non-delinquent 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, provided that such Liens, taken as a whole, would not, even
if enforced, have a Material Adverse Effect on Holdings and its
Restricted Subsidiaries, taken as a whole;
(f) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances
in the ordinary course of business, in each case incidental to, and not
interfering in any material respect with, the ordinary conduct of the
business of Holdings or any of its Restricted Subsidiaries, and which
do not in the aggregate materially impair the use of such property in
the operation of the business of Holdings and its Restricted
Subsidiaries, taken as a whole, or the value of such property for the
purposes of such business;
(g) Liens created or incurred after the date of this Agreement
given to secure all or any part of the purchase price, or to secure
Debt incurred solely for the purpose of
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financing the acquisition or purchase, of property (or any improvement
thereon) acquired by Holdings or a Restricted Subsidiary; provided that
(i) the Lien shall attach solely to the property (or
improvement thereon) so acquired or purchased,
(ii) such Lien shall have been created or incurred
contemporaneously with or within 180 days of the date of acquisition or
purchase of such property,
(iii) the aggregate principal amount of Debt secured by such
Lien and all other Debt secured by any other Lien on such property or
such improvement does not exceed in the aggregate 100% of the cost to
Holdings or such Restricted Subsidiary of such property (or improvement
thereon), and
(iv) at the time of creation, issuance, assumption, guarantee
or incurrence of the Debt secured by such Lien and after giving effect
thereto and to the application of the proceeds thereof, no Default or
Event of Default would exist;
(h) any such Lien existing on property or assets of a corporation at
the time such corporation is consolidated with or merged into Holdings or a
Restricted Subsidiary or its becoming a Restricted Subsidiary, or any Lien
existing on any property or assets acquired by Holdings or any Restricted
Subsidiary at the time such property or assets are so acquired (whether or not
the Debt secured thereby shall have been assumed), provided that (i) each such
Lien shall extend solely to the corporation or property or assets so acquired,
(ii) such Lien was not incurred in contemplation of such consolidation, merger
or acquisition, and (iii) at the time of creation, issuance, assumption,
guarantee or incurrence of the Debt secured by such Lien and after giving effect
thereto and to the application of the proceeds thereof, no Default or Event of
Default would exist;
(i) Liens securing operating leases with respect to personal property
pursuant to which Holdings or a Restricted Subsidiary is the lessee (excluding
financing leases, synthetic leases and similar arrangements), in each case
incidental to, and not interfering with, the ordinary conduct of the business of
Holdings or any of its Restricted Subsidiaries, provided that the Lien shall
attach solely to the leased property or assets;
(j) Liens existing on the date of this Agreement and securing the Debt
of Holdings and its Restricted Subsidiaries, provided that (i) no Liens securing
Debt in excess of $5,000,000 exist on the date of this Agreement and (ii) the
aggregate amount of all Debt secured by Liens existing on the date of this
Agreement does not exceed $12,000,000; and
(k) any extension, renewal or refunding of any Lien permitted by the
preceding clauses (g), (h) and (j) of this Section 10.7 in respect of the same
property theretofore subject to such Lien in connection with the extension,
renewal or refunding of the Debt secured thereby; provided that (i) such
extension, renewal or refunding of Debt
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shall be without increase in the principal amount remaining unpaid as
of the date of such extension, renewal or refunding, (ii) such Lien
shall attach solely to the same such property, (iii) the principal
amount remaining unpaid as of the date of such extension, renewal or
refunding of Debt is less than or equal to the fair market value of the
property (determined in good faith by the Board or Directors of
Holdings) to which such Lien is attached, (iv) at the time of such
extension, renewal or refunding and after giving effect thereto, no
Default or Event of Default would exist and (v) all Debt of Holdings
and the Company secured by any Lien with respect to any property of
Holdings or the Company and all Debt of the Restricted Subsidiaries
(other than the Company) shall not in the aggregate exceed 20% of
Consolidated Net Worth.
If, notwithstanding the prohibition contained herein, an Obligor shall,
or shall permit any Restricted Subsidiary to, directly or indirectly create,
incur, assume or permit to exist any Lien, other than those Liens permitted by
the provisions of paragraphs (a) through (k) of this Section 10.7, it will make
or cause to be made effective provision whereby the Notes will be secured
equally and ratably with any and all other obligations thereby secured, such
security to be pursuant to agreements reasonably satisfactory to the Required
Holders of the Notes and, in any such case, the Notes shall have the benefit, to
the fullest extent that, and with such priority as, the holders of the Notes may
be entitled under applicable law, of an equitable Lien on such property. Such
violation of this Section 10.7 will constitute an Event of Default, whether or
not provision is made for an equal and ratable Lien pursuant to this Section
10.7.
Section 10.8. Sale-and-Leaseback Transactions. The Obligors will not,
and will not permit any Restricted Subsidiary to, enter into any
Sale-and-Leaseback Transaction unless, immediately after giving effect thereto,
the aggregate amount of Priority Debt does not exceed 20% of Consolidated Net
Worth.
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 Obligors default 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 Obligors default in the payment of any interest on any
Note for more than five days after the same becomes due and payable; or
(c) the Obligors default in the performance of or compliance
with any term contained in Section 10.2, 10.3, 10.4, 10.5, 10.6, 10.7
or 10.8; or
(d) the Obligors default in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) or (c) of this Section 11) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
of either Obligor obtaining actual knowledge of such default and
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(ii) either Obligor receiving written notice of such default from any
holder of a Note (any such written notice to be identified as a "notice
of default" and to refer specifically to this paragraph (d) of Section
11); or
(e) any representation or warranty made in writing by or on
behalf of the Obligors or by any officer of an Obligor in this
Agreement 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
(f) (i) an Obligor 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
exceeding $10,000,000 beyond any period of grace provided with respect
thereto, or (ii) an Obligor 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 exceeding
$10,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such
default or condition such Indebtedness has become, or has been
declared, due and payable before its stated maturity or before its
regularly scheduled dates of payment; or
(g) an Obligor 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 an Obligor
or any Restricted Subsidiary, a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, or constituting an order for relief
or approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of an Obligor or any Restricted
Subsidiary, or any such petition shall be filed against an Obligor or
any Restricted Subsidiary and such petition shall not be dismissed
within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 are rendered against one or more of
the Obligors and the 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
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(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 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 Holdings 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 $50,000,000, (iv) Holdings 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) Holdings or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) Holdings 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 Holdings 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,
would reasonably be expected to have a Material Adverse Effect.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration. (a) If an Event of Default with respect to
either Obligor described in paragraph (g) or (h) of Section 11 (other than an
Event of Default described in clause (i) of paragraph (g) or described in clause
(vi) of paragraph (g) by virtue of the fact that such clause encompasses clause
(i) of paragraph (g)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of a majority in principal amount of the Notes of any Series
at the time outstanding may at any time at its or their option, by notice or
notices to either Obligor, declare all the Notes of such Series 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 of Notes at the time
outstanding affected by such Event of Default may at any time, at its option, by
notice or notices to either Obligor, declare all the Notes held by it to be
immediately due and payable.
Upon any Note 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,
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protest or further notice, all of which are hereby waived. Each Obligor
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
Obligors (except as herein specifically provided for) and that the provision for
payment of a Make-Whole Amount by the Obligors 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 of a Series have
been declared due and payable pursuant to clause (b) or (c) of Section 12.1, the
holders of not less than 66-2/3% in principal amount of the Notes of such Series
then outstanding, by written notice to the Obligors, may rescind and annul any
such declaration and its consequences if (a) the Obligors have paid all overdue
interest on the Notes of such Series, all principal of and Make-Whole Amount, if
any, on any Notes of such Series that are due and payable and are unpaid other
than by reason of such declaration, and all interest on such overdue principal
and Make-Whole Amount, if any, and (to the extent permitted by applicable law)
any overdue interest in respect of the Notes of such Series, at the respective
Default Rates, (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 of such Series . 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 Obligors under Section 15, the Obligors
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 Obligors shall keep at the
principal executive office of Holdings a register for the registration and
registration of transfers of Notes. The name and address of each holder of one
or more Notes, each transfer thereof and the name and address
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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 Obligors shall not be affected by any
notice or knowledge to the contrary. The Obligors 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. No Transfers of Notes to Competitors; Transfer and
Exchange of Notes. (a) Without the consent of Holdings, which consent shall not
be unreasonably withheld, no holder of a Note may transfer such Note to a
Competitor.
(b) Upon surrender of any Note at the principal executive office of
Holdings 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 Obligors shall
execute and deliver, at the Obligors' expense (except as provided below), one or
more new Notes (as requested by the holder thereof) of the same Series in
exchange therefor, in an aggregate principal amount equal to the unpaid
principal amount of the surrendered Note. Each such new Note shall be payable to
such Person as such holder may request and shall be substantially in the form of
Exhibit A-1 or A-2, as the case may be. 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 Obligors may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less than
$100,000, provided that if necessary to enable the registration of transfer by a
holder of its entire holding of Notes, one Note may be in a denomination of less
than $100,000. Any transferee of a Note, or purchaser of a participation
therein, shall, by its acceptance of such Note be deemed to make the same
representations to the Obligors regarding the Note or participation as the
Purchasers have made pursuant to Sections 6.1 and 6.2, provided that such entity
may (in reliance upon information provided by the Obligors, which shall not be
unreasonably withheld) make a representation to the effect that the purchase by
such entity of any Note will not constitute a non-exempt prohibited transaction
under Section 406(a) of ERISA.
Section 13.3. Replacement of Notes. Upon receipt by the Obligors of
evidence reasonably satisfactory to them of the ownership of and the loss,
theft, destruction or mutilation of any Note (which evidence shall be, in the
case of an Institutional Investor, notice from such Institutional Investor of
such ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another holder of a
Note with a minimum net worth of at least $50,000,000, such Person's
own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
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the Obligors at their 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 Cleveland, Ohio at the principal office of the
Company in such jurisdiction. The Obligors 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 an Obligor in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
Section 14.2. Home Office Payment. So long as any Purchaser or its
nominee shall be the holder of any Note, and notwithstanding anything contained
in Section 14.1 or in such Note to the contrary, the Obligors 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 such
Purchaser's name in Schedule A in the case of the Restated Notes and in the
applicable Confirmation of Acceptance in the case of any Shelf Notes, or by such
other method or at such other address as such Purchaser shall have from time to
time specified to Holdings 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 Obligors made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, such Purchaser shall
surrender such Note for cancellation, reasonably promptly after any such
request, to Holdings at its principal executive office or at the place of
payment most recently designated by the Obligors pursuant to Section 14.1. The
Obligors will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note purchased by any
Purchaser under this Agreement and that has made the same agreement relating to
such Note as such Purchaser has made in this Section 14.2.
SECTION 15. EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Obligors will pay all costs and
expenses (including reasonable attorneys' fees of a special counsel and, if
reasonably required, local or other counsel) incurred by each Purchaser or
holder of a Note in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement or the
Notes (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights
under this Agreement 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 (b) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of either Obligor or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes. The Obligors will pay,
- 42 -
and will save each Purchaser and each other holder of a Note harmless from, all
claims in respect of any fees, costs or expenses if any, of brokers and finders
(other than those retained by such Purchaser).
Section 15.2. Survival. The obligations of the Obligors under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by any Purchaser of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of such
Purchaser or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of an Obligor pursuant
to this Agreement shall be deemed representations and warranties of such Obligor
under this Agreement. Subject to the preceding sentence, this Agreement and the
Notes embody the entire agreement and understanding between each Purchaser and
the Obligors and supersede all prior agreements and understandings relating to
the subject matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement may be amended, and the
Obligors may take any action herein prohibited, or omit to perform any act
herein required to be performed by them, if the Obligors shall obtain the
written consent to such amendment, action or omission to act, of the Required
Holder(s) of the Notes, except that:
(i) without the written consent of the holders of all Notes of
a particular Series, and if an Event of Default shall have occurred and
be continuing, of the holders of all Notes of all Series, at the time
outstanding, the Notes of such Series may not be amended or the
provisions thereof waived to change the maturity thereof, to change or
affect the principal thereof, or to change or affect the rate or time
of payment of interest on or any Make Whole Amount payable with respect
to the Notes of such Series,
(ii) without the written consent of the holder or holders of
all Notes at the time outstanding, no amendment to or waiver of the
provisions of this Agreement shall change or affect the provisions of
Section 12 or this Section 17 insofar as such provisions relate to
proportions of the principal amount of the Notes of any Series, or the
rights of any individual holder of Notes, required with respect to any
declaration of Notes to be due and payable or with respect to any
consent, amendment, waiver or declaration,
(iii) without the written consent of Prudential, the
provisions of Section 2B may not be amended or waived (provided that if
any such amendment or waiver would affect any rights or obligations
with respect to the purchase and sale of Notes which shall
- 43 -
have become Accepted Notes prior to such amendment or waiver, the
requirements of clause (iv), below, must also be satisfied), and
(iv) without the written consent of all of the Purchasers
which shall have become obligated to purchase Accepted Notes of any
Series, no provision of Sections 2B or 3 may be amended or waived if
such amendment or waiver would affect the rights or obligations with
respect to the purchase and sale of the Accepted Notes of such Series
or the terms and provisions of such Accepted Notes.
Each holder of any Note at the time or thereafter outstanding shall be bound by
any consent authorized by this Section 17, whether or not such Note shall have
been marked to indicate such consent. No course of dealing between the Obligors
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.
Section 17.2. 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 Obligors
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
Obligors 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 17.3. Notes Held by the Obligors, etc. Solely for the purpose
of determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes or any Series thereof then outstanding approved or
consented to any amendment, waiver or consent to be given under this Agreement
or the Notes or any Series thereof, or have directed the taking of any action
provided herein or in the Notes or any Series thereof to be taken upon the
direction of the holders of a specified percentage of the aggregate principal
amount of Notes or any Series thereof then outstanding, Notes directly or
indirectly owned by the Obligors or any of their Affiliates shall be deemed not
to be outstanding.
SECTION 18. NOTICES.
All notices and communications provided for hereunder (other than
communications provided for in Section 2, which shall be provided as
contemplated therein) 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 any Purchaser or its nominee, to such Purchaser or
it at the address specified for such communications in Schedule A in
the case of Restated Notes or to the
- 44 -
address specified in the applicable Confirmation of Acceptance in the
case of any Shelf Notes, or at such other address as such Purchaser or
it shall have specified to the Obligors in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Obligors
in writing, or
(iii) if to an Obligor, to such Obligor at its address set
forth at the beginning hereof to the attention of the Treasurer of such
Obligor, or at such other address as such Obligor 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 any Purchaser on any
Closing Day (except the Notes themselves), and (c) financial
statements, certificates and other information previously or hereafter
furnished to any Purchaser, may be reproduced by such Purchaser by any
photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and such Purchaser may destroy any original
document so reproduced. Each Obligor agrees and stipulates that, to the
extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence
and whether or not such reproduction was made by such Purchaser in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence. This Section 19 shall not prohibit the Obligors or any other
holder of Notes from contesting any such reproduction to the same
extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.
SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to any Purchaser or other holder of the Notes (each a
"Recipient") by or on behalf of either Obligor or any Subsidiary in connection
with the transactions contemplated by or otherwise pursuant to this Agreement
that is proprietary in nature and that was clearly marked or labeled or
otherwise adequately identified when received by such Recipient as being
confidential information of such Obligor or such Subsidiary, provided that such
term does not include information that (a) was publicly known or otherwise known
to such Recipient prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by such Recipient or any person acting
on such Recipient's behalf, (c) otherwise becomes known to such Recipient other
than through disclosure by an Obligor or any Subsidiary or (d) constitutes
financial statements delivered to such Recipient under Section 7.1 that are
otherwise publicly available. Each Recipient will maintain the confidentiality
of such Confidential Information in accordance with procedures adopted by such
Recipient in good faith to protect confidential information of third parties
delivered to such Recipient, provided that such Recipient may deliver
- 45 -
or disclose Confidential Information to (i) such Recipient's directors,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by such Recipient's Notes), (ii) such Recipient's financial advisors
and other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20, (iii)
any other holder of any Note, (iv) any Institutional Investor to which such
Recipient sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
20), (v) any Person from which such Recipient offers to purchase any security of
an Obligor (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20), (vi)
any federal or state regulatory authority having jurisdiction over such
Recipient, (vii) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that requires
access to information about such Recipient's investment portfolio, or (viii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to such Recipient, (x) in response to any subpoena or other legal
process, (y) in connection with any litigation to which such Recipient is a
party or (z) if an Event of Default has occurred and is continuing, to the
extent such Recipient may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the
rights and remedies under such Recipient's Notes and this Agreement. Each holder
of a Note, by its acceptance of a Note, will be deemed to have agreed to be
bound by and to be entitled to the benefits of this Section 20 as though it were
a party to this Agreement. On reasonable request by the Obligors 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 or any other
holder that shall have previously delivered such a confirmation), such holder
will confirm in writing that it is bound by the provisions of this Section 20.
SECTION 21. [INTENTIONALLY OMITTED.]
SECTION 22. MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note) whether so
expressed or not.
Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any
- 46 -
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 fewer 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.
Section 22.7. Consent to Jurisdiction and Service of Process. (a) To
the extent permitted by applicable law, each Obligor (i) hereby irrevocably
submits to the nonexclusive jurisdiction of the Supreme Court of the State of
New York, New York County (without prejudice to the rights of any holder of a
Note to remove to the United States District Court for the Southern District of
New York) and to the nonexclusive jurisdiction of the United States District
Court for the Southern District of New York, for the purposes of any suit,
action or other proceeding arising out of this Agreement, or the subject matter
hereof or any of the transactions contemplated hereby or thereby brought by any
holder of the Notes, (ii) hereby irrevocably agrees that all claims in respect
of such action or proceeding may be heard and determined in such New York State
court or, to the fullest extent permitted by applicable law, in such federal
court, and (iii) hereby irrevocably waives, and agrees not to assert, by way of
motion, as a defense, or otherwise, in any such suit, action or proceeding any
claim that is not personally subject to the jurisdiction of the above-named
courts, that the suit, action or proceeding is improper or that this Agreement,
or the subject matter hereof may not be enforced in or by such court.
(b) A final judgment obtained in respect of any action, suit or
proceeding referred to in this Section 22.7 shall be conclusive and may be
enforced in other jurisdictions by suit or judgment or in any manner as provided
by applicable law. Each Obligor hereby consents to service of process by
registered mail, Federal Express, or similar courier at its address set forth in
Section 18, it being agreed that service in such manner shall constitute valid
service upon or its respective successors or assigns in connection with any such
action or proceeding only; provided, however, that nothing in this Section 22.7
shall affect the right of any holder of the Notes to serve legal process in any
other manner permitted by applicable law.
- 47 -
When this Agreement is executed and delivered by Prudential and the
Obligors, it shall become a binding agreement between Prudential and the
Obligors, amending and restating the Existing Agreement as provided herein. This
Agreement shall also inure to the benefit of each Purchaser which shall have
executed and delivered a Confirmation of Acceptance, and each such Purchaser
shall be bound by this Agreement to the extent provided in such Confirmation of
Acceptance.
* * * * *
- 48 -
Very truly yours,
LINCOLN ELECTRIC HOLDINGS, INC.
By
----------------------------------------
Title:
By
Title:
THE LINCOLN ELECTRIC COMPANY
By
----------------------------------------
Title:
By
----------------------------------------
Title:
The foregoing is hereby
agreed to as of the
date thereof.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By:
---------------------------------------
Its: Vice President
- 49 -
EXHIBIT A-1
[FORM OF RESTATED NOTE]
LINCOLN ELECTRIC HOLDINGS, INC.
THE LINCOLN ELECTRIC COMPANY
8.73% SENIOR NOTE DUE NOVEMBER 26, 2003
No. [ ] [Date]
_______
$[ ]
__________
FOR VALUE RECEIVED, the undersigned, LINCOLN ELECTRIC HOLDINGS, INC.,
an Ohio corporation and THE LINCOLN ELECTRIC COMPANY, an Ohio corporation
(collectively, the "Obligors"), hereby, jointly and severally, promise to pay to
[_____________________] or registered assigns, the principal sum of
[______________] DOLLARS on November 26, 2003 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 8.73% per annum from the date hereof, payable quarterly,
on the 26th day of February, May, August and November in each year, commencing
with the February 26, May 26, August 26 or November 26 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 Agreement referred to
below), payable quarterly as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to the
greater of (i) 10.73% or (ii) 2% over the rate of interest publicly announced by
The Bank of New York from time to time in New York, New York as its "base" or
"prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of the Company in Cleveland, Ohio, or at such
other place as the Obligors shall have designated by written notice to the
holder of this Note as provided in the Agreement referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes"), issued pursuant to the Amended and Restated Note Purchase and Private
Shelf Agreement, dated as of April 30, 2002 (as from time to time amended, the
"Agreement"), among the Obligors, on the one hand, and The Prudential Insurance
Company of America and each Prudential Affiliate (as defined in the Agreement)
which may become party thereto, on the other hand, 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 Agreement and (ii) to have made the representations set forth
in Sections 6.1 and 6.2 of the Agreement, provided that such holder may (in
reliance upon information provided by the Obligors, which shall not be
unreasonably withheld) make a representation to the effect that the purchase by
such holder of any Note will not constitute a non-exempt prohibited transaction
under Section 406(a) of ERISA.
- 50 -
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for a like principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the
Obligors 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
Obligors will not be affected by any notice to the contrary.
Required prepayments of this Note shall be made on the dates and in the
amounts set forth in the Agreement. This Note is also subject to optional
prepayment, in whole or from time to time in part, at the times and on the terms
specified in the Agreement, but not otherwise.
If an Event of Default, as defined in the Agreement, occurs and is
continuing, the principal of this Note may be declared or otherwise become due
and payable in the manner, at the price (including any applicable Make-Whole
Amount) and with the effect provided in the Agreement.
The Note and the Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws 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.
LINCOLN ELECTRIC HOLDINGS, INC.
By
---------------------------------------
Title:
By
--------------------------------------
Title:
THE LINCOLN ELECTRIC COMPANY
By
---------------------------------------
Title:
By
---------------------------------------
- 51 -
EXHIBIT A-2
[FORM OF NOTE]
LINCOLN ELECTRIC HOLDINGS, INC.
LINCOLN ELECTRIC COMPANY
SERIES ____ SENIOR NOTE
No.
______
ORIGINAL PRINCIPAL AMOUNT
ORIGINAL ISSUE DATE:
INTEREST RATE:
INTEREST PAYMENT DATES:
FINAL MATURITY DATE:
PRINCIPAL PREPAYMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, Lincoln Electric Holdings, Inc.
and Lincoln Electric Company (collectively, the "Obligors"), hereby jointly and
severally promise to pay to _____________________________, or registered
assigns, the principal sum of ________________ DOLLARS [on the Final Maturity
Date specified above] [, payable on the Principal Prepayment Dates and in the
amounts specified above, and on the Final Maturity Date as specified above in an
amount equal to the unpaid balance of the principal hereof,] with interest
(computed on the basis of a 360-day year--30-day month) (a) on the unpaid
balance thereof at the Interest Rate per annum specified above, payable on each
Interest Payment Date specified above and on the Final Maturity Date specified
above, commencing with the Interest Payment Date next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) on
any overdue payment (including any overdue prepayment) of principal, any overdue
payment of Make-Whole Amount and any overdue payment of interest, payable on
each Interest Payment Date as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to the
greater of (i) 2% over the Interest Rate specified above or (ii) 2% over the
rate of interest publicly announced by The Bank of New York in New York, New
York, as its "base" or "prime" rate.
Payments of principal, Make-Whole Amount, if any, and interest are to
be made at the principal place of business of Lincoln Electric Company (the
"Company") in Cleveland, Ohio, or at such other place as the Obligors shall have
designated by written notice to the holder of this Note as provided in the
Agreement referred to below, in lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to an Amended and Restated Note Purchase and Private
Shelf Agreement, dated as of April 30, 2002 (herein called the "Agreement"),
between the Obligors, on the one hand, and The Prudential Insurance Company of
America and each Prudential Affiliate which becomes party thereto, on the other
hand, and is entitled to the benefits thereof. Capitalized terms used and not
otherwise defined herein shall have the meanings provided in the Agreement.
- 52 -
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
Agreement and (ii) to have made the representations set forth in Sections 6.1
and 6.2 of the Agreement; provided that such holder may (in reliance upon
information provided by the Obligors, which shall not be unreasonably withheld)
make a representation to the effect that the purchase by such holder of any Note
will not constitute a non-exempt prohibited transaction under Section 406(a) of
ERISA.
This Note is subject to optional prepayment, in whole or from time to
time in part, on the terms specified in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for the then outstanding principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Obligors 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 Obligors shall not be affected by any notice to the
contrary.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the internal 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.
LINCOLN ELECTRIC
HOLDINGS, INC.
By:
--------------------------------------
Title:
-----------------------------------
LINCOLN ELECTRIC COMPANY
By:
-------------------------------------
Title:
------------------------------------
- 53 -
EXHIBIT B
[FORM OF REQUEST FOR PURCHASE]
LINCOLN ELECTRIC HOLDINGS, INC.
LINCOLN ELECTRIC COMPANY
Reference is made to the Amended and Restated Note Purchase Private
Shelf Agreement (the "Agreement"), dated as of April 30, 2002 between Lincoln
Electric Holdings, Inc. and Lincoln Electric Company (collectively the
"Obligors"), on the one hand, and The Prudential Insurance Company of America
("Prudential") and each Prudential Affiliate which becomes party thereto, on the
other hand. Capitalized terms used and not otherwise defined herein shall have
the respective meanings specified in the Agreement.
Pursuant to Section 2B(3) of the Agreement, the Obligors hereby make
the following Request for Purchase:
1. Aggregate principal amount of
the Notes covered hereby
(the "Notes") ........................ $ (1)
------------
2. Individual specifications of the Notes:
Principal
Final Prepayment Interest
Principal Maturity Dates and Payment
Amount Date(2) Amounts(2) Period(3)
- ------ ------- ---------- ---------
3. Use of proceeds of the Notes:
4. Proposed day for the closing of the purchase and sale of the
Notes:
5. The purchase price of the Notes is to be transferred to:
- -------------
1 Minimum principal amount of $10,000,000.
2 Maturity of not more than 15 years and average life of not more than 12
years.
3 Quarterly or semi-annually in arrears.
- 54 -
Name, Address
and ABA Routing Number of
Number of Bank Account
- -------------- -------
6. The Obligors certify (a) that the representations and
warranties contained in Section 5 of the Agreement are true on
and as of the date of this Request for Purchase and (b) that
there exists on the date of this Request for Purchase no Event
of Default or Default.
Dated: LINCOLN ELECTRIC HOLDINGS, INC.
By:
--------------------------------------
Its:
-------------------------------------
LINCOLN ELECTRIC COMPANY
By:
-------------------------------------
Its:
------------------------------------
- 55 -
EXHIBIT C
[FORM OF CONFIRMATION OF ACCEPTANCE]
LINCOLN ELECTRIC HOLDINGS, INC.
LINCOLN ELECTRIC COMPANY
Reference is made to the Amended and Restated Note Purchase and Private
Shelf Agreement (the "Agreement"), dated as of April 30, 2002 between Lincoln
Electric Holdings, Inc. and Lincoln Electric Company (collectively, the
"Obligors") on the one hand, and The Prudential Insurance Company of America
("Prudential") and each Prudential Affiliate which becomes party thereto, on the
other hand. All terms used herein that are defined in the Agreement have the
respective meanings specified in the Agreement.
Prudential or the Prudential Affiliate which is named below as a
Purchaser of Notes hereby confirms the representations as to such Notes set
forth in Section 6 of the Agreement, and agrees to be bound by the provisions of
Sections 2B(5) and 2B(7) of the Agreement relating to the purchase and sale of
such Notes.
Pursuant to Section 2B(5) of the Agreement, an Acceptance with respect
to the following Accepted Notes is hereby confirmed:
I. Accepted Notes: Aggregate principal
amount $
----------------------------
(A) (a) Name of Purchaser:
(b) Principal amount:
(c) Final Maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period: semi-annually
(g) Payment and notice instructions: As set forth on
attached Purchaser Schedule
(B) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period: semi-annually
(g) Payment and notice instructions: As set forth on
attached Purchaser Schedule
[(C), (D).....same information as above.]
- 56 -
II. Closing Day:
Dated:
LINCOLN ELECTRIC HOLDINGS, INC.
By:
------------------------------------------
Its:
------------------------------------------
LINCOLN ELECTRIC COMPANY
By:
------------------------------------------
Its:
------------------------------------------
[THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA]
By:
------------------------------------------
Vice President
[PRUDENTIAL AFFILIATE]
By:
------------------------------------------
Vice President
- 57 -
EXHIBIT D-1
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of Frederick G. Steuber]
[Date of Closing]
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601
Ladies and Gentlemen:
As General Counsel of Lincoln Electric Holdings, Inc. ("Holdings") and
Lincoln Electric Company (the "Company" and, together with Holdings,
individually an "Obligor" and collectively the "Obligors"), I am familiar with
the Note Purchase and Private Shelf Agreement, dated as of , 2002 (the
"Agreement") between the Obligors, on the one hand, and The Prudential Insurance
Company of America and each Prudential Affiliate which becomes a party thereto,
on the other hand, pursuant to which the Obligors have issued to you today their
8.73% senior promissory notes in the aggregate principal amount of $18,750,000
(the "Notes"). Capitalized terms used and not otherwise defined herein shall
have the meanings provided in the Agreement. This letter is being delivered to
you in satisfaction of the condition set forth in Section 4.4 of the Agreement
and with the understanding you are purchasing the Notes in reliance on the
opinions expressed herein.
In this connection, I have examined such certificates of public
officials, certificates of officers of the Obligors and copies certified to my
satisfaction of corporate documents and records of the Obligors and of other
papers, and have made such other investigations, as I have deemed relevant and
necessary as a basis for my opinion hereinafter set forth. I have relied upon
such certificates of public officials and of officers of the Obligors with
respect to the accuracy of material factual matters contained therein which were
not independently established. With respect to the opinion expressed in
paragraph 9 below, I have also relied upon the representation made by you in
Section 6.1 of the Agreement.
Based on the foregoing, it is my opinion that:
1. Each Obligor is a corporation, duly incorporated, validly existing
and in good standing under the laws of the State of Ohio, has the corporate
power and authority to execute and deliver, and perform its obligations under
the Agreement and the Notes and has the full corporate power and authority to
conduct the business in which it is now engaged. Each Obligor
- 58 -
is duly licensed or 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 licensing or
qualification necessary, except where the failure to be so licensed, qualified
or in good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
2. The Agreement has been duly authorized by all necessary corporate
action on the part of each Obligor, has been duly executed and delivered by each
Obligor and constitutes the legal, valid and binding obligation of each Obligor,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary corporate
action on the part of each Obligor, have been duly executed and delivered by
each Obligor and constitute the legal, valid and binding obligations of each
Obligor, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance or similar laws affecting creditors' rights
generally, and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or at
law).
4. No approval or consent on the part of, or filing or registration
with, any governmental body of the United States, the State of Ohio or the State
of New York, is required in connection with the execution, delivery and
performance of the Agreement or the Notes by the Obligors.
5. The issuance and sale of the Notes and the execution, delivery and
performance by each Obligor or the Agreement do not violate any law or any order
of any court or Governmental Authority or agency applicable to such Obligor, or
conflict with or result in any breach of any of the provisions of or constitute
a default under or result in the creation of imposition of any Lien upon any of
the property of such Obligor pursuant to the provisions of the Articles of
Incorporation or Code of Regulations of such Obligor or any agreement or other
instrument known to such counsel to which such Obligor is a party or by which
such Obligor may be bound.
6. The offer, sale and delivery of the Notes under the circumstances
contemplated by the Agreement do not, under existing law, require the
registration of the Notes under the Securities Act of 1933, as amended, or the
qualification of the Agreement under the Trust Indenture Act of 1939, as
amended.
7. Neither Obligor is required to register as an "investment company"
under the Investment Company Act of 1940, as amended.
8. In a properly presented and argued case, a court of the State of
Ohio (or a United States court sitting in the State of Ohio) applying the
contractual choice of law rules and principles applied by such courts under the
laws of that State should apply the substantive laws
- 59 -
of the State of New York to matters involving the validity, construction
enforcement and interpretation of the Agreement and the Notes.
Sincerely,
Frederick G. Steuber
- 60 -
SCHEDULE A
RESTATED NOTES
NAME AND ADDRESS
OF PURCHASER PRINCIPAL AMOUNT OF NOTES
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
c/o Prudential Capital Group
Two Prudential Plaza, Suite 5600 $18,750,000
Chicago, Illinois 60601
Attention: Managing Director
Telecopy: (312) 540-4222
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
"Lincoln Electric Holdings, Inc. and The Lincoln Electric Company 8.73% Senior
Notes due November 26, 2003" and the application as among principal, premium or
interest) to:
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, and written confirmation of each such payment
to be addressed to:
The Prudential Insurance Company of America
c/o Investment Operations Group
Gateway Center Four, 10th Floor
100 Mulberry Street
Newark, New Jersey 07102-4077
Attention: Manager
Recipient of telephonic prepayment notices:
Manager, Trade Management Group
Telephone: (973) 802-8107
Facsimile: (973) 802-9425
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 22-1211670
- 61 -
SCHEDULE B
DEFINED TERMS
GENERAL PROVISIONS
Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, the same shall be done in accordance with GAAP, to the extent
applicable, except where such principles are inconsistent with the express
requirements of this Agreement.
DEFINITIONS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Acceptance" is defined in Section 2B(5).
"Acceptance Day" is defined in Section 2B(5).
"Acceptance Window" is defined in Section 2B(5).
"Accepted Note" is defined in Section 2B(5).
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person. 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
Holdings.
"Agreement" means this Agreement as amended and otherwise modified from
time to time.
"Attributable Debt" means, as to any particular lease relating to a
Sale-and-Leaseback Transaction, the present value of all Lease Rentals required
to be paid by the Holdings or any Restricted Subsidiary under such lease during
the remaining term thereof (determined in accordance with generally accepted
financial practice using a discount factor equal to the interest rate implicit
in such lease if known or, if not known, of 7% per annum).
"Authorized Officer" means (i) in the case of the Obligors, any officer
of an Obligor designated as its "Authorized Officer" in the Information Schedule
and any other officer thereof designated as an "Authorized Officer" of an
Obligor for purposes of this Agreement in an Officer's Certificate executed by
one of their Authorized Officers and (ii) in the case of
- 62 -
Prudential, any officer of Prudential designated as its "Authorized Officer" in
the Information Schedule or any officer of Prudential designated as its
"Authorized Officer" for the purpose of this Agreement in a certificate executed
by one of its Authorized Officers. Any action taken under this Agreement on
behalf of the Obligors by any individual who on or after the date of this
Agreement shall have been an Authorized Officer of an Obligor and whom
Prudential in good faith believes to be an Authorized Officer of an Obligor at
the time of such action shall be binding on the Obligors even though such
individual shall have ceased to be an Authorized Officer of an Obligor, and any
action taken under this Agreement on behalf of Prudential by any individual who
on or after the date of this Agreement shall have been an Authorized Officer of
Prudential, and whom the Obligors in good faith believe to be an Authorized
Officer of Prudential at the time of such action shall be binding on Prudential
even though such individual shall have ceased to be an Authorized Officer of
Prudential.
"Business Day" means (a) for the purposes of Section 8.7 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 New York, New York, or Cleveland, Ohio are
required or authorized to be closed.
"Cancellation Date" is defined in Section 2B(8)(iv).
"Cancellation Fee" is defined in Section 2B(8)(iv).
"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.
"Cash Equivalents" means investments in (i) United States Governmental
Securities maturing within 365 days from the date of acquisition thereof; (ii)
negotiable certificates of deposit and bankers' acceptances maturing within 365
days from the date of acquisition thereof issued by any commercial bank or trust
company organized under the laws of the United States or any state thereof or
the District of Columbia, having at any date of determination combined capital
and surplus and retained earnings of not less than $100,000,000, provided, that
the long-term unsecured debt obligations of such bank or trust company (or the
long-term unsecured debt obligations of the bank holding company owning all of
the capital stock of such bank or trust company) shall have been given a rating
of "A" or better by S&P or an equivalent rating by any other credit rating
agency of recognized national standing, and (iii) commercial paper maturing not
more than 270 days from the date of issuance thereof which has a rating, at the
time of acquisition by Holdings or such Restricted Subsidiary, of "A-1" or
better by S&P or an equivalent rating by any other credit rating agency of
recognized national standing.
- 63 -
"Closing Day" means (i) with respect to the Restated Notes, the
Restated Notes Closing Day and (ii) with respect to any Accepted Note, the
Business Day specified for the closing of the purchase and sale of such Accepted
Note in the Request for Purchase of such Accepted Note, provided that (a) if the
Obligors and the Purchaser which is obligated to purchase such Accepted Note
agree in writing on an earlier Business Day for such closing, the "Closing Day"
for such Accepted Note shall be such earlier Business Day, and (b) if the
closing of the purchase and sale of such Accepted Note is rescheduled pursuant
to Section 2B(7), the Closing Day for such Accepted Note, for all purposes of
this Agreement except references to "original Closing Day" in Section
2B(8)(iii), shall mean the Rescheduled Closing Day with respect to such Accepted
Note.
"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 The Lincoln Electric Company, an Ohio corporation.
"Competitor" shall mean any Person that directly or indirectly through
its Affiliates has substantial operations related to the welding and cutting
industry, including the manufacture and sale of welding and cutting equipment
and related consumables, industrial gases and gas apparatus, lasers and
robotics for welding applications, and the engineered adhesives and industrial
fastener industries, 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 shall not of itself cause the Person
providing such services to be deemed to be a Competitor; and
(b) in no event shall an Institutional Investor be deemed a
Competitor unless such Institutional Investor controls, or is
controlled by, or is under common control with, a Person that is
substantially engaged in the welding and cutting industry, including
the manufacture and sale of welding and cutting equipment and related
consumables, industrial gases and gas apparatus, lasers and robotics
for welding applications, and the engineered adhesives and industrial
fastener industries.
"Confidential Information" is defined in Section 20.
"Consolidated Debt" means, as of any date of determination, the sum of
all Debt of Holdings and its Restricted Subsidiaries outstanding on such date,
after eliminating all offsetting debits and credits between Holdings and its
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of Holdings and
its Restricted Subsidiaries in accordance with GAAP.
"Consolidated EBITDA" for any period means the sum of (a) Consolidated
Net Income during such period plus (to the extent deducted in determining
Consolidated Net Income for such period), (b) all provisions for any Federal,
state or local income taxes made by Holdings and its Restricted Subsidiaries
during such period, (c) all provisions for depreciation and amortization (other
than amortization of debt discount) made by Holdings and its Restricted
Subsidiaries during such period, and (d) Interest Charges during such period.
- 64 -
"Consolidated Fixed Charges" means, with respect to any period, on a
consolidated basis the sum of (a) Interest Charges for such period and (b) Lease
Rentals for such period.
"Consolidated Funded Debt" means, as of any date of determination, the
sum of all Funded Debt of Holdings and its Restricted Subsidiaries outstanding
on such date, after eliminating all offsetting debits and credits between
Holdings and its Restricted Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated financial statements
of Holdings and its Restricted Subsidiaries in accordance with GAAP.
"Consolidated Income Available for Fixed Charges" means, with respect
to any period, Consolidated Net Income for such period plus all amounts deducted
in the computation thereof on account of (a) Consolidated Fixed Charges and (b)
taxes imposed on or measured by income or excess profits.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of Holdings and its Restricted Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between Holdings and its
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of Holdings and
its Restricted Subsidiaries in accordance with GAAP, provided that there shall
be excluded:
(a) the income (or loss) of any Person accrued prior to the
date it becomes a Restricted Subsidiary or is merged into or
consolidated with Holdings or a Restricted Subsidiary, and the income
(or loss) of any Person, substantially all of the assets of which have
been acquired in any manner, realized by such other Person prior to the
date of acquisition,
(b) the income (or loss) of any Person (other than a
Restricted Subsidiary) in which Holdings or any Restricted Subsidiary
has an ownership interest, except to the extent that any such income
has been actually received by Holdings or such Restricted Subsidiary in
the form of cash dividends or similar cash distributions,
(c) the undistributed earnings of any Restricted Subsidiary to
the extent that, to the best of the knowledge of the Obligors, the
declaration or payment of dividends or similar distributions by such
Restricted Subsidiary is (i) not at the time permitted by the terms of
its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Restricted
Subsidiary, or (ii) otherwise unavailable for payment,
(d) any aggregate net gain (but not any aggregate net loss)
during such period arising from the sale, conversion, exchange or other
disposition of Investments or capital assets (such term to include,
without limitation, the following, whether or not current: all fixed
assets, whether tangible or intangible, and all inventory sold in
conjunction with the disposition of fixed assets), and any taxes on
such net gain (or net loss),
- 65 -
(e) any gains resulting from any write-up or reappraisal of
any assets (but not any losses resulting from any write-down or
reappraisal of any assets),
(f) any net gain from the collection of the proceeds of life
insurance policies,
(g) any gain arising from the acquisition of any Security, or
the extinguishment, under GAAP, of any Debt, of Holdings or any
Restricted Subsidiary,
(h) any deferred or other credit representing the excess of
equity in any Restricted Subsidiary at the date of acquisition over the
cost of the investment in such Restricted Subsidiary; and
(i) any non-cash charges related to the implementation by
Holdings and its Restricted Subsidiaries of FASB Statement 142.
"Consolidated Net Worth" means, at any time,
(a) the sum (adjusted for any non-cash charges related to the
implementation by Holdings and its Restricted Subsidiaries of FASB
Statement 142) of (i) the par value (or value stated on the books of
the corporation) of the capital stock (but excluding treasury stock and
capital stock subscribed and unissued) of Holdings and its Restricted
Subsidiaries plus (ii) the amount of the paid-in capital and retained
earnings of Holdings and its Restricted Subsidiaries, in each case as
such amounts would be shown on a consolidated balance sheet of Holdings
and its Restricted Subsidiaries as of such time prepared in accordance
with GAAP, minus
(b) to the extent included in clause (a), all amounts properly
attributable to minority interests, if any, in the stock and surplus of
Restricted Subsidiaries.
"Consolidated Senior Funded Debt" means (a) all Debt evidenced by the
Notes, and (b) all other Consolidated Funded Debt ranking pari passu or senior
in right of payment with the Debt evidenced by the Notes.
"Consolidated Shareholders' Equity" means, at any time, the sum of (i)
consolidated shareholders' equity of Holdings and Restricted Subsidiaries as
would be shown on a consolidated balance sheet of Holdings and its Restricted
Subsidiaries as of such time prepared in accordance with GAAP and (ii) the cost
(to the extent incurred) of implementation by Holdings of Statement of Financial
Accounting Standard 142, to the extent not in excess of $45,000,000.
"Consolidated Total Assets" means, at any time,
(a) total assets of Holdings and its Restricted Subsidiaries
determined as of the end of the most recently ended Fiscal Year on a
consolidated basis in accordance with GAAP, minus
- 66 -
(b) to the extent included in clause (a), all amounts properly
attributable to minority interests, if any, in the stock and surplus of
such Restricted Subsidiaries.
"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); and
(e) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (d) hereof.
Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (e) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" with respect to a Series means that rate of interest
that is the greater of (i) 2% per annum above the rate of interest stated (a) in
clause (a) of the first paragraph of the Notes (in the case of the Restated
Notes) or (b) opposite the caption "INTEREST RATE" (in the case of any Shelf
Notes) or (ii) 2% over the rate of interest publicly announced by The Bank of
New York in New York, New York as its "base" or "prime" rate.
"Delayed Delivery Fee" is defined in Section 2B(8)(iii).
"Disposition Value" means, at any time, with respect to any property
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(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 Holdings, 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 Holdings.
"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 Holdings 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.
"Existing Notes" is defined in Section 1A.
"Facility" is defined in Section 2B(1).
"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).
"Fiscal Quarter" means the three month fiscal period of Holdings
beginning on each January 1, April 1, July 1 and October 1 of each year and
ending on the succeeding March 31, June 30, September 30 and December 31,
respectively.
"Fiscal Year" means the fiscal year of Holdings beginning on January 1
of each year and ending on the succeeding December 31.
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"Fixed Charges Coverage Ratio" means, at any time, the ratio of (a)
Consolidated Income Available for Fixed Charges for the period of four
consecutive fiscal quarters ending as of the most recent fiscal quarter ended
prior to such time to (b) Consolidated Fixed Charges for such period.
"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
(ii) any jurisdiction in which either Obligor or any
Restricted Subsidiary conducts all or any part of its
business, or which asserts jurisdiction over any properties of
either Obligor or any Restricted Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
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;
- 69 -
(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.
"Hedge Treasury Note(s)" means, with respect to any Accepted Note, the
United States Treasury Note or Notes whose duration (as determined by
Prudential) most closely matches the duration of such Accepted Note.
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by Holdings pursuant to Section
13.1.
"Holdings" means Lincoln Electric Holdings, Inc., an Ohio corporation.
"Hostile Tender Officer" means, with respect to the use of proceeds of
any Note, any offer to purchase, or any purchase of, shares of capital stock of
any corporation or equity interests in any other entity, or securities
convertible into or representing the beneficial ownership of, or rights to
acquire, any such shares or equity interests, if such shares, equity interests,
securities or rights are of a class which is publicly traded on any securities
exchange or in any over-the-counter market, other than purchases of such shares,
equity interests, securities or rights which, when added to shares, equity
interests, securities or rights already held by the Company and Subsidiaries,
represent less than 5% of the equity interests or beneficial ownership of such
corporation or other entity for portfolio investment purposes, and such offer or
purchase has not been duly approved by the board of directors of such
corporation or the equivalent governing body of such other entity prior to the
date on which the Company makes the Request for Purchase of such Note.
"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;
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(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (f) hereof.
"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.
"Interest Charges" means, with respect to any period, the sum (without
duplication) of the following (in each case, eliminating all offsetting debits
and credits between Holdings and its Restricted Subsidiaries and all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of Holdings and its Restricted Subsidiaries in accordance
with GAAP): (a) all interest in respect of Indebtedness of Holdings and its
Restricted Subsidiaries (including imputed interest on Capital Lease
Obligations) deducted in determining Consolidated Net Income for such period,
and (b) all debt discount and expense amortized or required to be amortized in
the determination of Consolidated Net Income for such period.
"Investment" means any investment, made in cash or by delivery of
property, by Holdings or any of its Restricted Subsidiaries (i) in any Person,
whether by acquisition of stock, indebtedness or other obligation or Security,
or by loan, Guaranty, advance, capital contribution or otherwise, or (ii) in any
property.
"Issuance Fee" is defined in Section 2B(8)(ii).
"Issuance Period" is defined in Section 2B(2).
"Lease Rentals" means, with respect to any period, the sum of the
rental and other obligations required to be paid during such period by Holdings
or any Restricted Subsidiary as lessee under all leases of real or personal
property (other than Capital Leases), excluding any amount required to be paid
by the lessee (whether or not therein designated as rental or additional rental)
on account of maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges, provided that, if at the date of determination, any
such rental or other obligations (or portion thereof) are contingent or not
otherwise definitely determinable by the terms of the related lease, the amount
of such obligations (or such portion thereof) (i) shall be assumed to be equal
to the amount of such obligations for the period of 12 consecutive calendar
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months immediately preceding the date of determination or (ii) if the related
lease was not in effect during such preceding 12-month period, shall be the
amount estimated by a Senior Financial Officer of Holdings on a reasonable basis
and in good faith.
"Leverage Ratio" means, at any time, the ratio of (a) Consolidated Debt
at such time to (b) Consolidated EBITDA for the period of four consecutive
fiscal quarters ending as of the most recent fiscal quarter ended prior to such
time.
"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 8.7.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, or properties of Holdings 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
Holdings and its Restricted Subsidiaries taken as a whole, or (b) the ability of
the Obligors to perform their obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement or the Notes.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"Notes" is defined in Section 1B.
"Officer's Certificate" of an Obligor means a certificate of a Senior
Financial Officer of such Obligor or of any other officer of such Obligor whose
responsibilities extend to the subject matter of such certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by Holdings or any ERISA Affiliate or
with respect to which Holdings or any ERISA Affiliate may have any liability.
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"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.
"Priority Debt" means the sum of (a) all Debt of the Obligors secured
by Liens, (b) all Debt of Restricted Subsidiaries (other than the Company) and
(c) all Attributable Debt of Holdings and its Restricted Subsidiaries.
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"Prudential" means The Prudential Insurance Company of America.
"Prudential Affiliate" means (i) any corporation or other entity
controlling, controlled by, or under common control with, Prudential and (ii)
any managed account or investment fund which is managed by Prudential or a
Prudential Affiliate described in clause (i) of this definition. For purposes of
this definition the terms "control", "controlling" and "controlled" shall mean
the ownership, directly or through subsidiaries, of a majority of a
corporation's or other Person's Voting Stock or equivalent voting securities or
interests.
"Purchaser" means Prudential or a Prudential Affiliate purchasing any
Notes.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Qualifying Securitization Transaction" means a bona fide
securitization transaction effected under terms and conditions customary in the
capital markets and consisting of sales of Trade Receivables by Holdings or a
Restricted Subsidiary to a Special Purpose Company which in turn either sells or
pledges such Trade Receivables (or undivided interests therein) to a commercial
paper conduit or other financing source (whether with or without recourse to the
Special Purpose Company), and as to which each of the following conditions shall
be satisfied: (i) such sales to the Special Purpose Company are not accounted
for under GAAP as secured loans, (ii) such transactions are, in the good faith
opinion of a Senior Financial Officer of Holdings, for fair value and in the
best interests of Holdings and its Restricted Subsidiaries, and (iii) recourse
to the Obligors or any Restricted Subsidiary in connection with any such sale of
Trade Receivables is limited to repurchase, substitution or indemnification
obligations customarily provided for in asset securitization transactions and
arising from breaches of representations or warranties made by Holdings or such
Restricted Subsidiary in connection with such sale.
"Related Industries" means the welding and cutting industry, including
the manufacture and sale of welding and cutting equipment and related
consumables, industrial gases and gas apparatus, laser and robotics for welding
applications, and the engineered adhesives and industrial fastener industries.
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"Required Holders" means, at any time, the holders of more than 50.0%
in principal amount of the Notes or of a Series of Notes (as applicable) at the
time outstanding (exclusive of Notes then owned by the Company or any of its
Subsidiaries or Affiliates) and, if no Notes are outstanding, means Prudential.
"Rescheduled Closing Day" is defined in Section 2B(7).
"Responsible Officer" of an Obligor means any Senior Financial Officer
of such Obligor and any other officer of such Obligor with responsibility for
the administration of the relevant portion of this agreement.
"Restated Notes" has the meaning provided in Section 1A.
"Restated Notes Closing Day" has the meaning provided in Section 3.
"Restricted Subsidiary" means at any time (1) the Company and (2) any
other Subsidiary (a) of which at least a majority (by number of votes) of the
Voting Stock is beneficially owned, directly or indirectly, by Holdings or one
or more Wholly-Owned Restricted Subsidiaries; and (b) which is (i) not
designated as an Unrestricted Subsidiary in the most recent notice, if any, with
respect thereto delivered pursuant to Section 9.8, or (ii) which is designated a
Restricted Subsidiary in the most recent notice, if any, with respect thereto
delivered pursuant to Section 9.8.
"Restricted Subsidiary Stock" means the stock (or any options or
warrants to purchase stock or other Securities exchangeable for or convertible
into stock) of any Restricted Subsidiary (other than the Company).
"Sale-and-Leaseback Transaction" means a transaction or series of
transactions pursuant to which Holdings or any Restricted Subsidiary shall sell
or transfer to any Person (other than Holdings or a Restricted Subsidiary) any
property, whether now owned or hereafter acquired, and, as part of the same
transaction or series of transactions, Holdings or any Restricted Subsidiary
shall rent or lease as lessee (other than pursuant to a Capital Lease), or
similarly acquire the right to possession or use of, such property or one or
more properties which it intends to use for the same purpose or purposes as such
property.
"SEC" means the Securities and Exchange Commission or any Governmental
Authority succeeding to any of its functions.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act.
"Senior Financial Officer" of an Obligor means the chief financial
officer, principal accounting officer, treasurer or comptroller of such Obligor.
"Series" is defined in Section 1B.
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"Shelf Notes" is defined in Section 1B.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc.
"Special Purpose Company" means any Person created in connection with a
Qualifying Securitization Transaction, provided, that any Special Purpose
Company shall not own any property or conduct any activities other than those
properties and activities which are reasonably required to be owned and
conducted in connection with the involvement of such Person in Qualifying
Securitization Transactions.
"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 or joint venture 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 Holdings.
"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.
"Trade Receivables" means indebtedness and other obligations owed to
Holdings or any Restricted Subsidiary, whether constituting accounts, chattel
paper, instruments or general intangibles, arising in connection with the sale
of goods and services by Holdings or such Restricted Subsidiary to commercial
customers, including, without limitation, the obligation to pay any finance
charges with respect thereto, and agreements relating thereto, collateral
securing the foregoing, books and records relating thereto and all proceeds
thereof.
"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
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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.
"Unrestricted Subsidiary" means any Subsidiary that is not a Restricted
Subsidiary.
"Voting Stock" means Securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"Wholly-Owned Restricted Subsidiary" means, at any time, any Restricted
Subsidiary one hundred percent (100%) of all of the equity interests (except
directors' qualifying shares) and voting interests of which are owned by any one
or more of the Obligors and Holdings' other Wholly-Owned Restricted Subsidiaries
at such time.
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