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EXHIBIT 10.1
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Robbins & Myers, Inc.
$70,000,000 6.755% Senior Notes, Series A, due May 1, 2008
and
$30,000,000 6.835% Senior Notes, Series B, due May 1, 2010
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Note Purchase Agreement
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Dated as of May 1, 1998
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Model Form No. 2 Version of September 13, 1994
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TABLE OF CONTENTS
(Not a part of the Agreement)
Section Heading Page
Section 1. Authorization of Notes 1
Section 2. Sale and Purchase of Notes 2
Section 3. Closing 2
Section 4. Conditions to Closing 2
Section 4.1. Representations and Warranties 2
Section 4.2. Performance; No Default. 3
Section 4.3. Compliance Certificates 3
Section 4.4. Opinions of Counsel 3
Section 4.5. Purchase Permitted By Applicable Law, etc 4
Section 4.6. Sale of Other Notes 4
Section 4.7. Payment of Special Counsel Fees. 4
Section 4.8. Private Placement Number 4
Section 4.9. Changes in Corporate Structure 4
Section 4.10. Guarantee Agreement 4
Section 4.11. Pledge Agreement 4
Section 4.12. Intercreditor Agreement 5
Section 4.13. Credit Agreement 5
Section 4.14. Proceedings and Documents 5
Section 5. Representations and Warranties of the Company 5
Section 5.1. Organization; Power and Authority 5
Section 5.2. Authorization, etc 5
Section 5.3. Disclosure 5
Section 5.4. Organization and Ownership of Shares of
Subsidiaries; Affiliates 6
Section 5.5. Financial Statements 7
Section 5.6. Compliance with Laws, Other Instruments, etc 7
Section 5.7. Governmental Authorizations, etc 7
Section 5.8. Litigation; Observance of Agreements,
Statutes and Orders 7
Section 5.9. Taxes 8
Section 5.10. Title to Property; Leases 8
Section 5.11. Licenses, Permits, etc 8
Section 5.12. Compliance with ERISA 8
Section 5.13. Private Offering by the Company 9
Section 5.14. Use of Proceeds; Margin Regulations 9
Section 5.15. Existing Indebtedness; Future Liens 10
Section 5.16. Foreign Assets Control Regulations, etc 10
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Section 5.17. Status under Certain Statutes 10
Section 5.18. Environmental Matters 10
Section 6. Representations of the Purchaser 11
Section 6.1. Purchase for Investment 11
Section 6.2. Source of Funds 11
Section 7. Information as to Company 13
Section 7.1. Financial and Business Information 13
Section 7.2. Officer's Certificate 15
Section 7.3. Inspection 16
Section 8. Prepayment of the Notes 16
Section 8.1. No Required Prepayments 16
Section 8.2. Optional Prepayments with Make-Whole Amount 17
Section 8.3. Allocation of Partial Prepayments 17
Section 8.4. Maturity; Surrender, etc 17
Section 8.5. Purchase of Notes 17
Section 8.6. Make-Whole Amount 18
Section 9. Affirmative Covenants 19
Section 9.1. Compliance with Law 19
Section 9.2. Insurance 19
Section 9.3. Maintenance of Properties 19
Section 9.4. Payment of Taxes and Claims 20
Section 9.5. Corporate Existence, etc 20
Section 9.6. Guarantee Agreement and Pledge Agreement 20
Section 10. Negative Covenants 21
Section 10.1. Transactions with Affiliates 21
Section 10.2. Line of Business 22
Section 10.3. Minimum Consolidated Net Worth 22
Section 10.4. Current Debt 22
Section 10.5. Restricted Subsidiary Debt 22
Section 10.6. Maintenance of Consolidated Debt 23
Section 10.7. Liens 23
Section 10.8. Mergers, Consolidations and Sales of Assets 26
Section 10.9. Restricted Payments 29
Section 10.10. Restricted Investments 29
Section 10.11. Designation of Subsidiaries 29
Section 11. Events of Default 30
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Section 12. Remedies on Default, etc 32
Section 12.1. Acceleration 32
Section 12.2. Other Remedies 33
Section 12.3. Rescission 33
Section 12.4. No Waivers or Election of Remedies,
Expenses, etc 33
Section 13. Registration; Exchange; Substitution of Notes 34
Section 13.1. Registration of Notes 34
Section 13.2. Transfer and Exchange of Notes 34
Section 13.3. Replacement of Notes 35
Section 14. Payments on Notes 35
Section 14.1. Place of Payment 35
Section 14.2. Home Office Payment 35
Section 15. Expenses, Etc 36
Section 15.1. Transaction Expenses 36
Section 15.2. Survival 36
Section 16. Survival of Representations and Warranties;
Entire Agreement 36
Section 17. Amendment and Waiver 37
Section 17.1. Requirements 37
Section 17.2. Solicitation of Holders of Notes 37
Section 17.3. Binding Effect, etc 37
Section 17.4. Notes Held by Company, etc 38
Section 18. Notices 38
Section 19. Reproduction of Documents 38
Section 20. Confidential Information 39
Section 21. Substitution of Purchaser 40
Section 22. Miscellaneous 40
Section 22.1. Successors and Assigns 40
Section 22.2. Payments Due on Non-Business Days 40
Section 22.3. Severability 40
Section 22.4. Construction 41
Section 22.5. Counterparts 41
Section 22.6. Governing Law 41
Signature 42
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Signature 1
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Schedule A - Information Relating To Purchasers
Schedule B - Defined Terms
Schedule C - Existing Investments
Schedule 4.9 - Changes in Corporate Structure
Schedule 5.3 - Disclosure Materials
Schedule 5.4 - Subsidiaries of the Company and Ownership of Subsidiary Stock
Schedule 5.5 - Financial Statements
Schedule 5.8 - Certain Litigation
Schedule 5.11 - Patents, etc.
Schedule 5.14 - Use of Proceeds
Schedule 5.15 - Existing Indebtedness
Exhibit 1A - Form of 6.755% Senior Note, Series A, due May 1, 2008
Exhibit 1B - Form of 6.835% Senior Note, Series B, due May 1, 2010
Exhibit 4.4(a) - Form of Opinion of Counsel for the Company
Exhibit 4.4(b) - Form of Opinion of Counsel for the Foreign Significant Subsidiaries
Exhibit 4.4(c) - Form of Opinion of Special Counsel for the Purchasers and the
Domestic Restricted Subsidiaries
Exhibit 4.12 - Form of Intercreditor Agreement
Exhibit 9.6(a) - Form of Guaranty Agreement
Exhibit 9.6(b) - Form of Pledge Agreement
Exhibit 10.8 - Permitted Restructuring
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Robbins & Myers, Inc.
1400 Kettering Tower
Dayton, Ohio 45423
$70,000,000 6.755% Senior Notes, Series A, due May 1, 2008
and
$30,000,000 6.835% Senior Notes, Series B, due May 1, 2010
Dated as of
May 1, 1998
To the Purchaser listed in the
attached Schedule A which
is a signatory to this Agreement:
Ladies and Gentlemen:
Robbins & Myers, Inc., an Ohio corporation (the "Company"), agrees with
you as follows:
Section 1. Authorization of Notes.
The Company will authorize the issue and sale of (i) $70,000,000
aggregate principal amount of its 6.755% Senior Notes, Series A, due May 1, 2008
(the "Series A Notes"; such term to include any notes of the same series issued
in substitution therefor pursuant to Section 13 of this Agreement or the Other
Agreements (as hereinafter defined)) and (ii) $30,000,000 aggregate principal
amount of its 6.835% Senior Notes, Series B, due May 1, 2010 (the "Series B
Notes"; such term to include any notes of the same series issued in substitution
therefor pursuant to Section 13 of this Agreement or the Other Agreements). The
Series A Notes and the Series B Notes are herein collectively referred to as the
"Notes."
The Series A Notes shall be substantially in the form set out in
Exhibit 1A, with such changes therefrom, if any, as may be approved by you and
the Company. The Series B Notes shall be substantially in the form set out in
Exhibit 1B, with such changes therefrom, if any, as may be approved by you and
the Company. Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.
The Notes will be guaranteed by each of the Guarantors and the Company
and certain Subsidiaries will execute and deliver a pledge agreement to secure
the Notes.
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Section 2. Sale and Purchase of Notes.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes of the series and in the principal amount
specified opposite your name in Schedule A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements (the "Other
Agreements"; this Agreement and the Other Agreements shall be collectively
referred to as the "Agreements") identical with this Agreement with each of the
other purchasers named in Schedule A (the "Other Purchasers"), providing for the
sale at such Closing to each of the Other Purchasers of Notes of the series and
in the principal amount specified opposite its name in Schedule A. Your
obligation hereunder, and the obligations of the Other Purchasers under the
Other Agreements, are several and not joint obligations, and you shall have no
obligation under any Other Agreement and no liability to any Person for the
performance or nonperformance by any Other Purchaser thereunder. You and the
Other Purchasers are collectively referred to as the "Purchasers."
Section 3. Closing.
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603, at 10:00 a.m., Chicago time, at a closing (the
"Closing") on May 18, 1998 or on such other Business Day thereafter on or prior
to May 20, 1998 as may be agreed upon by the Company and you and the Other
Purchasers. At the Closing, the Company will deliver to you the Notes to be
purchased by you in the form of a single Note for each series of Notes to be
purchased by you (or such greater number of Notes of each series of Notes to be
purchased by you in denominations of at least $500,000 as you may request) dated
the date of the Closing and registered in your name (or in the name of your
nominee), against delivery by you to the Company or its order of immediately
available funds in the amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company to account number
919852080 at Bank One N.A., Ohio, ABA Number 044000037. If at the Closing the
Company shall fail to tender such Notes to you as provided above in this Section
3, or any of the conditions specified in Section 4 shall not have been fulfilled
to your satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
Section 4. Conditions to Closing.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.
Section 4.2. Performance; No Default. The Company shall have performed
and complied with all agreements and conditions contained in this Agreement
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required to be performed or complied with by it prior to or at the Closing, and
after giving effect to the issue and sale of the Notes (and the application of
the proceeds thereof as contemplated by Schedule 5.14), no Default or Event of
Default shall have occurred and be continuing. Neither the Company nor any
Restricted Subsidiary shall have entered into any transaction since the date of
the Memorandum that would have been prohibited by Section 10 hereof had such
Section applied since such date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to you
an Officer's Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to
you a certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes and the Agreements.
(c) Guarantor Officer's Certificate. Each Guarantor shall have
delivered to you an Officer's Certificate, dated the date of the Closing,
certifying that the representations and warranties of such Guarantor contained
in the Guarantee Agreement are true and correct at the time of the Closing.
(d) Guarantor Secretary's Certificate. Each Guarantor shall have
delivered to you a certificate certifying as to the resolutions attached thereto
and other corporate proceedings relating to the authorization, execution and
delivery of the Guarantee Agreement.
(e) ERISA Certificate. If such Purchaser shall have made the
disclosures referred to in Section 6.2(b), (c) or (e), such Purchaser shall have
received the certificate from the Company described in the penultimate paragraph
of Section 6.2 and such certificate shall state that (1) the Company is neither
a "party in interest" nor a "disqualified person" (as defined in Section
4975(e)(2) of the Code), with respect to any plan identified pursuant to Section
6.2(b) or (e) or (2) with respect to any plan, identified pursuant to Section
6.2(c), neither the Company nor any "affiliate" (as defined in Section V(c) of
the QPAM Exemption) has, at such time or during the immediately preceding one
year, exercised the authority to appoint or terminate the QPAM as manager of the
assets of any plan identified in writing pursuant to Section 6.2(c) or to
negotiate the terms of said QPAM's management agreement on behalf of any such
identified plans.
Section 4.4. Opinions of Counsel. You shall have received opinions in
form and substance reasonably satisfactory to you, dated the date of the Closing
(a) from Thompson Hine & Flory LLP, counsel for the Company and the domestic
Restricted Subsidiaries, covering the matters set forth in Exhibit 4.4(a) and
covering such other matters incident to the transactions contemplated hereby as
you or your counsel may reasonably request (and the Company hereby instructs its
counsel to deliver such opinion to you), (b) from counsel for the foreign
Significant Subsidiaries, covering the matters set forth in Exhibit 4.4(b) and
covering such matters incident to the transactions contemplated hereby as you or
your counsel may reasonably request (and the Company hereby instructs such
counsel to deliver such opinion to you) and (c) from Chapman and Cutler, your
special counsel in connection with such transactions, substantially in the form
set forth in
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Exhibit 4.4(c) and covering such other matters incident to such transactions as
you may reasonably request.
Section 4.5. Purchase Permitted By Applicable Law, etc. On the date of
the Closing, your purchase of Notes shall (i) be permitted by the laws and
regulations of each jurisdiction to which you are subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (ii) not violate any applicable law or
regulation (including, without limitation, Regulation U, T or X of the Board of
Governors of the Federal Reserve System) and (iii) not subject you to any tax,
penalty or liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If requested by
you, you shall have received an Officer's Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine whether
such purchase is so permitted.
Section 4.6. Sale of Other Notes. Contemporaneously with the Closing,
the Company shall sell to the Other Purchasers, and the Other Purchasers shall
purchase, the Notes to be purchased by them at the Closing as specified in
Schedule A.
Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of your special counsel referred to in
Section 4.4 to the extent reflected in a statement of such counsel rendered to
the Company at least one Business Day prior to the Closing.
Section 4.8. Private Placement Number. A Private Placement number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Series A Notes and the Series B
Notes.
Section 4.9. Changes in Corporate Structure. Except as specified in
Schedule 4.9, the Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall not have
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent financial statements referred
to in Schedule 5.5.
Section 4.10. Guarantee Agreement. Each Guarantor shall have duly
executed and delivered to you the Guarantee Agreement.
Section 4.11. Pledge Agreement. The Pledge Agreement shall have been
duly executed by all of the parties thereto and delivered to you.
Section 4.12. Intercreditor Agreement. The Intercreditor Agreement
shall have been duly executed by all of the parties thereto and delivered to
you.
Section 4.13. Credit Agreement. You shall have received a copy of the
Credit Agreement together with all amendments thereto, certified as true and
correct by an authorized officer of the Company.
Section 4.14. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special counsel
shall have received all such
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counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
Section 5. Representations and Warranties of the Company.
The Company represents and warrants to you that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement, the Other
Agreements, the Notes, the Intercreditor Agreement and the Pledge Agreement and
to perform the provisions hereof and thereof.
Section 5.2. Authorization, etc. This Agreement, the Other Agreements,
the Notes, the Intercreditor Agreement and the Pledge Agreement have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note,
the Other Agreements, the Intercreditor Agreement and the Pledge Agreement will
constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with their respective terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3. Disclosure. The Company, through its agents, NationsBanc
Montgomery Securities LLC and ING Barings Furman Selz, has delivered to you and
each Other Purchaser a copy of a Private Placement Memorandum, dated March, 1998
(the "Memorandum"), relating to the transactions contemplated hereby. The
Memorandum fairly describes, in all material respects, the general nature of the
business and principal properties of the Company and its Subsidiaries. Except as
disclosed in Schedule 5.3, this Agreement, the Memorandum, the documents,
certificates or other writings delivered to you by or on behalf of the Company
in connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.5, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under
which they were made. Except as disclosed in the Memorandum or as expressly
described in Schedule 5.3, or in one of the documents, certificates or other
writings identified therein, or in the financial statements listed in Schedule
5.5, since August 31, 1997 there has been no change in the financial condition,
operations, business, properties or prospects of the Company or any Subsidiary
except changes that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
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There is no fact known to the Company that could reasonably be expected to have
a Material Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other writings delivered
to you by or on behalf of the Company specifically for use in connection with
the transactions contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) of
the Company's Affiliates, other than Subsidiaries, and (iii) of the Company's
directors and senior officers. Schedule 5.4 also identifies which Subsidiaries
are designated Restricted Subsidiaries and which Subsidiaries constitute
Significant Subsidiaries at the date of the Closing.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and clear
of any Lien (except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the Other Agreements,
the agreements listed on Schedule 5.4 and customary limitations imposed by
corporate law statutes) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to
the Company or any of its Subsidiaries that owns outstanding shares of capital
stock or similar equity interests of such Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries
listed on Schedule 5.5. All of said financial statements (including in each case
the related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case
of any interim financial statements, to normal year-end adjustments).
Section 5.6. Compliance with Laws, Other Instruments, etc. The
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execution, delivery and performance by the Company of this Agreement, the Other
Agreements, the Notes, the Intercreditor Agreement and the Pledge Agreement will
not (i) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any property of the Company or
any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Subsidiary is bound or by which the
Company or any Subsidiary or any of their respective properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement, the Other Agreements, the Notes, the
Intercreditor Agreement and the Pledge Agreement.
Section 5.8. Litigation; Observance of Agreements, Statutes and
Orders. (a) Except as disclosed in Schedule 5.8, there are no actions, suits or
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any
term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (i) the amount
of which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the
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Company and its Subsidiaries have been audited by the Internal Revenue Service
and paid for all fiscal years up to and including the fiscal year ended August
31, 1995.
Section 5.10. Title to Property; Leases. The Company and its
Subsidiaries have good and sufficient title to their respective properties that
individually or in the aggregate are Material, including all such properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.
Section 5.11. Licenses, Permits, etc. Except as disclosed in Schedule
5.11,
(a) the Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the Company
infringes in any Material respect any license, permit, franchise, authorization,
patent, copyright, service mark, trademark, trade name or other right owned by
any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its Subsidiaries
with respect to any patent, copyright, service mark, trademark, trade name or
other right owned or used by the Company or any of its Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) With respect to each of the Plans (other than Multiemployer Plans),
there is no accumulated funding deficiency, as that term is defined in Section
302(a) of ERISA and Section 412(a) of the Code. Aggregate asset and benefit
liabilities of the Plans are set forth in the Company's most recent financial
statements.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
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(d) The financial statements of the Company listed on Schedule 5.5
reflect the expected post-retirement benefit obligation of the Company and its
Subsidiaries, determined in accordance with Financial Accounting Standards Board
Statement No. 106.
(e) The execution and delivery of this Agreement and the issuance
and sale of the Notes hereunder will not involve any transaction that is subject
to the prohibitions of section 406 of ERISA or in connection with which a tax
could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The
representation by the Company in the first sentence of this Section 5.12(e) is
made in reliance upon and subject to the accuracy of your representation in
Section 6.2 as to the sources of the funds used to pay the purchase price of the
Notes to be purchased by you.
Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or the Guarantee Agreement or
any similar securities for sale to, or solicited any offer to buy any of the
same from, or otherwise approached or negotiated in respect thereof with, any
Person other than you, the Other Purchasers and not more than 100 other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take, any action that would subject the issuance or sale of the
Notes or the delivery of the Guarantee Agreement to the registration
requirements of Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will
apply the proceeds of the sale of the Notes as set forth in Schedule 5.14. No
part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 5% of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 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; Future Liens. (a) Except as
described therein, Schedule 5.15 sets forth a complete and correct list of all
outstanding Indebtedness of the Company and its Subsidiaries as of February 28,
1998, since which date there has been no Material change in the amounts,
interest rates, sinking funds, installment payments or maturities of the
Indebtedness of the Company or its Subsidiaries. Neither the Company nor any
Subsidiary is in default, and no waiver of default is currently in effect, in
the payment of any principal or interest on any Indebtedness of the Company or
such Subsidiary and no event or condition exists with respect to any
Indebtedness of the Company or any Subsidiary that would permit (or that with
notice or the lapse of time, or both, would permit) one or more Persons to cause
such Indebtedness to become due and payable before its stated maturity or before
its regularly scheduled dates of payment.
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(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 10.7.
Section 5.16. Foreign Assets Control Regulations, etc. Neither the sale
of the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
Section 5.17. Status under Certain Statutes. Neither the Company nor
any Subsidiary is subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as amended,
the ICC Termination Act of 1995, as amended, or the Federal Power Act, as
amended.
Section 5.18. Environmental Matters. Neither the Company nor any
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Company or
any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws, except, in
each case, such as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed to you in writing:
(a) neither the Company nor any Subsidiary has knowledge
of any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has
(i) stored any Hazardous Materials on real properties now or formerly
owned, leased or operated by any of them in any manner that could
reasonably be expected to result in a Material Adverse Effect or (ii)
disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in any manner that could reasonably be expected to
result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased
or operated by the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse
Effect.
Section 6. Representations of the Purchaser.
Section 6.1. Purchase for Investment. You represent that (i) you are
purchasing the Notes for your own account or for one or more separate accounts
maintained by you or for the account of one or more pension or trust funds and
not with a view to the distribution thereof, provided that the disposition of
your or their property shall at all times be within your or their control,
and (ii) you are an "accredited investor" within
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the meaning of Rule 501 of Regulation D of the Securities Act. You understand
that the Notes have not been registered under the Securities Act and may be
resold only if registered pursuant to the provisions of the Securities Act or
if an exemption from registration is available, except under circumstances
where neither such registration nor such an exemption is required by law, and
that the Company is not required to register the Notes.
Section 6.2. Source of Funds. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"Source") to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
(a) 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 your state of domicile; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
to the Company in writing pursuant to this paragraph (b), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part l(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a Person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment
fund have been disclosed to the Company in writing pursuant to this
paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate
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account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
If any Purchaser or any subsequent transferee of the Notes indicates
that such Purchaser or such transferee is relying on any representation
contained in paragraph (b), (c) or (e) above, the Company shall deliver on the
date of the Closing or on the date of transfer, as applicable, a certificate,
which shall state whether (i) it is a party in interest or a "disqualified
person" (as defined in Section 4975(e)(2) of the Internal Revenue Code of 1986,
as amended), with respect to any plan identified pursuant to paragraphs (b) or
(e) above, or (ii) with respect to any plan, identified pursuant to paragraph
(c) above, whether it or any "affiliate" (as defined in Section V(c) of the QPAM
Exemption) has at such time, and during the immediately preceding one year,
exercised the authority to appoint or terminate the QPAM as manager of any plan
identified in writing pursuant to paragraph (c) above or to negotiate the terms
of said QPAM's management agreement on behalf of any such identified plan.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
Section 7. Information as to Company.
Section 7.1. Financial and Business Information. The Company shall
deliver to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements - within 60 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of:
(i) a consolidated balance sheet of the Company and
its Restricted Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Restricted Subsidiaries for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal
year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that, if the Company's Quarterly Report on Form
10-Q provides the information described in clauses (i) and (ii) of this
Section 7.1(a) with respect to the Company and its Restricted
Subsidiaries as a group, delivery within the time period specified
above of copies of the Company's Quarterly Report on Form 10-Q prepared
in compliance with the requirements therefor and filed with the
Securities and
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Exchange Commission shall be deemed to satisfy the requirements of this
Section 7.1(a);
(b) Annual Statements - within 105 days after the end of each fiscal
year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Restricted Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its Restricted
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied
(A) by an opinion thereon of independent
certified public accountants of recognized national standing,
which opinion shall state that such financial statements
present fairly, in all material respects, the financial
position of the companies being reported upon and their
results of operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has
been made in accordance with generally accepted auditing
standards, and that such audit provides a reasonable basis for
such opinion in the circumstances, and
(B) for any fiscal year in which the Company is
not subject to the reporting requirements of the Exchange Act,
a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making
their audit, they have become aware of any condition or event
that then constitutes a Default or an Event of Default, and,
if they are aware that any such condition or event then
exists, specifying the nature and period of the existence
thereof (it being understood that such accountants shall not
be liable, directly or indirectly, for any failure to obtain
knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in making
an audit in accordance with generally accepted auditing
standards or did not make such an audit),
provided that, if the Company's Annual Report on Form 10-K provides the
information described in clauses (i) and (ii) of this Section 7.1(b)
with respect to the Company and its Restricted Subsidiaries as a group,
the delivery within the time period specified above of the Company's
Annual Report on Form 10-K for such fiscal year (together with the
Company's annual report to shareholders, if any, prepared pursuant to
Rule 14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section
7.1(b);
(c) SEC and Other Reports - promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as
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expressly requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary with the
Securities and Exchange Commission and of all press releases and other
statements made available generally by the Company or any Subsidiary to
the public concerning developments that are Material;
(d) Notice of Default or Event of Default - promptly, and
in any event within five Business Days after a Responsible Officer
becoming aware of the existence of any Default or Event of Default or
that any Person has given any notice or taken any action with respect
to a claimed default hereunder or that any Person has given any notice
or taken any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the nature
and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;
(e) ERISA Matters - promptly, and in any event within five
Business Days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(i) with respect to any Plan, any reportable
event, as defined in section 4043(b) of ERISA and the
regulations thereunder, for which notice thereof has not been
waived pursuant to such regulations as in effect on the date
hereof; or
(ii) the taking by the PBGC of steps to
institute, or the threatening by the PBGC of the institution
of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer,
any Plan, or the receipt by the Company or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action has
been taken by the PBGC with respect to such Multiemployer
Plan; or
(iii) any event, transaction or condition that
could result in the incurrence of any liability by the Company
or any ERISA Affiliate pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(f) Notices from Governmental Authority - promptly, and in
any event within 30 days of receipt thereof, copies of any notice to
the Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect; and
(g) Requested Information - with reasonable promptness,
such other data and information relating to the business, operations,
affairs, financial condition,
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assets or properties of the Company or any of its Subsidiaries or
relating to the ability of the Company to perform its obligations
hereunder and under the Notes as from time to time may be reasonably
requested by any such holder of Notes.
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance - the information (including
detailed calculations) required in order to establish whether the
Company was in compliance with the requirements of Section 10.3 through
Section 10.10 hereof, inclusive, during the quarterly or annual period
covered by the statements then being furnished (including with respect
to each such Section, where applicable, the calculations of the maximum
or minimum amount, ratio or percentage, as the case may be, permissible
under the terms of such Sections, and the calculation of the amount,
ratio or percentage then in existence); and
(b) Event of Default - a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company
or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives
of each holder of Notes that is an Institutional Investor:
(a) No Default - if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in
writing; and
(b) Default - if a Default or Event of Default then
exists, at the expense of the Company, to visit and inspect any of the
offices or properties of the Company or any Subsidiary, to examine all
their respective books of account, records, reports and other papers,
to make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and
independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and
accounts of the Company and its
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Subsidiaries), all at such reasonable times and as often as may be
requested.
Section 8. Prepayment of the Notes.
Section 8.1. No Required Prepayments. Except as provided in Section
8.2, the Company may not prepay the Notes of either series prior to their
respective expressed maturity date. The entire unpaid principal amount of the
Series A Notes shall become due and payable on May 1, 2008. The entire unpaid
principal amount of the Series B Notes shall become due and payable on May 1,
2010.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, in an amount not less than 5% of the
aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, plus the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount, together with interest on such principal amount accrued to the
date of prepayment. The Company will give each holder of Notes written notice of
each optional prepayment under this Section 8.2 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each such notice
shall specify such date, the aggregate principal amount of the Notes of each
series to be prepaid on such date (determined in accordance with Section 8.3),
the principal amount of each Note held by such holder to be prepaid (determined
in accordance with Section 8.3), and the interest to be paid on the prepayment
date with respect to such principal amount being prepaid, and shall be
accompanied by a certificate of a Senior Financial Officer as to the estimated
Make-Whole Amount due with respect to each series of Notes in connection with
such prepayment (calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation. Two Business Days
prior to such prepayment, the Company shall deliver to each holder of Notes a
certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
Section 8.3. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes, the principal amount of the Notes to be prepaid
shall be allocated (i) among both of the series of Notes at the time outstanding
in proportion, as nearly as practicable, to the respective unpaid principal
amounts of each series of Notes and (ii) among all of the Notes of a given
series at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment.
Section 8.4. Maturity; Surrender, etc. In the case of each prepayment
of Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid
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principal amount of any Note.
Section 8.5. Purchase of Notes. The Company will not and will not
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Notes of either series except upon the
payment or prepayment of the Notes in accordance with the terms of this
Agreement and the Notes. The Company will promptly cancel all Notes acquired by
it or any Affiliate pursuant to any payment, prepayment or purchase of Notes
pursuant to any provision of this Agreement and no Notes may be issued in
substitution or exchange for any such Notes.
Section 8.6. Make-Whole Amount. The term "Make-Whole Amount" means,
with respect to any Note of either series, an amount equal to the excess, if
any, of the Discounted Value of the Remaining Scheduled Payments with respect to
the Called Principal of such Note over the amount of such Called Principal,
provided that the Make-Whole Amount may in no event be less than zero. For the
purposes of determining the Make-Whole Amount, the following terms have the
following meanings:
"Called Principal" means, with respect to any Note of either
series, the principal of such Note that is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal
of any Note of either series, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called Principal from
their respective scheduled due dates to the Settlement Date with
respect to such Called Principal, in accordance with accepted financial
practice and at a discount factor (applied on the same periodic basis
as that on which interest on the Notes of such series is payable) equal
to the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of any Note of either series, 0.5% over the yield to maturity
implied by (i) the yields reported, as of 10:00 A.M. (New York City
time) on the second Business Day preceding the Settlement Date with
respect to such Called Principal, on the display designated as "Page
USD" of the Bloomberg Financial Markets Services Screen (or such other
display as may replace "Page USD" of the Bloomberg Financial Markets
Services Screen) for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date, or (ii) if such yields are not reported as
of such time or the yields reported as of such time are not
ascertainable, the Treasury Constant Maturity Series Yields reported,
for the latest day for which such yields have been so reported as of
the second Business Day preceding the Settlement Date with respect to
such Called Principal, in Federal Reserve Statistical Release H.15(519)
(or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date. Such
implied yield will be determined, if necessary, by (a) converting U.S.
Treasury bill quotations to bond-equivalent yields in accordance with
accepted financial practice and (b) interpolating linearly between
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(1) the actively traded U.S. Treasury security with the maturity
closest to and greater than the Remaining Average Life and (2) the
actively traded U.S. Treasury security with the maturity closest to and
less than the Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of any Note of either series, all payments of such
Called Principal and interest thereon that would be due after the
Settlement Date with respect to such Called Principal if no payment of
such Called Principal were made prior to its scheduled due date,
provided that if such Settlement Date is not a date on which interest
payments are due to be made under the terms of the Notes, then the
amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2 or
12.1.
"Settlement Date" means, with respect to the Called Principal
of any Note of either series, the date on which such Called Principal
is to be prepaid pursuant to Section 8.2 or has become or is declared
to be immediately due and payable pursuant to Section 12.1, as the
context requires.
Section 9. Affirmative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will and will cause each
of its Subsidiaries to comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Section 9.2. Insurance. The Company will and will cause each of its
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
Section 9.3. Maintenance of Properties. The Company will and will
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cause each of its Subsidiaries to maintain and keep, or cause to be maintained
and kept, their respective properties in good repair, working order and
condition (other than ordinary wear and tear), so that the business carried on
in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Subsidiary from discontinuing
the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will and will
cause each of its Subsidiaries to file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Company
or any Subsidiary, provided that neither the Company nor any Subsidiary need pay
any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary or (ii) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be expected to have
a Material Adverse Effect.
Section 9.5. Corporate Existence, etc. Subject to Section 10.8, the
Company will at all times preserve and keep in full force and effect its
corporate existence. Subject to Section 10.8, the Company will at all times
preserve and keep in full force and effect the corporate existence of each of
its Restricted Subsidiaries (unless merged into the Company or a Wholly-Owned
Restricted Subsidiary) and all rights and franchises of the Company and its
Restricted Subsidiaries unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.
Section 9.6. Guarantee Agreement and Pledge Agreement. (a) The Company
will cause each of the Guarantors to execute and deliver to each holder of
Notes, at the Closing, the guarantee agreement in the form attached hereto as
Exhibit 9.6(a) (the "Guarantee Agreement"). The Company will cause each
Subsidiary that provides a Guaranty supporting any Debt outstanding under the
Credit Agreement at any time after the Closing to execute and deliver to each
holder of Notes, concurrently with the execution and delivery of such Guaranty,
a supplemental agreement in the form attached to the Intercreditor Agreement (a
"Supplemental Agreement") pursuant to which such Subsidiary shall become a
Guarantor under the Guarantee Agreement and a party to the Intercreditor
Agreement. Notwithstanding the foregoing, you hereby agree that the Guarantee
Agreement shall be released upon your receipt of written evidence, satisfactory
in form and substance to you and your counsel, that no Debt outstanding under
the Credit
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Agreement is supported by any Guaranty from any Subsidiary. In the
event that the Guarantee Agreement is so released and any Debt outstanding under
the Credit Agreement is thereafter supported by any Guaranty from any
Subsidiary, the Company will, concurrently therewith, (i) cause each of its
Subsidiaries that executed and delivered a Guaranty supporting such Debt
outstanding under the Credit Agreement to execute and deliver to each holder of
Notes a new Guarantee Agreement substantially in the form attached hereto as
Exhibit 9.6(a) and (ii) execute and deliver and cause each such Subsidiary to
execute and deliver a new Intercreditor Agreement substantially in the form
attached hereto as Exhibit 4.12.
(b) The Company will execute and deliver to each holder of Notes,
at the Closing, the pledge agreement in the form attached hereto as Exhibit
9.6(b) (the "Pledge Agreement") pursuant to which the Company pledges its
ownership of the capital stock and intercompany notes of certain of its
Subsidiaries as set forth in Schedule 2 to the Pledge Agreement for the benefit
of the holders of the Notes. The Company will cause each Guarantor to execute
and deliver to each holder of Notes, at the Closing, the Pledge Agreement
pursuant to which each such Guarantor pledges its ownership of the capital stock
and intercompany notes of certain Subsidiaries of the Company as set forth in
Schedule 2 to the Pledge Agreement for the benefit of the holders of the Notes.
The Company will cause each Subsidiary that pledges any of its assets for the
benefit of any Debt outstanding under the Credit Agreement at any time after the
Closing to execute and deliver a Supplemental Agreement pursuant to which such
Subsidiary shall become a party to the Pledge Agreement and the Intercreditor
Agreement, in each case providing to the holders of the Notes an equal and
ratable pledge of the same assets that have been pledged to support such Debt
outstanding under the Credit Agreement. Notwithstanding the foregoing, you
hereby agree that the Pledge Agreement shall be released upon your receipt of
written evidence, satisfactory in form and substance to you and your counsel,
that no Debt outstanding under the Credit Agreement is supported by any pledge
of assets from the Company or any Subsidiary. In the event that the Pledge
Agreement is so released and any Debt outstanding under the Credit Agreement is
thereafter supported by any pledge of assets from the Company or any Subsidiary,
the Company will, concurrently therewith, (i) execute and deliver to each holder
of Notes a new Pledge Agreement substantially in the form attached hereto as
Exhibit 9.6(b) and will cause each such Subsidiary that executed and delivered a
pledge of the assets supporting such Debt outstanding under the Credit Agreement
to execute and deliver to each holder of Notes a new Pledge Agreement
substantially in the form attached hereto as Exhibit 9.6(b), in each case
providing to the holders of the Notes an equal and ratable pledge of the same
assets that have been pledged to support such Debt outstanding under the Credit
Agreement, and (ii) execute and deliver and cause each such Subsidiary to
execute and deliver a new Intercreditor Agreement substantially in the form
attached hereto as Exhibit 4.12.
Section 10. Negative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Transactions with Affiliates. The Company will not and
will not permit any Restricted Subsidiary to enter into directly or indirectly
any transaction
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or Material group of related transactions (including without limitation the
purchase, lease, sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate (other than the Company or another Restricted
Subsidiary), except in the ordinary course and pursuant to the reasonable
requirements of the Company's or such Restricted Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Restricted
Subsidiary than would be obtainable in a comparable arm's-length transaction
with a Person not an Affiliate.
Section 10.2. Line of Business. The Company will
not, and will not permit any of its Restricted Subsidiaries to, engage in any
business if, as a result, the general nature of the business in which the
Company and its Restricted Subsidiaries, taken as a whole, would then be engaged
would be substantially changed from the general nature of the business in which
the Company and its Restricted Subsidiaries, taken as a whole, are engaged on
the date of this Agreement as described in the Memorandum.
Section 10.3. Minimum Consolidated Net Worth.
The Company will not, at any time, permit Consolidated Net Worth to be less than
the sum of (a) $100,000,000, plus (b) an aggregate amount equal to 50% of its
Consolidated Net Income (but, in each case, only if a positive number) for each
completed fiscal year beginning with the fiscal year ended August 31, 1998, plus
(c) from and after the date of any conversion to equity of the Debentures in
accordance with the terms thereof, an aggregate amount equal to 80% of the book
value of the increase in the capital and surplus of the Company resulting from
such conversion of the Debentures.
Section 10.4. Current Debt. The Company will not at
any time permit any Consolidated Current Debt to be outstanding unless there
shall have been during the immediately preceding 365 days a period of at least
30 consecutive days on each of which the ratio of (i) the sum of (A)
Consolidated Current Debt plus (B) Consolidated Senior Funded Debt to (ii) the
sum of (A) Consolidated Capitalization plus (B) Consolidated Current Debt shall
not have exceeded 0.6 to 1.
Section 10.5. Restricted Subsidiary Debt. The
Company will not at any time permit any Restricted Subsidiary to, directly or
indirectly, create, incur, assume, guarantee, have outstanding, or otherwise
become or remain directly or indirectly liable with respect to, any Debt,
except:
(a) Debt of a Restricted Subsidiary owed to the
Company or to a Wholly-Owned Restricted Subsidiary;
(b) Debt of a Restricted Subsidiary outstanding on the
date hereof and disclosed in Schedule 5.15 hereto and Debt of a
Restricted Subsidiary incurred under the Credit Agreement and any
extension, renewal or refunding thereof, provided that, in the case of
any such extension, renewal or refunding, (i) the principal amount of
Debt immediately prior to such extension, renewal or refunding is not
increased and (ii) immediately after such extension, renewal or
refunding, no Default or Event of Default shall exist;
(c) Debt of a Restricted Subsidiary secured by Liens
permitted by Section 10.7(f);
(d) Debt of a Restricted Subsidiary outstanding at the
time such
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Restricted Subsidiary becomes a Subsidiary and any extension, renewal
or refunding thereof, provided that (i) such Debt shall not have been
incurred in contemplation of such Restricted Subsidiary becoming a
Restricted Subsidiary and (ii) immediately after such Restricted
Subsidiary becomes a Restricted Subsidiary, no Default or Event of
Default shall exist, and provided, further, that, in the case of any
extension, renewal or refunding of any such Debt, (i) the principal
amount of Debt immediately prior to such extension, renewal or
refunding is not increased and (ii) immediately after such extension,
renewal or refunding, no Default or Event of Default shall exist;
(e) Debt of any Restricted Subsidiary incorporated in a
jurisdiction other than the United States or any State thereof that (i)
does not exceed, for all such Restricted Subsidiaries on a collective
basis, $50,000,000 in the aggregate, (ii) is collateralized by one or
more letters of credit which constitute Indebtedness of the Company,
and (iii) is unsecured (other than by the letters of credit described
in clause (ii)); and
(f) Debt of a Restricted Subsidiary in addition to that
otherwise permitted by the foregoing provisions of this Section 10.5,
provided that (i) on the date the Restricted Subsidiary incurs or
otherwise becomes liable with respect to any such additional Debt and
immediately after giving effect thereto and to the concurrent
retirement of any other Debt, no Default or Event of Default shall
exist and (ii) the total amount of all Debt of the Company or any
Restricted Subsidiary secured by Liens permitted by Section 10.7(i)
plus all Debt of Restricted Subsidiaries incurred pursuant to this
Section 10.5(f) shall not at any time exceed 20% of Consolidated Net
Worth.
For the purposes of this Section 10.5, any Person becoming a Restricted
Subsidiary after the date hereof shall be deemed, at the time it becomes a
Restricted Subsidiary, to have incurred all of its then outstanding Debt.
Section 10.6. Maintenance of Consolidated Debt. (a) The Company will
not at any time permit the ratio of Consolidated Senior Funded Debt to
Consolidated Capitalization to exceed 0.6 to 1.
(b) The Company will not permit the ratio of Consolidated Funded Debt
to Consolidated Capitalization to exceed (i) 0.75 to 1 at any time prior to the
earlier of (y) the conversion to equity of the Debentures in accordance with the
terms thereof and (z) the redemption by the Company of the Debentures in
accordance with the Indenture and (ii) 0.65 to 1 at any time thereafter.
Section 10.7. Liens. The Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly create, incur, assume or
permit to exist (upon the happening of a contingency or otherwise) any Lien on
or with respect to any property or asset (including, without limitation, any
document or instrument in respect of goods or accounts receivable) of the
Company or any such Restricted Subsidiary, whether now owned or held or
hereafter acquired, or any income or profits therefrom (whether or not provision
is made for the equal and ratable securing of the Notes in accordance with the
last paragraph of this Section 10.7), or assign or otherwise convey any right to
receive
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income or profits, except:
(a) Liens for property taxes and assessments or
governmental charges or levies and Liens securing claims or demands of
mechanics and materialmen which are being contested in good faith or
are not yet due and payable or the payment of which is not at the time
required by Section 9.4;
(b) Liens of or resulting from any judgment or award, the
time for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Restricted Subsidiary
shall at such time in good faith be prosecuting an appeal or proceeding
for a review and in respect of which a stay of execution pending such
appeal or proceeding for review shall have been secured;
(c) Liens (other than any Lien imposed by ERISA) incurred
or deposits made in the ordinary course of business (i) in connection
with workers' compensation, unemployment insurance and other types of
social security or retirement benefits, or (ii) to secure (or to obtain
letters of credit that secure) the performance of tenders, statutory
obligations, surety bonds, appeal bonds, bids, leases (other than
Capital Leases), performance bonds, purchase, construction or sales
contracts and other similar obligations, in each case not incurred or
made in connection with the borrowing of money, the obtaining of
advances or credit or the payment of the deferred purchase price of
property;
(d) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-of-way,
utilities and other similar purposes, or zoning or other restrictions
as to the use of real properties arising in the ordinary course of
business and not in connection with the borrowing of money, which are
necessary for the conduct of the activities of the Company and its
Restricted Subsidiaries or which customarily exist on properties of
corporations engaged in similar activities and similarly situated and
which do not in any event materially impair their use in the operation
of the business of the Company and its Restricted Subsidiaries or
materially detract from the value of such property;
(e) Liens existing on the date of this Agreement and
securing the Debt of the Company and its Restricted Subsidiaries
referred to in item 1a of Schedule 5.15 and Liens, subject to the
Intercreditor Agreement, securing the Notes and Debt of the Company and
its Restricted Subsidiaries incurred under the Credit Agreement;
(f) any Lien created to secure all or any part of the
purchase price, or to secure Debt incurred or assumed to pay all or any
part of the purchase price or cost of construction, of property (or any
improvement thereon) acquired or constructed by the Company or a
Restricted Subsidiary after the date of the Closing, provided that
(i) any such Lien shall extend solely to the item
or items of such property (or improvement thereon) so acquired
or constructed and, if required by the terms of the instrument
originally creating such Lien, other property (or improvement
thereon) which is an improvement to or is acquired for
specific use in connection with such acquired or constructed
property (or improvement thereon) or which is real property
being improved by such
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acquired or constructed property (or improvement thereon),
(ii) the principal amount of the Debt secured by
any such Lien shall at no time exceed the cost to the Company
or such Restricted Subsidiary of the property (or improvement
thereon) so acquired or constructed, and
(iii) any such Lien shall be created
contemporaneously with, or within 180 days after, the
acquisition or construction of such property, provided that,
in the case of the construction or acquisition of improvements
to real property, the land on which such improvements are
located shall not be required to have been acquired within
such 180-day period;
(g) any Lien existing on property of a Person immediately
prior to its being consolidated with or merged into the Company or a
Restricted Subsidiary or its becoming a Subsidiary, or any Lien
existing on any property acquired by the Company or any Restricted
Subsidiary at the time such property is so acquired (whether or not the
Debt secured thereby shall have been assumed), provided that (i) no
such Lien shall have been created or assumed in contemplation of such
consolidation or merger or such Person's becoming a Restricted
Subsidiary or such acquisition of property, and (ii) each such Lien
shall extend solely to the item or items of property so acquired and,
if required by the terms of the instrument originally creating such
Lien, other property which is an improvement to or is acquired for
specific use in connection with such acquired property;
(h) Liens on property or assets of any of the Restricted
Subsidiaries securing Debt owing to the Company or to a Wholly-Owned
Restricted Subsidiary; and
(i) other Liens not otherwise permitted by paragraphs (a)
through (h) of this Section 10.7, securing Debt of the Company or any
Restricted Subsidiary, provided that the total amount of all Debt of
the Company or any Restricted Subsidiary secured by Liens permitted by
this paragraph (i) plus all Debt of Restricted Subsidiaries incurred
pursuant to Section 10.5(f) hereof shall not at any time exceed 20% of
Consolidated Net Worth.
If, notwithstanding the prohibition contained herein, the Company
shall, or shall permit any of its Restricted Subsidiaries 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 (i) 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 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.
For the purposes of this Section 10.7, any Person becoming a Restricted
Subsidiary after the date of this Agreement shall be deemed to have incurred all
of its then
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outstanding Liens at the time it becomes a Restricted Subsidiary, and any Person
extending, renewing or refunding any Debt secured by any Lien shall be deemed to
have incurred such Lien at the time of such extension, renewal or refunding.
Section 10.8. Mergers, Consolidations and Sales of Assets. (a) The
Company will not, and will not permit any Restricted Subsidiary to, (i)
consolidate with or be a party to a merger with any other corporation or (ii)
sell, lease or otherwise dispose of all or any substantial part (as defined in
paragraph (d) of this Section 10.8) of the assets of the Company and its
Restricted Subsidiaries; provided, however, that:
(A) any Restricted Subsidiary may merge or consolidate
with or into the Company or any Wholly-Owned Restricted Subsidiary so
long as in any merger or consolidation involving the Company, the
Company shall be the surviving or continuing corporation;
(B) the Company may consolidate or merge with any other
corporation if (i) the surviving or continuing corporation shall be a
solvent corporation organized and existing under the laws of the United
States of America, any State thereof or the District of Columbia, (ii)
such surviving or continuing corporation (if other than the Company)
shall have (y) executed and delivered to each holder of the Notes its
assumption of the due and punctual performance and observance of each
covenant and condition of this Agreement, the Other Agreements, the
Intercreditor Agreement, the Pledge Agreement and the Notes (pursuant
to such agreements and instruments as shall be reasonably satisfactory
to the Required Holders) and (z) caused each Guarantor to reaffirm the
Guarantee Agreement in writing, (iii) prior to the consummation of any
such consolidation or merger in which the Company shall not be the
surviving corporation, the Company shall have caused to be delivered to
each holder of the Notes an opinion of nationally recognized
independent counsel, or other independent counsel reasonably
satisfactory to the Required Holders, to the effect that all agreements
or instruments effecting such assumption are enforceable in accordance
with their terms and comply with the terms hereof, and (iv) at the time
of such consolidation or merger and after giving effect thereto, no
Default or Event of Default shall exist;
(C) any Restricted Subsidiary may sell, lease or otherwise
dispose of all or any substantial part of its assets to the Company or
any Wholly-Owned Restricted Subsidiary; and
(D) the Company may consummate the transactions described
in Exhibit 10.8 attached hereto.
(b) The Company will not permit any Restricted Subsidiary to issue or
sell any shares of stock of any class (including as "stock" for the purposes of
this Section 10.8, any warrants, rights or options to purchase or otherwise
acquire stock or other securities exchangeable for or convertible into stock) of
such Restricted Subsidiary to any Person other than the Company or another
Restricted Subsidiary, except for the purpose of qualifying directors, or except
in satisfaction of the validly pre-existing preemptive rights of minority
shareholders in connection with the simultaneous issuance of stock to the
Company and/or a Restricted Subsidiary whereby the Company and/or such
Restricted
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Subsidiary maintain their same proportionate interest in such
Restricted Subsidiary.
(c) The Company will not sell, transfer or otherwise dispose of
any shares of stock of any Restricted Subsidiary (except to qualify directors)
or any Debt of any Restricted Subsidiary, and will not permit any Restricted
Subsidiary to sell, transfer or otherwise dispose of (except to the Company or a
Wholly-Owned Restricted Subsidiary) any shares of stock or any Debt of any other
Restricted Subsidiary, unless:
(A) simultaneously with such sale, transfer, or
disposition, all shares of stock and all Debt of such Restricted
Subsidiary at the time owned by the Company and by every other
Subsidiary shall be sold, transferred or disposed of as an entirety;
(B) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the proposed
sale, transfer or disposition of said shares of stock and Debt is in
the best interests of the Company;
(C) said shares of stock and Debt are sold, transferred or
otherwise disposed of to a Person, for a cash consideration and on
terms reasonably deemed by the Board of Directors to be adequate and
satisfactory;
(D) the Restricted Subsidiary being disposed of shall not
have any continuing Investment in the Company or any other Restricted
Subsidiary not being simultaneously disposed of; and
(E) such sale or other disposition does not involve a
substantial part (as hereinafter defined) of the assets of the Company
and its Restricted Subsidiaries.
(d) As used in this Section 10.8, a sale, lease or other
disposition of assets shall be deemed to be a "substantial part" of the assets
of the Company and its Restricted Subsidiaries if (i) the book value of such
assets, when added to the book value of all other assets sold, leased or
otherwise disposed of by the Company and its Restricted Subsidiaries (other than
in the ordinary course of business) during the fiscal year in which such sale,
lease or other disposition occurs, exceeds 15% of Consolidated Net Assets,
determined as of the end of the immediately preceding fiscal year, or (ii) the
consolidated operating income generated from the use and operation of such
assets, when added to the consolidated operating income generated from all other
assets sold, leased or otherwise disposed of by the Company and its Restricted
Subsidiaries (other than in the ordinary course of business) during the fiscal
year in which such sale, lease or other disposition occurs, exceeds 15% of
consolidated operating income, determined as of the end of the immediately
preceding fiscal year. So much of the Net Proceeds Amount for any sale, lease or
other disposition of assets as shall have been applied to a Debt Prepayment
Application or a Property Reinvestment Application within six months prior to or
12 months after the consummation of such sale, lease or other disposition shall
be deducted from any calculation of "substantial part" as of a date on or after
the Net Proceeds Amount is so applied. For purposes of any calculation of
"substantial part":
(A) "Debt Prepayment Application" means, with respect to
any sale, lease or disposition, the application by the Company or its
Restricted Subsidiaries of cash in an amount up to the Net Proceeds
Amount with respect to such sale, lease or disposition to pay Senior
Debt of the Company or any of its Restricted
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Subsidiaries (other than Senior Debt owing to the Company, any of its
Subsidiaries or any Affiliate); provided that, with respect to any Debt
Prepayment Application made at a time when a Default or Event of
Default shall exist, in the course of making such application the
Company shall prepay each outstanding Note in accordance with Section
8.2 in a principal amount which, when added to the Make-Whole Amount
applicable thereto, equals the Ratable Portion for such Note. As used
in this definition, "Ratable Portion" for any Note means an amount
equal to the product of (x) the Net Proceeds Amount being so applied to
the payment of Senior Debt multiplied by (y) a fraction the numerator
of which is the outstanding principal amount of such Note and the
denominator of which is the aggregate principal amount of Senior Debt
of the Company and its Restricted Subsidiaries (other than Senior Debt
owing to the Company, any of its Subsidiaries or any Affiliate).
(B) "Net Proceeds Amount" means, with respect to any sale,
lease or other disposition of any property by any Person, an amount
equal to the difference of
(i) the aggregate amount of the consideration
(valued at the Fair Market Value of such consideration at the
time of the consummation of such sale, lease or other
disposition) received by such Person in respect of such sale,
lease or other disposition, minus
(ii) (x) the amount of any Indebtedness of such
Person secured by such Property which is required to be repaid
upon such sale, lease or other disposition, (y) all ordinary
and reasonable out-of-pocket costs and expenses actually
incurred by such Person in connection with such sale, lease or
other disposition, including without limitation sales and
other commissions and legal expenses, and (z) taxes reasonably
estimated to be payable with respect to any gain in connection
with such sale, lease or other disposition.
(C) "Property Reinvestment Application" means the
application of an amount up to the Net Proceeds Amount with respect to
such sale, lease or other disposition to the acquisition by the Company
or any Restricted Subsidiary of operating assets of the Company or any
Restricted Subsidiary to be used in the business of such Person,
provided that no such operating asset shall at any time be subject to a
Lien of the type permitted by Section 10.7(f) or a Capital Lease unless
such Net Proceeds Amount is attributable to the sale, lease or other
disposition of property which was itself subject to such a Lien.
Section 10.9. Restricted Payments.
(a) Limitation. The Company will not, and will not permit any of
its Restricted Subsidiaries to, at any time, declare or make, or incur any
liability to declare or make, any Restricted Payment unless immediately after
giving effect to such action no Default or Event of Default would exist.
(b) Time of Payment. The Company will not, nor will it permit any
of its Restricted Subsidiaries to, authorize a Restricted Payment that is not
payable within 100 days of authorization.
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Section 10.10. Restricted Investments.
(a) Limitation. The Company will not, and will not permit any of
its Restricted Subsidiaries to, declare, make or authorize any Restricted
Investment unless immediately after giving effect to such action no Default or
Event of Default would exist.
(b) Investments of Restricted Subsidiaries. Each Person which
becomes a Restricted Subsidiary of the Company after the date of the Closing
will be deemed to have made, on the date such Person becomes a Restricted
Subsidiary of the Company, all Restricted Investments of such Person in
existence on such date. Investments in any Person that ceases to be a Restricted
Subsidiary of the Company after the date of the Closing (but in which the
Company or another Restricted Subsidiary continues to maintain an Investment)
will be deemed to have been made on the date on which such Person ceases to be a
Restricted Subsidiary of the Company.
Section 10.11. Designation of Subsidiaries. The
Company may designate any Subsidiary to be an Unrestricted Subsidiary and may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary by giving
written notice to each holder of Notes that the Board of Directors of the
Company has made such designation, provided, however, that no Subsidiary may be
designated an Unrestricted Subsidiary and no Unrestricted Subsidiary may be
designated a Restricted Subsidiary unless, at the time of such action and after
giving effect thereto, (i) solely in the case of a Restricted Subsidiary being
designated an Unrestricted Subsidiary, (A) such Restricted Subsidiary being
designated an Unrestricted Subsidiary shall not have any continuing Investment
in the Company or any Restricted Subsidiary and (B) such designation is treated
as a sale of assets subject to the provisions of Section 10.8 and (ii) no
Default or Event of Default shall exist. Any Restricted Subsidiary which has
been designated an Unrestricted Subsidiary and which has then been designated a
Restricted Subsidiary again, in each case in accordance with the provisions of
the first sentence of this Section 10.11 shall not at any time thereafter be an
Unrestricted Subsidiary. Any Unrestricted Subsidiary which has been designated a
Restricted Subsidiary and which has then been designated an Unrestricted
Subsidiary again, in each case in accordance with the provisions of the first
sentence of this Section 10.11 shall not at any time thereafter be a Restricted
Subsidiary. Section 11. Events of Default.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any principal
or Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on
any Note for more than five Business Days after the same becomes due
and payable; or
(c) the Company defaults in the performance of or
compliance with any term contained in Sections 10.3 through 10.11,
inclusive; or
(d) the Company defaults in the performance of or
compliance with any term contained herein (other than those referred to
in paragraphs (a), (b) and (c) of this Section 11) or in the Pledge
Agreement and such default is not remedied within
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30 days after the earlier of (i) a Responsible Officer obtaining actual
knowledge of such default and (ii) the Company receiving written notice
of such default from any holder of a Note (any such written notice to
be identified as a "notice of default" and to refer specifically to
this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or
on behalf of the Company or any Guarantor or by any officer of the
Company or any Guarantor in this Agreement, the Guarantee Agreement,
the Pledge 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) the Company or any Restricted Subsidiary is in
default (as principal or as guarantor or other surety) in the payment
of any principal of or premium or make-whole amount or interest on any
Indebtedness that is outstanding in an aggregate principal amount of at
least $5,000,000 beyond any period of grace provided with respect
thereto, or (ii) the Company or any Restricted Subsidiary is in default
in the performance of or compliance with any term of any evidence of
any Indebtedness in an aggregate outstanding principal amount of at
least $5,000,000 or of any mortgage, indenture or other agreement
relating thereto or any other condition exists, and as a consequence of
such default or condition such Indebtedness has become, or has been
declared (or one or more Persons are entitled to declare such
Indebtedness to be), due and payable before its stated maturity or
before its regularly scheduled dates of payment, or (iii) as a
consequence of the occurrence or continuation of any event or condition
(other than the passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity interests), (x)
the Company or any Restricted Subsidiary has become obligated to
purchase or repay Indebtedness before its regular maturity or before
its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $5,000,000, or (y) one or more Persons
have the right to require the Company or any Restricted Subsidiary so
to purchase or repay such Indebtedness; or
(g) the Company, any Guarantor or any Significant
Subsidiary (i) is generally not paying, or admits in writing its
inability to pay, its debts as they become due, (ii) files, or consents
by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the
Company, any Guarantor or any Significant Subsidiary, a custodian,
receiver, trustee or other officer with similar powers with
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respect to it or with respect to any substantial part of its property,
or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency law of
any jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Company, any Guarantor or any Significant
Subsidiary, or any such petition shall be filed against the Company,
any Guarantor or any Significant 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 Company, any Guarantor and any Significant Subsidiary and which
judgments are not, within 60 days after entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within 60
days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or part
thereof or a waiver of such standards or extension of any amortization
period is sought or granted under section 412 of the Code, (ii) a
notice of intent to terminate any Plan shall have been or is reasonably
expected to be filed with the PBGC or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint a trustee
to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall
exceed $5,000,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or
any Subsidiary establishes or amends any employee welfare benefit plan
that provides post-employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary thereunder; and
any such event or events described in clauses (i) through (vi) above,
either individually or together with any other such event or events,
could reasonably be expected to have a Material Adverse Effect; or
(k) any Guarantor shall breach its obligations under the
Guarantee Agreement in any material respect or the Guarantee Agreement
shall have been declared to be unenforceable or any Guarantor shall
contest or deny in writing the validity or enforceability of its
obligations under the Guarantee Agreement or shall take any other
affirmative action to cause the Guarantee Agreement to cease to be
valid or enforceable.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
Section 12. Remedies on Default, etc.
Section 12.1. Acceleration. (a) If an Event of Default with respect to
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the Company, any Guarantor or a Significant Subsidiary 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 51% or more in principal amount of the Notes at the
time outstanding may at any time at its or their option, by notice or notices to
the Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
it or them to be immediately due and payable.
Upon any Note's becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Note will forthwith mature and the
entire unpaid principal amount of such Note, plus (x) all accrued and unpaid
interest thereon and (y) the Make-Whole Amount determined in respect of such
principal amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been
declared due and payable pursuant to clause (b) or (c) of Section 12.1, the
holders of not less than 66-2/3% in principal amount of the Notes then
outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, on any
Notes that are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and Make-Whole Amount,
if any, and (to the extent permitted by applicable law) any overdue interest in
respect of the Notes, at the Default Rate, (b) all Events of Default and
Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have
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been cured or have been waived pursuant to Section 17, and (c) no judgment or
decree has been entered for the payment of any monies due pursuant hereto or to
the Notes. No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements. Section 13.
Registration; Exchange; Substitution of Notes.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register, by series of Notes, for the registration
and registration of transfers of Notes. The name and address of each holder of
one or more Notes, the series thereof, each transfer thereof and the name and
address of each transferee of one or more Notes of either series shall be
registered in such register. Prior to due presentment for registration of
transfer, the Person in whose name any Note shall be registered shall be deemed
and treated as the owner and holder thereof for all purposes hereof, and the
Company shall not be affected by any notice or knowledge to the contrary. The
Company shall give to any holder of a Note that is an Institutional Investor
promptly upon request therefor, a complete and correct copy of the names and
addresses of all registered holders of Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of a Note
of either series at the principal executive office of the Company for
registration of transfer or exchange (and in the case of a surrender for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder of such Note or its attorney
duly authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), the Company shall execute and deliver,
at the Company's expense (except as provided below), one or more new Notes of
the same series (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of (i) Exhibit 1A, in
the case of a Series A Note, and (ii) Exhibit 1B, in the case of a Series B
Note. Each such new Note shall be dated and bear interest from the date to which
interest shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall
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not be transferred in denominations of less than $500,000, provided that if
necessary to enable the registration of transfer by a holder of its entire
holding of Notes of either series, one Note of the applicable series may be in a
denomination of less than $500,000. Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be deemed to have
made the representation set forth in Section 6.2, provided, however, that, such
transferee will not be deemed to have chosen the options set forth in Section
6.2(b), (c) or (e) unless such transferee shall have made the disclosures
referred to therein at least five Business Days prior to its acceptance of such
Note and shall have received prior to such acceptance of such Note the
certificate provided for in the penultimate paragraph of Section 6.2 and such
certificate shall contain the statement set forth in either Section 4.3(e)(1) or
(2), as applicable; and provided, further, that, such transferee will not be
deemed to have chosen an option set forth in Section 6.2(a), (b) or (d) unless
the applicable Class Exemption referred to therein remains in effect at that
time or another similar Class Exemption is then available. The Company shall
exercise reasonable due diligence as is necessary to respond to any such
disclosure, provided that, if the Company shall not respond within five Business
Days following receipt of any such disclosure, it shall be deemed to have made
the statement set forth in either Section 4.3(e)(1) or (2), as applicable.
Section 13.3. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another holder of a
Note with a minimum net worth of at least $10,000,000, such Person's
own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof, the Company at its own expense shall execute and deliver, in
lieu thereof, a new Note of the same series, dated and bearing interest
from the date to which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
Section 14. Payments on Notes.
Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in New York, New York at the principal office of
NationsBank, N.A. in such jurisdiction. The Company may at any time, by notice
to each holder of a Note, change the place of payment of the Notes so long as
such place of payment shall be either the principal office of the Company in
such jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
Section 14.2. Home Office Payment. So long as you or your nominee shall
be the holder of any Note, and notwithstanding anything contained in Section
14.1
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or in such Note to the contrary, the Company will pay all sums becoming due on
such Note for principal, Make-Whole Amount, if any, and interest by the method
and at the address specified for such purpose below your name in Schedule A, or
by such other method or at such other address as you shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, you shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to Section 14.1. Prior
to any sale or other disposition of any Note held by you or your nominee you
will, at your election, either endorse thereon the amount of principal paid
thereon and the last date to which interest has been paid thereon or surrender
such Note to the Company in exchange for a new Note or Notes pursuant to Section
13.2. The Company will afford the benefits of this Section 14.2 to any
Institutional Investor that is the direct or indirect transferee of any Note
purchased by you under this Agreement and that has made the same agreement
relating to such Note as you have made in this Section 14.2.
Section 15. Expenses, Etc.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required, local or other counsel) incurred by you and each Other 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, the Other
Agreements, the Intercreditor Agreement, the Pledge Agreement, the Guarantee
Agreement or the Notes (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend)
any rights under this Agreement, the Other Agreements, the Intercreditor
Agreement, the Pledge Agreement, the Guarantee Agreement or the Notes or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement, the Other Agreements, the
Intercreditor Agreement, the Pledge Agreement, the Guarantee 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 the Company or any Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save you and each other holder of a Note
harmless from, all claims in respect of any fees, costs or expenses, if any, of
brokers and finders (other than those retained by you).
Section 15.2. Survival. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement, the Other Agreements,
the Intercreditor Agreement, the Pledge Agreement, the Guarantee Agreement or
the Notes, and the termination of this Agreement.
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Section 16. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement, the Other Agreements, the
Intercreditor Agreement, the Pledge Agreement, the Guarantee Agreement and the
Notes, the purchase or transfer by you of any Note or portion thereof or
interest therein and the payment of any Note, and may be relied upon by any
subsequent holder of a Note, regardless of any investigation made at any time by
or on behalf of you or any other holder of a Note. All statements contained in
any certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement,
the Other Agreements, the Intercreditor Agreement, the Pledge Agreement, the
Guarantee Agreement and the Notes embody the entire agreement and understanding
between you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
Section 17. Amendment and Waiver.
Section 17.1. Requirements. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment or
waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any
defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is
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concurrently granted, on the same terms, ratably to each holder of Notes then
outstanding even if such holder did not consent to such waiver or amendment.
Section 17.3. Binding Effect, etc. Any amendment or waiver consented to
as provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
Section 17.4. Notes Held by Company, etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
Section 18. Notices.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Vice President,
Finance and Chief Financial Officer, or at such other address as the
Company shall have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
Section 19. Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature
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photographic or other similar process and you may destroy any original document
so reproduced. The Company agrees and stipulates that, to the extent permitted
by applicable law, any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by you in
the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
Section 20. Confidential Information.
For the purposes of this Section 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified in writing when received by you as being
confidential information of the Company or such Subsidiary, provided that such
term does not include information that (a) was publicly known or otherwise known
to you prior to the time of such disclosure, (b) subsequently becomes publicly
known through no act or omission by you or any Person acting on your behalf, (c)
otherwise becomes known to you other than through disclosure by the Company or
any Subsidiary or (d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information of third
parties delivered to you, provided that you may deliver or disclose Confidential
Information to (i) your directors, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes), (ii) your financial
advisors and other professional advisors who agree to hold confidential the
Confidential Information substantially in accordance with the terms of this
Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor
to which you sell or offer to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
20), (v) any Person from which you offer to purchase any security of the Company
(if such Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (vi) any federal
or state regulatory authority having jurisdiction over you, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
you are a party or (z) if an Event of Default has occurred and is continuing, to
the extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the
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protection of the rights and remedies under your Notes, this Agreement, the
Other Agreements, the Intercreditor Agreement, the Pledge Agreement and the
Guarantee Agreement. Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 20 as though it were a party to this Agreement. On reasonable request by
the Company in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.
Section 21. Substitution of Purchaser.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
Section 22. Miscellaneous.
Section 22.1. Successors and Assigns. All covenants
and other agreements contained in this Agreement by or on behalf of any of the
parties hereto bind and inure to the benefit of their respective successors and
assigns (including, without limitation, any subsequent holder of a Note) whether
so expressed or not.
Section 22.2. Payments Due on Non-Business Days.
Anything in this Agreement or the Notes to the contrary notwithstanding, any
payment of principal of or Make-Whole Amount or interest on any Note that is due
on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation of
the interest payable on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall (to the full
extent permitted by law) not invalidate or render unenforceable such provision
in any other jurisdiction.
Section 22.4. Construction. Each covenant contained
herein shall be construed (absent express provision to the contrary) as being
independent of each other covenant contained herein, so that compliance with any
one covenant shall not (absent
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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.
Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, the same shall be done in accordance with GAAP, to the extent
applicable, except where such principles are inconsistent with the requirements
of this Agreement.
Section 22.5. Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be an original but
all of which together shall constitute one instrument. Each counterpart may
consist of a number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto.
Section 22.6. Governing Law. This Agreement shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State that would require the application of the
laws of a jurisdiction other than such State.
* * * * *
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E-1A-109
[Form of Series A Note]
This Note is subject to the terms and conditions contained in the
Intercreditor Agreement (as defined in the Note Purchase Agreements described
below) so long as the Intercreditor Agreement has not been terminated in
accordance with its terms, which Intercreditor Agreement, among other things,
establishes certain rights with respect to the security for this Note and the
sharing of proceeds thereof with certain other secured creditors. Copies of such
Intercreditor Agreement will be furnished to any holder of this Note upon
request to the Company.
Robbins & Myers, Inc.
6.755% Senior Note, Series A, due May 1, 2008
No. AR-__ [Date]
$[____________] PPN[____________]
For Value Received, the undersigned, Robbins & Myers, Inc. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Ohio, hereby promises to pay to [________________], or registered
assigns, the principal sum of [________________] Dollars on May 1, 2008, with
interest (computed on the basis of a 360-day year of twelve 30-day months) (a)
on the unpaid balance thereof at the rate of 6.755% per annum from the date
hereof, payable semiannually, on the first day of May and November in each year,
commencing with the May 1 or November 1 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreements referred to
below), payable semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to the
greater of (i) 8.755% or (ii) 2% over the rate of interest publicly announced by
NationsBank, National Association from time to time in Charlotte, North Carolina
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 NationsBank, N.A. in New York, New York or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreements referred to
below.
This Note is one of a series of 6.755% Senior Notes, Series A, due May
1, 2008 issued in an aggregate principal amount of $70,000,000 (the "Series A
Notes"), together with the 6.835% Senior Notes, Series B, due May 1, 2010 issued
in an aggregate principal amount of $30,000,000 (the "Series B Notes"), pursuant
to separate Note Purchase Agreements, each dated as of May 1, 1998 (as from time
to time amended, the "Note Purchase Agreements"), between the Company and the
respective Purchasers named therein and is entitled to the benefits thereof.
Each holder of this Note will be deemed, by its acceptance hereof, (i) to have
agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements and (ii) to have made the representation set forth in
Section 6.2 of the Note Purchase Agreements. Capitalized terms used herein shall
have the meanings set forth in the Note Purchase Agreements unless defined
herein.
E-1A-102
47
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
So long as the Guarantee Agreement has not been released, the payment
by the Company of all amounts due with respect to the Notes has been
unconditionally guaranteed by the domestic Restricted Subsidiaries of the
Company pursuant to the Guarantee Agreement.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
Robbins & Myers, Inc.
By
[Title]
E-1A-103
48
[FORM OF SERIES B NOTE]
THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE
INTERCREDITOR AGREEMENT (AS DEFINED IN THE NOTE PURCHASE AGREEMENTS DESCRIBED
BELOW) SO LONG AS THE INTERCREDITOR AGREEMENT HAS NOT BEEN TERMINATED IN
ACCORDANCE WITH ITS TERMS, WHICH INTERCREDITOR AGREEMENT, AMONG OTHER THINGS,
ESTABLISHES CERTAIN RIGHTS WITH RESPECT TO THE SECURITY FOR THIS NOTE AND THE
SHARING OF PROCEEDS THEREOF WITH CERTAIN OTHER SECURED CREDITORS. COPIES OF SUCH
INTERCREDITOR AGREEMENT WILL BE FURNISHED TO ANY HOLDER OF THIS NOTE UPON
REQUEST TO THE COMPANY.
Robbins & Myers, Inc.
6.835% Senior Note, Series B, due May 1, 2010
No. BR-__ [Date]
$[____________] PPN[____________]
For Value Received, the undersigned, Robbins & Myers, Inc. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Ohio, hereby promises to pay to [________________], or registered
assigns, the principal sum of [________________] Dollars on May 1, 2010, with
interest (computed on the basis of a 360-day year of twelve 30-day months) (a)
on the unpaid balance thereof at the rate of 6.835% per annum from the date
hereof, payable semiannually, on the first day of May and November in each year,
commencing with the May 1 or November 1 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreements referred to
below), payable semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to the
greater of (i) 8.835% or (ii) 2% over the rate of interest publicly announced by
NationsBank, National Association from time to time in Charlotte, North Carolina
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 NationsBank, N.A. in New York, New York or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreements referred to
below.
This Note is one of a series of 6.835% Senior Notes, Series B, due May
1, 2010 issued in an aggregate principal amount of $30,000,000 (the "Series B
Notes"), together with the 6.755% Senior Notes, Series A, due May 1, 2008 issued
in an aggregate principal amount of $70,000,000 (the "Series A Notes"), pursuant
to separate Note Purchase Agreements, each dated as of May 1, 1998 (as from time
to time amended, the "Note Purchase Agreements"), between the Company and the
respective Purchasers named therein and is entitled to the benefits thereof.
Each holder of this Note will be deemed, by its acceptance hereof, (i) to have
agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements and (ii) to have made the representation set forth in
Section 6.2 of the Note Purchase Agreements. Capitalized terms used herein shall
have the meanings set forth in the Note Purchase Agreements unless defined
herein.
E-1B-104
49
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
So long as the Guarantee Agreement has not been released, the payment
by the Company of all amounts due with respect to the Notes has been
unconditionally guaranteed by the domestic Restricted Subsidiaries of the
Company pursuant to the Guarantee Agreement.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
Robbins & Myers, Inc.
By
[Title]
E-1B-105