Exhibit 10.22
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SWIFT TRANSPORTATION CO., INC.,
an Arizona corporation
and
SWIFT TRANSPORTATION CO., INC.
a Nevada corporation
$100,000,000 3.73% Senior Guaranteed Notes, Series A, Due June 27, 2008
$100,000,000 4.33% Senior Guaranteed Notes, Series B, Due June 27, 2010
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NOTE PURCHASE AGREEMENT
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Dated as of June 27, 2003
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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; GUARANTIES................................................ 2
Section 2.1. Sale and Purchase of Notes............................................................ 2
Section 2.2. Guaranties............................................................................ 2
SECTION 3. CLOSING............................................................................... 2
SECTION 4. CONDITIONS TO CLOSING................................................................. 3
Section 4.1. Representations and Warranties........................................................ 3
Section 4.2. Performance; No Default............................................................... 3
Section 4.3. Compliance Certificates............................................................... 3
Section 4.4. Constituent Company Guaranty.......................................................... 4
Section 4.5. Opinions of Counsel................................................................... 4
Section 4.6. Purchase Permitted By Applicable Law, Etc............................................. 4
Section 4.7. Sale of Other Notes................................................................... 4
Section 4.8. Payment of Special Counsel Fees....................................................... 4
Section 4.9. Private Placement Numbers............................................................. 5
Section 4.10. Changes in Corporate Structure........................................................ 5
Section 4.11. Funding Instructions.................................................................. 5
Section 4.12. Proceedings and Documents............................................................. 5
SECTION 5. REPRESENTATIONS AND WARRANTIES........................................................ 5
Section 5.1. Representations and Warranties of the Parent Corporation.............................. 5
Section 5.1.1. Organization; Power and Authority..................................................... 5
Section 5.1.2. Authorization, Etc.................................................................... 5
Section 5.1.3. Disclosure............................................................................ 6
Section 5.1.4. Organization and Ownership of Shares of Subsidiaries; Affiliates...................... 6
Section 5.1.5. Financial Statements.................................................................. 7
Section 5.1.6. Compliance with Laws, Other Instruments, Etc.......................................... 7
Section 5.1.7. Governmental Authorizations, Etc...................................................... 7
Section 5.1.8. Litigation; Observance of Agreements, Statutes and Orders............................. 7
Section 5.1.9. Taxes................................................................................. 8
Section 5.1.10. Title to Property; Leases......................................................... 8
Section 5.1.11. Licenses, Permits, Etc............................................................ 8
Section 5.1.12. Compliance with ERISA............................................................. 9
Section 5.1.13. Private Offering by the Parent Corporation........................................ 10
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Section 5.1.14. Use of Proceeds; Margin Regulations............................................... 10
Section 5.1.15. Existing Debt; Future Liens....................................................... 10
Section 5.1.16. Foreign Assets Control Regulations, Etc........................................... 11
Section 5.1.17. Status under Certain Statutes..................................................... 11
Section 5.1.18. Obligations Rank Pari Passu....................................................... 11
Section 5.2. Representations and Warranties of the Company......................................... 12
Section 5.2.1. Organization; Power and Authority..................................................... 12
Section 5.2.2. Authorization, Etc.................................................................... 12
Section 5.2.3. Compliance with Laws, Other Instruments, Etc.......................................... 12
Section 5.2.4. Governmental Authorizations, Etc...................................................... 13
Section 5.2.5. Litigation; Observance of Agreements, Statutes and Orders............................. 13
Section 5.2.6. Taxes................................................................................. 13
Section 5.2.7. Title to Property; Leases............................................................. 13
Section 5.2.8. Licenses, Permits, Etc................................................................ 14
Section 5.2.9. Private Offering by the Company....................................................... 14
Section 5.2.10. Use of Proceeds; Margin Regulations............................................... 14
Section 5.2.11. Obligations Rank Pari Passu....................................................... 14
Section 5.2.12. Solvency.......................................................................... 15
SECTION 6. REPRESENTATIONS OF THE PURCHASER...................................................... 15
Section 6.1. Purchase for Investment............................................................... 15
Section 6.2. Source of Funds....................................................................... 15
SECTION 7. INFORMATION AS TO THE PARENT CORPORATION.............................................. 16
Section 7.1. Financial and Business Information.................................................... 16
Section 7.2. Officer's Certificate................................................................. 18
Section 7.3. Inspection............................................................................ 19
SECTION 8. PREPAYMENT OF THE NOTES............................................................... 19
Section 8.1. No Required Prepayments............................................................... 19
Section 8.2. Optional Prepayments with Make-Whole Amount........................................... 20
Section 8.3. Allocation of Partial Prepayments..................................................... 20
Section 8.4. Maturity; Surrender, Etc.............................................................. 20
Section 8.5. Purchase of Notes..................................................................... 20
Section 8.6. Make-Whole Amount..................................................................... 21
SECTION 9. AFFIRMATIVE COVENANTS................................................................. 22
Section 9.1. Affirmative Covenants of the Parent Corporation....................................... 22
Section 9.1.1. Compliance with Law................................................................... 22
Section 9.1.2. Insurance............................................................................. 22
Section 9.1.3. Maintenance of Properties............................................................. 23
Section 9.1.4. Payment of Taxes and Claims........................................................... 23
Section 9.1.5. Corporate Existence, Etc.............................................................. 23
Section 9.1.6. [Reserved.]........................................................................... 23
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Section 9.1.7. Parent Guaranty to Rank Pari Passu.................................................... 23
Section 9.1.8. Guaranty by Additional Constituent Company Guarantors................................. 24
Section 9.1.9. Ownership............................................................................. 24
Section 9.1.10. Agreement to Seek Amendments...................................................... 24
Section 9.2. Affirmative Covenants of the Company.................................................. 24
Section 9.2.1. Compliance with Law................................................................... 24
Section 9.2.2. Insurance............................................................................. 25
Section 9.2.3. Maintenance of Properties............................................................. 25
Section 9.2.4. Payment of Taxes and Claims........................................................... 25
Section 9.2.5. Corporate Existence, Etc.............................................................. 25
Section 9.2.6. Notes to Rank Pari Passu.............................................................. 26
SECTION 10. NEGATIVE COVENANTS.................................................................... 26
Section 10.1. Consolidated Total Debt............................................................... 26
Section 10.2. Priority Debt......................................................................... 26
Section 10.3. Fixed Charges Coverage Ratio.......................................................... 26
Section 10.4. Consolidated Tangible Net Worth....................................................... 26
Section 10.5. Limitation on Liens................................................................... 26
Section 10.6. Mergers, Consolidations and Sales of Assets........................................... 29
Section 10.7. Transactions with Affiliates.......................................................... 33
Section 10.8. Restrictive Agreements................................................................ 33
Section 10.9. Changes to Jurisdiction of Incorporation, Fiscal Year................................. 33
Section 10.10. Nature of Business................................................................ 33
SECTION 11. PARENT GUARANTY....................................................................... 33
Section 11.1. Parent Guaranty....................................................................... 33
Section 11.2. Obligations Absolute and Unconditional................................................ 34
Section 11.3. Subrogation........................................................................... 38
Section 11.4. Preference............................................................................ 38
Section 11.5. Marshalling........................................................................... 39
Section 11.6. Subordination......................................................................... 39
SECTION 12. EVENTS OF DEFAULT..................................................................... 39
SECTION 13. REMEDIES ON DEFAULT, ETC.............................................................. 42
Section 13.1. Acceleration.......................................................................... 42
Section 13.2. Other Remedies........................................................................ 42
Section 13.3. Rescission............................................................................ 42
Section 13.4. No Waivers or Election of Remedies, Expenses, Etc..................................... 43
SECTION 14. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES......................................... 43
Section 14.1. Registration of Notes................................................................. 43
Section 14.2. Transfer and Exchange of Notes........................................................ 43
Section 14.3. Replacement of Notes.................................................................. 44
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SECTION 15. PAYMENTS ON NOTES..................................................................... 44
Section 15.1. Place of Payment...................................................................... 44
Section 15.2. Home Office Payment................................................................... 44
SECTION 16. EXPENSES, ETC......................................................................... 45
Section 16.1. Transaction Expenses.................................................................. 45
Section 16.2. Survival.............................................................................. 45
SECTION 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.......................... 45
SECTION 18. AMENDMENT AND WAIVER.................................................................. 46
Section 18.1. Requirements.......................................................................... 46
Section 18.2. Solicitation of Holders of Notes...................................................... 46
Section 18.3. Binding Effect, Etc................................................................... 47
Section 18.4. Notes Held by Company, Etc............................................................ 47
SECTION 19. NOTICES............................................................................... 47
SECTION 20. REPRODUCTION OF DOCUMENTS............................................................. 48
SECTION 21. CONFIDENTIAL INFORMATION.............................................................. 48
SECTION 22. SUBSTITUTION OF PURCHASER............................................................. 49
SECTION 23. MISCELLANEOUS......................................................................... 49
Section 23.1. Successors and Assigns................................................................ 49
Section 23.2. Payments Due on Non-Business Days..................................................... 49
Section 23.3. Severability.......................................................................... 50
Section 23.4. Construction.......................................................................... 50
Section 23.5. Counterparts.......................................................................... 50
Section 23.6. Governing Law......................................................................... 50
Section 23.7. Submission to Jurisdiction............................................................ 50
Signature..................................................................................................... 51
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SCHEDULE A -- Information Relating To Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 4.10 -- Changes in Corporate Structure
SCHEDULE 5.1.3 -- Disclosure Materials
SCHEDULE 5.1.4 -- Subsidiaries of the Company and Ownership of Subsidiary
Stock
SCHEDULE 5.1.5 -- Financial Statements
SCHEDULE 5.1.8 -- Certain Litigation
SCHEDULE 5.1.11 -- Licenses, Permits, etc.
SCHEDULE 5.1.14 -- Use of Proceeds
SCHEDULE 5.1.15 -- Existing Debt
EXHIBIT 1-A -- Form of 3.73% Senior Guaranteed Note, Series A, due June
27, 2008
EXHIBIT 1-B -- Form of 4.33% Senior Guaranteed Note, Series B, due June
27, 2010
EXHIBIT 4.5(a) -- Form of Opinion of Special Counsel for the Parent
Corporation and the Company
EXHIBIT 4.5(b) -- Form of Opinion of Special Counsel for the Purchasers
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SWIFT TRANSPORTATION CO., INC.,
an Arizona corporation
SWIFT TRANSPORTATION CO., INC.,
a Nevada corporation
2200 75TH AVENUE
PHOENIX, ARIZONA 85043
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$100,000,000 3.73% Senior Guaranteed Notes, Series A, Due June 27, 2008
$100,000,000 4.33% Senior Guaranteed Notes, Series B, Due June 27, 2010
Dated as of June 27, 2003
TO THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
SWIFT TRANSPORTATION CO., INC., an Arizona corporation (the "Company"),
and Swift Transportation Co., Inc., a Nevada corporation (the "Parent
Corporation"), hereby jointly and severally agree with the Purchasers listed in
the attached SCHEDULE A (the "Purchasers") to this Note Purchase Agreement (as
amended or supplemented from time to time, this "Agreement") as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of:
(a) $100,000,000 aggregate principal amount of its 3.73% Senior
Guaranteed Notes, Series A, due June 27, 2008 (the "Series A Notes"); and
(b) $100,000,000 aggregate principal amount of its 4.33% Senior
Guaranteed Notes, Series B, due June 27, 2010 (the "Series B Notes").
The term "Notes" as used in this Agreement shall include the Series A Notes and
the Series B Notes, and any such notes issued in substitution therefor pursuant
to SECTION 14 of this Agreement. The Notes shall be substantially in the form
set out in EXHIBIT 1-A and EXHIBIT 1-B, respectively, with such changes
therefrom, if any, as may be approved by the Purchasers and the Company. Certain
capitalized terms used in this Agreement are defined in Schedule B;
references to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES; GUARANTIES.
Section 2.1. Sale and Purchase of Notes. Subject to the terms and
conditions of this Agreement, the Company will issue and sell to each Purchaser
and each Purchaser will purchase from the Company, at the Closing provided for
in SECTION 3, Notes in the principal amount and of the series specified opposite
such Purchaser's name in SCHEDULE A at the purchase price of 100% of the
principal amount thereof. The obligations of each Purchaser hereunder are
several and not joint obligations and no Purchaser shall have any obligation or
liability to any Person for the performance or nonperformance by any other
Purchaser hereunder.
Section 2.2. Guaranties. (a) The payment by the Company of all amounts due
with respect to the Notes and the performance by the Company of its obligations
under this Agreement will be absolutely and unconditionally guaranteed by the
Parent Corporation pursuant to the guaranty set forth in SECTION 11 of this
Agreement in favor of the holders of the Notes (the "Parent Guaranty").
(b) The payment by the Company of all amounts due with respect to the
Notes and the performance by the Company of its obligations under this Agreement
will be absolutely and unconditionally guaranteed by each Constituent Company
which guarantees Debt outstanding under the Credit Agreement (together with any
additional Constituent Company which delivers a guaranty pursuant to SECTION
9.1.8, the "Constituent Company Guarantors") pursuant to a Constituent Company
Guaranty in form and substance reasonably satisfactory to the Purchasers.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by each Purchaser 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 June
27, 2003 or on such other Business Day thereafter on or prior to June 30, 2003
as may be agreed upon by the Company and the Purchasers. At the Closing, the
Company will deliver to each Purchaser the Notes to be purchased by such
Purchaser in the form of a single Note (or such greater number of Notes in
denominations of at least $100,000 as such Purchaser may request) dated the date
of the Closing and registered in such Purchaser's name (or in the name of such
Purchaser's nominee), against delivery by such Purchaser to the Company or its
order of immediately available funds in the amount of the purchase price
therefor by wire transfer of immediately available funds for credit to the
account of the Company, to account number 1536-5531-0032, at US Bank in
Portland, Oregon, ABA Number 123 000220, referencing Swift Transportation Co.,
Inc., all as more fully provided in the written instructions delivered by the
Company to the Purchasers pursuant to SECTION 4.11. If, at the Closing, the
Company shall fail to tender such Notes to any Purchaser as provided above in
this SECTION 3, or any of the conditions specified in SECTION 4 shall not have
been fulfilled to any Purchaser's satisfaction, such Purchaser shall, at such
Purchaser's election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.
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SECTION 4. CONDITIONS TO CLOSING.
The obligation of each Purchaser to purchase and pay for the Notes to be
sold to such Purchaser at the Closing is subject to the fulfillment to such
Purchaser's satisfaction, prior to or at the Closing, of the following
conditions:
Section 4.1. Representations and Warranties.
(a) The representations and warranties of each of the Parent Corporation
and the Company in this Agreement shall be correct when made and at the time of
the Closing.
(b) The representations and warranties of each Constituent Company
Guarantor in the Constituent Company Guaranty shall be correct when made and at
the time of the Closing.
Section 4.2. Performance; No Default. Each of the Parent Corporation and
the Company shall have performed and complied with all agreements and conditions
contained in this Agreement required to be performed or complied with by the
Parent Corporation or the Company, as the case may be, 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 5.1.14), no
Default or Event of Default shall have occurred and be continuing. Neither the
Parent Corporation nor any Subsidiary shall have entered into any transaction
since the date of the Memorandum that would have been prohibited by SECTION 10
hereof had such Section applied since such date.
Section 4.3. Compliance Certificates.
(a) Parent Corporation Officer's Certificate. The Parent Corporation shall
have delivered to such Purchaser an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in SECTIONS 4.1(A), 4.2 and
4.10 in respect of the Parent Corporation have been fulfilled.
(b) Company Officer's Certificate. The Company shall have delivered to
such Purchaser an Officer's Certificate, dated the date of the Closing,
certifying that the conditions specified in SECTIONS 4.1(A), 4.2 and 4.10 in
respect of the Company have been fulfilled.
(c) Constituent Company Guarantors' Officer's Certificates. Each
Constituent Company Guarantor shall have delivered to such Purchaser a
certificate of an authorized officer, dated the date of the Closing, certifying
that the condition specified in SECTION 4.1(B) in respect of such Constituent
Company Guarantor has been fulfilled.
(d) Parent Corporation Secretary's Certificate. The Parent Corporation
shall have delivered to such Purchaser a certificate certifying as to the
resolutions of the Parent Corporation attached thereto and other corporate
proceedings relating to the authorization, execution and delivery of this
Agreement by the Parent Corporation.
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(e) Company Secretary's Certificate. The Company shall have delivered to
such Purchaser a certificate certifying as to the resolutions of the Company
attached thereto and other corporate proceedings relating to the authorization,
execution and delivery of the Notes and this Agreement by the Company.
(f) Constituent Company Guarantors' Secretary's Certificates. Each
Constituent Company Guarantor shall have delivered to such Purchaser a
certificate certifying as to the resolutions of such Constituent Company
Guarantor attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Constituent Company Guaranty by
such Constituent Company Guarantor.
Section 4.4. Constituent Company Guaranty. The Constituent Company
Guaranty shall have been duly executed and delivered by the parties thereto and
shall be in full force and effect and such Purchaser shall have received a true,
correct and complete copy thereof.
Section 4.5. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser, dated the date of
the Closing (a) from Snell & Wilmer L.L.P., counsel for the Parent Corporation
and the Company, covering the matters set forth in EXHIBIT 4.5(A) and covering
such other matters incident to the transactions contemplated hereby as such
Purchaser or such Purchaser's counsel may reasonably request (and the Company
hereby instructs its counsel to deliver such opinion to such Purchaser) and (b)
from Chapman and Cutler, such Purchaser's special counsel in connection with
such transactions, substantially in the form set forth in EXHIBIT 4.5(B) and
covering such other matters incident to such transactions as such Purchaser may
reasonably request.
Section 4.6. Purchase Permitted By Applicable Law, Etc. On the date of the
Closing, each purchase of Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which each Purchaser is subject, without
recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including, without limitation, Regulation T, U or X of the
Board of Governors of the Federal Reserve System), and (c) not subject such
Purchaser to any tax, penalty or liability under or pursuant to any applicable
law or regulation, which law or regulation was not in effect on the date hereof.
If requested by such Purchaser, such Purchaser shall have received an Officer's
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.
Section 4.7. Sale of Other Notes. The Company shall have consummated the
sale of the entire principal amount of the Notes scheduled to be sold on the
date of Closing pursuant to this Agreement.
Section 4.8. Payment of Special Counsel Fees. Without limiting the
provisions of SECTION 16.1, the Company shall have paid, on or before the
Closing, the fees, charges and disbursements of the Purchasers' special counsel
referred to in SECTION 4.5 to the extent reflected in a statement of such
counsel rendered to the Company at least one Business Day prior to the Closing.
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Section 4.9. Private Placement Numbers. Private Placement Numbers 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 4.10. Changes in Corporate Structure. Except as set forth in
SCHEDULE 4.10, neither the Parent Corporation nor the Company shall have changed
its jurisdiction of incorporation or been a party to any consolidation or merger
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 5.1.5.
Section 4.11. Funding Instructions. At least three Business Days prior to
the date of the Closing, such Purchaser shall have received written instructions
executed by a Responsible Officer of the Company directing the manner of the
payment of funds and setting forth (a) the name and address of the transferee
bank, (b) such transferee bank's ABA number, (c) the account name and number
into which the purchase price for the Notes is to be deposited, and (d) the name
and telephone number of the account representative responsible for verifying
receipt of such funds.
Section 4.12. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to such Purchaser and such Purchaser's special counsel, and such
Purchaser and such Purchaser's special counsel shall have received all such
counterpart originals or certified or other copies of such documents as such
Purchaser or such Purchaser's special counsel may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
Section 5.1. Representations and Warranties of the Parent Corporation. The
Parent Corporation represents and warrants to each Purchaser that:
Section 5.1.1. Organization; Power and Authority. The Parent Corporation
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 Parent
Corporation has the corporate power and authority to own or hold under lease the
properties it purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this Agreement and to
perform the provisions hereof.
Section 5.1.2. Authorization, Etc. This Agreement has been duly authorized
by all necessary corporate action on the part of the Parent Corporation, and
this Agreement constitutes a legal, valid and binding obligation of the Parent
Corporation enforceable against the Parent Corporation in accordance with its
terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting
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the enforcement of creditors' rights generally and (b) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
Section 5.1.3. Disclosure. The Parent Corporation, through its agent,
SunTrust Capital Markets, Inc., has delivered to each Purchaser a copy of a
Private Placement Memorandum, dated May, 2003 (including the filings made by the
Parent Corporation with the Securities and Exchange Commission incorporated
therein by reference, 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 Parent
Corporation and its Subsidiaries. Except as disclosed in SCHEDULE 5.1.3, this
Agreement, the Memorandum, the documents, certificates and other writings
delivered to each Purchaser by or on behalf of the Parent Corporation in
connection with the transactions contemplated hereby and the financial
statements listed in SCHEDULE 5.1.5, 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, since December 31,
2002, there has been no change in the financial condition, operations, business,
properties or prospects of the Parent Corporation or any Subsidiary except
changes that individually or in the aggregate could not reasonably be expected
to have a Material Adverse Effect. There is no fact known to the Parent
Corporation or the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Memorandum or in the
other documents, certificates and other writings delivered to each Purchaser by
or on behalf of the Parent Corporation specifically for use in connection with
the transactions contemplated hereby.
Section 5.1.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) SCHEDULE 5.1.4 contains (except as noted therein) complete and
correct lists of (i) the Parent Corporation'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 Parent Corporation and each other Subsidiary,
(ii) the Parent Corporation's Affiliates, other than Subsidiaries, and (iii) the
Parent Corporation's directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in SCHEDULE 5.1.4 as being owned by the
Parent Corporation and its Subsidiaries have been validly issued, are fully paid
and nonassessable and are owned by the Parent Corporation or another Subsidiary
free and clear of any Lien (except as otherwise disclosed in SCHEDULE 5.1.4).
(c) Each Subsidiary identified in SCHEDULE 5.1.4 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
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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 Credit Agreement
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 Parent Corporation or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
Section 5.1.5. Financial Statements. The Parent Corporation has delivered
to each Purchaser copies of the financial statements of the Parent Corporation
and its Subsidiaries listed on SCHEDULE 5.1.5. 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 Parent Corporation
and its Subsidiaries as of the respective dates specified in such financial
statements and the consolidated results of their operations and cash flows for
the respective periods so specified and have been prepared in accordance with
GAAP consistently applied throughout the periods involved except as set forth in
the notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).
Section 5.1.6. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Parent Corporation of this Agreement
will not (a) contravene, result in any breach of, or constitute a default under,
or result in the creation of any Lien in respect of any property of the Parent
Corporation 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 Parent Corporation or any Subsidiary
is bound or by which the Parent Corporation or any Subsidiary or any of their
respective properties may be bound or affected, (b) conflict with or result in a
breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable
to the Parent Corporation or any Subsidiary or (c) violate any provision of any
statute or other rule or regulation of any Governmental Authority applicable to
the Parent Corporation or any Subsidiary.
Section 5.1.7. 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 Parent Corporation of this Agreement.
Section 5.1.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the knowledge of
the Parent Corporation, threatened against or affecting the Parent Corporation
or any Subsidiary or any property of the Parent Corporation 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.
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(b) Neither the Parent Corporation 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 5.1.9. Taxes. The Parent Corporation 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 (a) the amount of which is not individually or in the aggregate
Material or (b) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Parent Corporation or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. The Parent Corporation
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 Parent Corporation and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Parent Corporation and its Subsidiaries have been
determined by the Internal Revenue Service and paid for all fiscal years up to
and including the fiscal year ended December 31, 1998.
Section 5.1.10. Title to Property; Leases. The Parent Corporation 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 5.1.5
or purported to have been acquired by the Parent Corporation 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 5.1.11. Licenses, Permits, Etc. Except as disclosed in SCHEDULE
5.1.11,
(a) the Parent Corporation 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 Parent Corporation, no product of
the Parent Corporation or any of its Subsidiaries infringes in any
Material respect any license, permit, franchise, authorization, patent,
copyright, service mark, trademark, trade name or other right owned by any
other Person; and
(c) to the best knowledge of the Parent Corporation, there is no
Material violation by any Person of any right of the Parent Corporation or
any of its Subsidiaries
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with respect to any patent, copyright, service mark, trademark, trade name
or other right owned or used by the Parent Corporation or any of its
Subsidiaries.
Section 5.1.12. Compliance with ERISA. (a) The Parent Corporation 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 Parent Corporation 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 Parent Corporation or any ERISA Affiliate, or in the imposition of any
Lien on any of the rights, properties or assets of the Parent Corporation or any
ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such
penalty or excise tax provisions or to Section 401(a)(29) or 412 of the Code,
other than such liabilities or Liens as would not be individually or in the
aggregate Material.
(b) The present value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $2,000,000 in the case of any
single Plan and by more than $5,000,000 in the aggregate for all Plans. The term
"benefit liabilities" has the meaning specified in Section 4001 of ERISA and the
terms "current value" and "present value" have the meaning specified in Section
3 of ERISA.
(c) The Parent Corporation and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under Section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of the
last day of the Parent Corporation's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106, without
regard to liabilities attributable to continuation coverage mandated by Section
4980B of the Code) of the Parent Corporation and its Subsidiaries is not
Material.
(e) Each Non-U.S. Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities; neither the
Parent Corporation nor any Subsidiary has incurred any obligation in connection
with the termination of or withdrawal from any Non-U.S. Pension Plan; and the
present value of the accrued benefit liabilities (whether or not vested) under
each Non-U.S. Pension Plan, determined as of the end of the Parent Corporation's
most recently ended fiscal year on the basis of actuarial assumptions, each of
which is reasonable, did not exceed the current value of the assets of such
Non-U.S. Pension Plan allocable to such benefit liabilities. All contributions
required to be made with respect to a Non-U.S. Pension Plan have been timely
made.
-9-
(f) 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 Parent Corporation in the first sentence of this SECTION 5.1.12(F) is made
in reliance upon and subject to the accuracy of each Purchaser's representation
in SECTION 6.2 as to the sources of the funds to be used to pay the purchase
price of the Notes to be purchased by such Purchaser.
Section 5.1.13. Private Offering by the Parent Corporation. Neither the
Parent Corporation nor anyone acting on its behalf has offered the Notes, the
Parent Guaranty or the Constituent Company Guaranty or any similar securities
for sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than the
Purchasers and not more than 18 other Institutional Investors, each of which has
been offered the Notes, the Parent Guaranty and the Constituent Company Guaranty
at a private sale for investment. Neither the Parent Corporation 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 issuance of the Parent Guaranty or the
Constituent Company Guaranty to the registration requirements of Section 5 of
the Securities Act.
Section 5.1.14. Use of Proceeds; Margin Regulations. The Parent
Corporation and the Company will apply the proceeds of the sale of the Notes as
set forth in SCHEDULE 5.1.14. 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 Parent Corporation 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 10% of the
value of the consolidated assets of the Parent Corporation and its Subsidiaries
and the Parent Corporation does not have any present intention that margin stock
will constitute more than 10% 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 5.1.15. Existing Debt; Future Liens. (a) SCHEDULE 5.1.15 sets
forth a complete and correct list of all outstanding Debt of the Parent
Corporation and its Subsidiaries as of May 31, 2003 (except as therein noted),
since which date there has been no Material change in the amounts, interest
rates, sinking funds, installment payments or maturities of the Debt of the
Parent Corporation or its Subsidiaries. Neither the Parent Corporation nor any
Subsidiary is in default and no waiver of default is currently in effect, in the
payment of any principal or interest on any Debt of the Parent Corporation or
such Subsidiary and no event or condition exists with respect to any Debt of the
Parent Corporation or any Subsidiary that would permit (or that with notice or
the lapse of time, or both, would permit) one or more Persons to cause such Debt
to become due and payable before its stated maturity or before its regularly
scheduled dates of payment.
-10-
(b) Except as disclosed in SCHEDULE 5.1.15, neither the Parent Corporation
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 10.5.
Section 5.1.16. 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. Without limiting the foregoing, (a) neither the Parent
Corporation nor any of its Subsidiaries (i) is a blocked person described in
Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and
Prohibiting Transaction With Persons Who Commit and Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49049 (2001)) or (ii) engages in any dealings or
transactions, or is otherwise associated, with any such blocked person and (b)
the Parent Corporation and its Subsidiaries are in compliance, in all Material
respects, with the USA Patriot Act of 2001 (signed into law October 26, 2001).
Section 5.1.17. Status under Certain Statutes. Neither the Parent
Corporation nor any Subsidiary is an "investment company" registered or required
to be registered or subject to regulation under the Investment Company Act of
1940, as amended, or is subject to regulation under the Public Utility Holding
Company Act of 1935, as amended, the ICC Termination Act of 1995, as amended, or
the Federal Power Act, as amended.
Section 5.1.18. Obligations Rank Pari Passu. The obligations of the Parent
Corporation under this Agreement (including the Parent Guaranty) rank at least
pari passu in right of payment with all other senior unsecured Debt (actual or
contingent) of the Parent Corporation, including, without limitation, all senior
unsecured Debt of the Parent Corporation described in SCHEDULE 5.1.15 hereto,
except as contemplated in SECTION 9.1.10.
Section 5.1.19. Environmental Matters. Neither the Parent Corporation 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
Parent Corporation 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 the Purchasers in
writing:
(a) neither the Parent Corporation 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 Parent Corporation nor any of its Subsidiaries has
stored any Hazardous Materials on real properties now or formerly owned,
leased or operated by any
-11-
of them or has disposed of any Hazardous Materials in a manner contrary to
any Environmental Laws in each case in any manner that could reasonably be
expected to result in a Material Adverse Effect; and
(c) all buildings and structures (including, without limitation,
fuel storage tanks) on all real properties now owned, leased or operated
by the Parent Corporation 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 5.2. Representations and Warranties of the Company. The Company
represents and warrants to each Purchaser that:
Section 5.2.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Notes
and to perform the provisions hereof and thereof.
Section 5.2.2. Authorization, Etc. This Agreement and the Notes have been
duly authorized by all necessary corporate action on the part of the Company,
and this Agreement constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 5.2.3. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not (a) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Subsidiary of the Company 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 of
the Company is bound or by which the Company or any Subsidiary of the Company or
any of their respective properties may be bound or affected, (b) conflict with
or result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary of the Company or (c)
violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary of the
Company.
-12-
Section 5.2.4. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
Section 5.2.5. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the knowledge of
the Company, threatened against or affecting the Company or any Subsidiary of
the Company or any property of the Company or any Subsidiary of the Company 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 of the Company 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 5.2.6. 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 (a) the amount
of which is not individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary of
the Company, as the case may be, has established adequate reserves in accordance
with GAAP. The Company knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Company and its Subsidiaries in
respect of Federal, state or other taxes for all fiscal periods are adequate.
The Federal income tax liabilities of the Company and its Subsidiaries have been
determined by the Internal Revenue Service and paid for all fiscal years up to
and including the fiscal year ended December 31, 1998.
Section 5.2.7. 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 5.1.5 or purported to
have been acquired by the Company or any Subsidiary of the Company 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.
-13-
Section 5.2.8. Licenses, Permits, Etc. Except as disclosed in SCHEDULE
5.1.11,
(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
or any of its Subsidiaries infringes in any Material respect any license,
permit, franchise, authorization, patent, copyright, service mark,
trademark, trade name or other right owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
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 5.2.9. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes, the Parent Guaranty or the
Constituent Company Guaranty or any similar securities for sale to, or solicited
any offer to buy any of the same from, or otherwise approached or negotiated in
respect thereof with, any Person other than the Purchasers and not more than 18
other Institutional Investors, each of which has been offered the Notes, the
Parent Guaranty or the Constituent Company Guaranty 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 issuance of the Parent Guaranty or the Constituent Company Guaranty to the
registration requirements of Section 5 of the Securities Act.
Section 5.2.10. Use of Proceeds; Margin Regulations. The Company will
apply the proceeds of the sale of the Notes as set forth in SCHEDULE 5.1.14. 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 5.2.11. Obligations Rank Pari Passu. The obligations of the
Company under this Agreement and the Notes rank at least pari passu in right of
payment with all other senior unsecured Debt (actual or contingent) of the
Company, including, without limitation, all senior unsecured Debt of the Company
described in SCHEDULE 5.1.15 hereto, except as contemplated in SECTION 9.1.10.
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Section 5.2.12. Solvency. On the date of Closing, after giving effect to
the issuance of the Notes and the application of the proceeds thereof, the
Company is Solvent.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase for Investment. Each Purchaser represents that it is
purchasing the Notes for its own account or for one or more separate accounts
maintained by it or for the account of one or more pension or trust funds and
not with a view to the distribution thereof, provided that the disposition of
such Purchaser's or such pension or trust funds' property shall at all times be
within such Purchaser's or such pension or trust funds' control. Each Purchaser
understands that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.
Section 6.2. Source of Funds. Each Purchaser represents that at least one
of the following statements is an accurate representation as to each source of
funds (a "Source") to be used by it to pay the purchase price of the Notes to be
purchased by it hereunder:
(a) the Source is an "insurance company general account" within the
meaning of Department of Labor Prohibited Transaction Exemption ("PTE")
95-60 (issued July 12, 1995) and there is no employee benefit plan,
treating as a single plan all plans maintained by the same employer or
employee organization, with respect to which the amount of the general
account reserves and liabilities for all contracts held by or on behalf of
such plan, exceeds 10% of the total reserves and liabilities of such
general account (exclusive of separate account liabilities) plus surplus,
as set forth in the NAIC Annual Statement for such Purchaser most recently
filed with such Purchaser's state of domicile; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
a bank collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except as such Purchaser has disclosed to the
Company in writing pursuant to this paragraph (b), no employee benefit
plan or group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets allocated to
such pooled separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM
-15-
nor a person controlling or controlled by the QPAM (applying the
definition of "control" in Section V(e) of the QPAM Exemption) owns a 5%
or more interest in either the Company or the Parent Corporation and (i)
the identity of such QPAM and (ii) the names of all employee benefit plans
whose assets are included in such investment fund have been disclosed to
the Company in writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans,
each of which has been identified to the Company in writing pursuant to
this paragraph (e); or
(f) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA; or
(g) the Source is an insurance company separate account maintained
solely in connection with the fixed contractual obligations of the
insurance company under which the amounts payable, or credited, to any
employee benefit plan (or its related trust) and to any participant or
beneficiary of such plan (including any annuitant) are not affected in any
manner by the investment performance of the separate account.
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 THE PARENT CORPORATION.
Section 7.1. Financial and Business Information. The Parent Corporation
shall deliver to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements -- within 50 days after the end of each
quarterly fiscal period in each fiscal year of the Parent Corporation
(other than the last quarterly fiscal period of each such fiscal year),
duplicate copies of:
(i) a consolidated balance sheet of the Parent Corporation and
its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of earnings, changes in
stockholders' equity and cash flows of the Parent Corporation and
its Subsidiaries for such quarter and (in the case of the second and
third quarters) for the portion of the fiscal year ending with such
quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and
-16-
their results of operations and cash flows, subject to changes resulting from
year-end adjustments; provided that delivery within the time period specified
above of copies of the Parent Corporation's Quarterly Report on Form 10-Q
prepared in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the requirements
of this SECTION 7.1(A);
(b) Annual Statements -- within 95 days after the end of each fiscal
year of the Parent Corporation, duplicate copies of,
(i) a consolidated balance sheet of the Parent Corporation and
its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of earnings, changes in
stockholders' equity and cash flows of the Parent Corporation and
its Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by an opinion thereon of independent certified
public accountants of recognized national standing, which opinion shall
state that such financial statements present fairly, in all material
respects, the financial position of the companies being reported upon and
their results of operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such accountants in
connection with such financial statements has been made in accordance with
generally accepted auditing standards, and that such audit provides a
reasonable basis for such opinion in the circumstances, provided that the
delivery within the time period specified above of the Parent
Corporation's Annual Report on Form 10-K for such fiscal year (together
with the Parent Corporation'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 Parent Corporation or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all amendments thereto
filed by the Parent Corporation or any Subsidiary with any securities
exchange or the Securities and Exchange Commission;
(d) Notice of Default or Event of Default -- promptly, and in any
event within five 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 12(F), a written
notice specifying the nature and period of existence thereof and what
action the Parent Corporation is taking or proposes to take with respect
thereto;
-17-
(e) ERISA Matters -- promptly, and in any event within five 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 Parent Corporation or an ERISA Affiliate proposes to take with
respect thereto:
(i) with respect to any Plan, any reportable event, as defined
in Section 4043(c) of ERISA and the regulations thereunder, for
which notice thereof has not been waived pursuant to such
regulations as in effect on the date 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 Parent
Corporation 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 Parent Corporation 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 Parent Corporation 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
Parent Corporation 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, assets or properties of the Parent Corporation or any
of its Subsidiaries or relating to the ability of the Parent Corporation
or the Company to perform their respective 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 Parent
Corporation was in compliance with the requirements of SECTION 10.1
through SECTION 10.6 hereof, inclusive, during the quarterly
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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 Parent
Corporation 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 Parent Corporation or any Subsidiary to
comply with any Environmental Law), specifying the nature and period of
existence thereof and what action the Parent Corporation shall have taken
or proposes to take with respect thereto.
Section 7.3. Inspection. The Parent Corporation and 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 Parent
Corporation and the Company, to visit the principal executive office of
the Parent Corporation and the Company, to discuss the affairs, finances
and accounts of the Parent Corporation and its Subsidiaries with the
Parent Corporation's and the Company's officers, and (with the consent of
the Parent Corporation, which consent will not be unreasonably withheld)
their independent public accountants, and (with the consent of the Parent
Corporation, which consent will not be unreasonably withheld) to visit the
other offices and properties of the Parent Corporation 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 Parent Corporation, to visit and inspect any of the offices
or properties of the Parent Corporation 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 Parent
Corporation authorizes said accountants to discuss the affairs, finances
and accounts of the Parent Corporation and its Subsidiaries), all at such
times and as often as may be requested.
SECTION 8. PREPAYMENT OF THE NOTES.
Section 8.1. Required Prepayments. The Company agrees that:
(a) Series A Notes. There shall be no scheduled principal
prepayments in respect of the Series A Notes. On June 27, 2008, the entire
principal amount of the
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Series A Notes, together with accrued and unpaid interest thereon, shall
become due and payable.
(b) Series B Notes. There shall be no scheduled principal
prepayments in respect of the Series B Notes. On June 27, 2010, the entire
principal amount of the Series B Notes, together with accrued and unpaid
interest thereon, shall become due and payable.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may,
at its option, upon notice as provided below, prepay at any time all, or from
time to time any part of, the Notes, in an amount not less than 10% of the
aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment, plus the Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
The Company will give each holder of Notes written notice of each optional
prepayment under this SECTION 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date, the aggregate principal amount of the Notes to be prepaid on such
date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with SECTION 8.3), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. 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 pursuant to SECTION 8.2, the principal amount of
the Notes to be prepaid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment.
Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this SECTION 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.
Section 8.5. Purchase of Notes. The Company will not and will not permit
any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the Notes. The
Company will promptly cancel all Notes acquired by it or any
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Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
Section 8.6. Make-Whole Amount. The term "Make-Whole Amount" means, with
respect to any Note, an amount equal to the excess, if any, of the Discounted
Value of the Remaining Scheduled Payments with respect to the Called Principal
of such Note over the amount of such Called Principal; provided that the
Make-Whole Amount may in no event be less than zero. It is understood by the
parties that the determination of Reinvestment Yield, Remaining Average Life and
Remaining Scheduled Payments in respect of each Series of Notes will be
different and, accordingly, the Make-Whole Amount for each Series of Notes will
be different. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to SECTION 8.2 or has become or
is declared to be immediately due and payable pursuant to SECTION 13.1, as
the context requires.
"Discounted Value" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on such Note 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, 0.50% per annum over the yield to maturity implied by (a) the
yields reported, as of 10:00 A.M. (New York City time) on the second
Business Day preceding the Settlement Date with respect to such Called
Principal, on the display designated as "Page PX1" of the Bloomberg
Financial Markets Services Screen (or, if not available, any other
national recognized trading screen reporting on-line intraday trading in
the U.S. Treasury securities) 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 (b) if such yields are not
reported as of such time or the yields reported as of such time are not
ascertainable, the Treasury Constant Maturity Series Yields reported, for
the latest day for which such yields have been so reported as of the
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 (i) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted financial
practice and (ii) interpolating linearly between (1) the actively traded
U.S. Treasury security with the term to maturity closest to and greater
than the Remaining Average Life and (2) the actively traded U.S. Treasury
security with the term to maturity closest to and less than the Remaining
Average Life.
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"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (a) such Called Principal into (b) the sum of
the products obtained by multiplying (i) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (ii)
the number of years (calculated to the nearest one-twelfth year) that will
elapse between the Settlement Date with respect to such Called Principal
and the scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date; provided that if such Settlement Date is not a
date on which interest payments are due to be made under the terms of such
Note, then the amount of the next succeeding scheduled interest payment
will be reduced by the amount of interest accrued to such Settlement Date
and required to be paid on such Settlement Date pursuant to SECTION 8.2 or
13.1.
"Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
SECTION 8.2 or has become or is declared to be immediately due and payable
pursuant to SECTION 13.1, as the context requires.
SECTION 9. AFFIRMATIVE COVENANTS.
Section 9.1. Affirmative Covenants of the Parent Corporation. The Parent
Corporation covenants that so long as any of the Notes are outstanding:
Section 9.1.1. Compliance with Law. The Parent Corporation 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, ERISA and applicable laws in respect of Non-U.S. Pension
Plans and all 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 9.1.2. Insurance. The Parent Corporation 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.
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Section 9.1.3. Maintenance of Properties. The Parent Corporation will, and
will cause each of its Subsidiaries to, maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times; provided that
this SECTION 9.1.3 shall not prevent the Parent Corporation 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 Parent
Corporation has concluded that such discontinuance could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.1.4. Payment of Taxes and Claims. The Parent Corporation 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, assessments, charges and levies 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 Parent Corporation or any Subsidiary; provided that
neither the Parent Corporation nor any Subsidiary need pay any such tax,
assessment, charge, levy or claim if (a) the amount, applicability or validity
thereof is contested by the Parent Corporation or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Parent Corporation
or a Subsidiary has established adequate reserves therefor in accordance with
GAAP on the books of the Parent Corporation or such Subsidiary or (b) the
nonpayment of all such taxes, assessments, charges, levies and claims in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
Section 9.1.5. Corporate Existence, Etc. Subject to SECTION 10.6, the
Parent Corporation will at all times preserve and keep in full force and effect
its corporate existence and will at all times preserve and keep in full force
and effect the corporate existence of each of its Subsidiaries (unless merged
into the Parent Corporation or a Wholly-owned Subsidiary) and all rights and
franchises of the Parent Corporation and its Subsidiaries unless, in the good
faith judgment of the Parent Corporation, 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 9.1.6. [Reserved.]
Section 9.1.7. Parent Guaranty to Rank Pari Passu. The obligations of the
Parent Corporation under and in respect of the Parent Guaranty are and at all
times shall remain a direct and unsecured obligation of the Parent Corporation
ranking pari passu as against the assets of the Parent Corporation with all
other present and future unsecured Debt (actual or contingent) of the Parent
Corporation which is not expressed to be subordinate or junior in rank to any
other unsecured Debt of the Parent Corporation.
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Section 9.1.8. Guaranty by Additional Constituent Company Guarantors. The
Parent Corporation will cause each Constituent Company which delivers a Guaranty
to any Person in respect of any Debt of the Parent Corporation or of the Company
outstanding under the Credit Agreement (or under any credit facility or other
Debt instrument replacing all or part thereof) to concurrently enter into a
Constituent Company Guaranty, and within five Business Days thereafter shall
deliver to each of the holders of the Notes the following items:
(a) an executed counterpart of such Constituent Company
Guaranty or joinder agreement in respect of an existing
Constituent Company Guaranty, as appropriate;
(b) a certificate signed by the President, a Vice President
or another authorized Responsible Officer of such Constituent
Company making representations and warranties to the effect of
those contained in SECTIONS 5.1.1, 5.1.2, 5.1.6 and 5.1.7, but
with respect to such Constituent Company and such Constituent
Company Guaranty, as applicable;
(c) such documents and evidence with respect to such
Constituent Company as any holder of the Notes may reasonably
request in order to establish the existence and good standing of
such Constituent Company and the authorization of the transactions
contemplated by such Constituent Company Guaranty; and
(d) an opinion of counsel satisfactory to the Required
Holders to the effect that such Constituent Company Guaranty has
been duly authorized, executed and delivered and constitutes the
legal, valid and binding contract and agreement of such
Constituent Company enforceable in accordance with its terms,
except as an enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting the enforcement of creditors' rights generally and
by general equitable principles.
Section 9.1.9. Ownership. Subject to SECTION 10.6(A), the Parent
Corporation shall at all times own, directly or indirectly, 100% of the issued
and outstanding stock of the Company.
Section 9.1.10. Agreement to Seek Amendments. The Parent Corporation
agrees that, on or before November 15, 2005, it shall use its best efforts to
effect an amendment to the Credit Agreement and the Guaranties issued in
connection therewith, or it shall enter into a renewal or replacement of the
Credit Agreement and such Guaranties, which amendment, renewal or replacement
eliminates any obligation on the part of the Parent Corporation or any
Subsidiary to pay-over to the lenders under the Credit Agreement intercompany
advances in preference to payments due to the holders of the Notes under the
Notes and the other Note Documents.
Section 9.2. Affirmative Covenants of the Company. The Company covenants
that so long as any of the Notes are outstanding:
Section 9.2.1. 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,
ERISA and applicable laws in respect of
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Non-U.S. Pension Plans and all 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 9.2.2. 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 9.2.3. Maintenance of Properties. The Company will, and will
cause each of its Subsidiaries to, maintain and keep, or cause to be maintained
and kept, their respective properties in good repair, working order and
condition (other than ordinary wear and tear), so that the business carried on
in connection therewith may be properly conducted at all times; provided that
this SECTION 9.2.3 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 9.2.4. 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, assessments, charges and levies 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, assessment, charge, levy or claim if (a)
the amount, applicability or validity thereof is contested by the Company or
such Subsidiary on a timely basis in good faith and in appropriate proceedings,
and the Company or a Subsidiary has established adequate reserves therefor in
accordance with GAAP on the books of the Company or such Subsidiary or (b) the
nonpayment of all such taxes, assessments, charges, levies, and claims in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
Section 9.2.5. Corporate Existence, Etc. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
SECTION 10.6, the Company will at all times preserve and keep in full force and
effect the corporate existence of each of its Subsidiaries (unless merged into
the Company or a Subsidiary) and all rights and franchises of the Company and
its Subsidiaries unless, in the good faith judgment of the Company, the
termination of or
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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 9.2.6. Notes to Rank Pari Passu. The Notes and all other
obligations under this Agreement of the Company are and at all times shall
remain direct and unsecured obligations of the Company ranking pari passu as
against the assets of the Company with all other Notes from time to time issued
and outstanding hereunder without any preference among themselves and pari passu
with all other present and future unsecured Debt (actual or contingent) of the
Company which is not expressed to be subordinate or junior in rank to any other
unsecured Debt of the Company.
SECTION 10. NEGATIVE COVENANTS.
The Parent Corporation covenants that so long as any of the Notes are
outstanding:
Section 10.1. Consolidated Total Debt. The Parent Corporation will not at
any time permit Consolidated Total Debt to exceed 55% of Consolidated Total
Capitalization determined as of the last day of the immediately preceding fiscal
quarter.
Section 10.2. Priority Debt. The Parent Corporation will not at any time
permit Priority Debt to exceed 25% of Consolidated Tangible Net Worth determined
as of the last day of the immediately preceding fiscal quarter.
Section 10.3. Fixed Charges Coverage Ratio. The Parent Corporation will
not, as of the last day of any fiscal quarter, permit the ratio of (a)
Consolidated EBITDAR for the period consisting of the four consecutive fiscal
quarters ending on such date to (b) Consolidated Fixed Charges for such period
to be less than 1.50 to 1.0.
Section 10.4. Consolidated Tangible Net Worth. The Parent Corporation
will at all times keep and maintain Consolidated Tangible Net Worth at an amount
not less than the sum of (a) $600,000,000, plus (b) an aggregate amount equal to
50% of Consolidated Net Income (but, in each case, only if a positive number)
for each completed fiscal quarter commencing with the fiscal quarter ending June
30, 2003, plus (c) 100% of the amount by which "total stockholders' equity" of
the Parent Corporation is increased as a result of any public or private
offering of common stock of the Parent Corporation after the date of Closing.
Section 10.5. Limitation on Liens. The Parent Corporation will not, and
will not permit any Subsidiary to, create or incur, or suffer to be incurred or
to exist, any Lien on its or their property or assets (including, without
limitation, Intercompany Obligations and instruments evidencing the same),
whether now owned or hereafter acquired, or upon any income or profits
therefrom, or transfer any property for the purpose of subjecting the same to
the payment of obligations in priority to the payment of its or their general
creditors, or acquire or agree to acquire, or permit any Subsidiary to acquire,
any property or assets upon conditional sales agreements or other title
retention devices, except:
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(a) Liens for taxes and assessments or governmental charges
or levies and Liens securing claims or demands of mechanics,
workmen, carriers and materialmen; provided that payment thereof
is not at the time required by SECTION 9.1.4 or SECTION 9.2.4;
(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 Parent Corporation or a
Subsidiary shall at all times 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 incidental to the conduct of business or the
ownership of properties and assets (including Liens in connection
with worker's compensation, unemployment insurance, social
security and other like laws, warehousemen's and attorneys' liens
and statutory landlords' liens), Liens to secure the performance
of bids, tenders or trade contracts, or to secure statutory
obligations, surety or appeal bonds (including pledges, deposits
and other security arrangements, together with related letters of
credit and performance and indemnity bonds) or other Liens of like
general nature, and the retained interest of landlords in
connection with property leased by the Parent Corporation or any
of its Subsidiaries, in any such case incurred in the ordinary
course of business and not in connection with the borrowing of
money; provided in each case, the obligation secured is not
overdue or, if overdue, is being contested in good faith by
appropriate actions or proceedings;
(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, which are necessary
for the conduct of the activities of the Parent Corporation and
its 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 Parent Corporation and its
Subsidiaries, taken as a whole;
(e) Liens attaching to Receivables sold or pledged by the
Parent Corporation or a Subsidiary in connection with any
Securitization Transaction, provided that the Debt incurred in
connection with such Securitization Transaction shall be permitted
within the applicable provisions of this Agreement (including,
without limitation, under SECTIONS 10.1 and 10.2 hereof);
(f) Liens existing as of the date of the Closing and
described on SCHEDULE 5.1.15 hereto;
(g) Liens created or incurred after the date of the Closing
given to secure the payment of the purchase price incurred in
connection with the acquisition or purchase or the cost of
construction of property or of assets useful and intended to be
used in carrying on the business of the Parent Corporation or a
Subsidiary, whether or not such existing Liens were given to
secure the payment of the acquisition or purchase price or cost of
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construction, as the case may be, of the property or assets to
which they attach; provided that (i) the Lien shall attach solely
to the property or assets acquired, purchased or constructed, (ii)
such Lien shall have been created or incurred within 90 days of
the date of acquisition or purchase or completion of construction,
as the case may be, (iii) at the time of acquisition or purchase
or of completion of construction of such property or assets, the
aggregate amount remaining unpaid on all Debt secured by Liens on
such property or assets, whether or not assumed by the Parent
Corporation or a Subsidiary, shall not exceed an amount equal to
the lesser of the total purchase price or fair market value at the
time of acquisition or purchase (as determined in good faith by
the Board of Directors of the Parent Corporation) or the cost of
construction on the date of completion thereof, and (iv) at the
time of creation, issuance, assumption, guarantee or incurrence of
the Debt secured by such Lien and after giving effect thereto and
to the application of the proceeds thereof, no Default or Event of
Default would exist (including, without limitation, under SECTIONS
10.1 and 10.2 hereof);
(h) any Lien existing on property or assets of a
corporation at the time such corporation is consolidated with or
merged into the Parent Corporation or a Subsidiary or its becoming
a Subsidiary, or any Lien existing on any property or assets
acquired by the Parent Corporation or any Subsidiary at the time
such property or assets are so acquired (whether or not the Debt
secured thereby shall have been assumed), provided that (i) each
such Lien shall extend solely to the property or assets so
acquired, (ii) no such Lien shall have been created or assumed in
contemplation of such consolidation or merger or such Person's
becoming a Subsidiary or such acquisition of property and (iii) at
the time of creation, issuance, assumption, guarantee or
incurrence of the Debt secured by such Lien and after giving
effect thereto and to the application of the proceeds thereof, no
Default or Event of Default would exist (including, without
limitation, under SECTIONS 10.1 and 10.2 hereof);
(i) any extension, renewal or refunding of any Lien
permitted by the preceding clauses (f), (g) or (h) of this SECTION
10.5 in respect of the same property theretofore subject to such
Lien in connection with the extension, renewal or refunding of the
Debt secured thereby; provided that (i) such extension, renewal or
refunding of Debt shall be without increase in the principal
amount remaining unpaid as of the date of such extension, renewal
or refunding, (ii) such Lien shall attach solely to the same such
property, and (iii) at the time of such extension, renewal or
refunding and after giving effect thereto, no Default or Event of
Default would exist (including, without limitation, under SECTIONS
10.1 and 10.2 hereof); and
(j) Liens created or incurred after the date of the Closing
given to secure Debt of the Parent Corporation or any Subsidiary
in addition to the Liens permitted by the preceding clauses (a)
through (i) hereof; provided that at the time of creation,
issuance, assumption, guarantee or incurrence of the Debt secured
by such Lien and after giving effect thereto and to the
application of the proceeds thereof, no Default or Event of
Default would exist (including, without limitation, under SECTIONS
10.1 and 10.2 hereof).
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For the purposes of this SECTION 10.5, any Person becoming a Subsidiary after
the date of this Agreement shall be deemed to have incurred all of its then
outstanding Liens at the time it becomes a Subsidiary, and any Person extending,
renewing or refunding any Debt secured by any Lien shall be deemed to have
incurred such Lien at the time of such extension, renewal or refunding.
Section 10.6. Mergers, Consolidations and Sales of Assets. (a) The
Parent Corporation will not, and will not permit any Subsidiary to, consolidate
with or be a party to a merger with any other Person, or sell, lease or
otherwise dispose of all or substantially all of its assets; provided that:
(i) any Subsidiary may consolidate or merge with or into the
Parent Corporation or any Wholly-owned Subsidiary so long as:
(1) in any consolidation or merger involving the Parent
Corporation, the Parent Corporation shall be the surviving or
continuing corporation and, if such consolidation or merger
involves the Company, the due and punctual performance and
observation of all of the covenants in this Agreement and the
Notes to be performed or observed by the Company are expressly
assumed in writing by the Parent Corporation (pursuant to such
agreements and instruments as shall be reasonably satisfactory to
the Required Holders) and the Parent Corporation shall furnish to
the holders of the Notes an opinion of counsel satisfactory to
such holders to the effect that the instrument of assumption has
been duly authorized, executed and delivered and constitutes the
legal, valid and binding contract and agreement of the Parent
Corporation enforceable in accordance with its terms;
(2) in any consolidation or merger involving the Company
(and not the Parent Corporation), the Company shall be the
surviving or continuing corporation;
(3) in any consolidation or merger involving a Constituent
Company Guarantor (and not the Parent Corporation or the Company),
the Constituent Company Guarantor shall be the surviving or
continuing corporation;
(4) in any consolidation or merger involving a Wholly-owned
Subsidiary (and not the Parent Corporation, the Company or a
Constituent Company Guarantor), the Wholly-owned Subsidiary shall
be the surviving or continuing corporation, provided that, in the
case of a consolidation or merger involving a Wholly-owned
Subsidiary created solely for the purpose of effecting the
acquisition of an entity with no more than a de minimus capital
contribution from the Parent Corporation or another Subsidiary,
the survivor of the merger of such Wholly-owned Subsidiary and
target entity shall be a Subsidiary; and
(5) in each case, each of the Guarantors shall confirm in
writing its respective obligations under the Note Documents to
which it is a party and
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immediately prior and after giving effect to such consolidation or
merger, no Default or Event of Default would exist;
(ii) the Parent Corporation may consolidate or merge with or into
any other corporation if (1) the corporation which results from such
consolidation or merger (the "surviving corporation") is a Solvent
corporation organized under the laws of any state of the United States or
the District of Columbia, (2) the due and punctual performance and
observation of all of the covenants in this Agreement to be performed or
observed by the Parent Corporation are expressly assumed in writing by
the surviving corporation (pursuant to such agreements and instruments of
assumption as shall be reasonably satisfactory to the Required Holders)
and the surviving corporation shall furnish to the holders of the Notes
an opinion of counsel satisfactory to such holders to the effect that the
instrument of assumption has been duly authorized, executed and delivered
and constitutes the legal, valid and binding contract and agreement of
the surviving corporation enforceable in accordance with its terms, and
(3) immediately prior and after giving effect to such consolidation or
merger, no Default or Event of Default would exist;
(iii) the Parent Corporation may sell or otherwise dispose of all
or substantially all of its assets (other than Subsidiary Stock and Debt
of Subsidiaries which may only be sold or otherwise disposed of in
compliance with SECTION 10.6(C)) to any Person for consideration which
represents the fair market value of such assets (as determined in good
faith by the Board of Directors of the Parent Corporation) at the time of
such sale or other disposition if (1) the acquiring Person is a Solvent
corporation organized under the laws of any state of the United States or
the District of Columbia, (2) the due and punctual performance and
observance of all of the covenants in this Agreement to be performed or
observed by the Parent Corporation are expressly assumed in writing by
the acquiring corporation (pursuant to such agreements and instruments of
assumption as shall be reasonably satisfactory to the Required Holders)
and the acquiring corporation shall furnish to the holders of the Notes
an opinion of counsel satisfactory to such holders to the effect that the
instrument of assumption has been duly authorized, executed and delivered
and constitutes the legal, valid and binding contract and agreement of
such acquiring corporation enforceable in accordance with its terms,
except as enforcement of such terms may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles, (3) the Parent Corporation and each Constituent Company
Guarantor confirms in writing its obligations under this Agreement and
the Constituent Company Guaranty, respectively, and (4) immediately prior
and after giving effect to such sale or disposition, no Default or Event
of Default would exist;
(iv) the Company may sell or otherwise dispose of all or
substantially all of its assets (other than Subsidiary Stock and Debt of
its Subsidiaries which may only be sold or otherwise disposed of in
compliance with SECTION 10.6(C)) to any Person for consideration which
represents the fair market value of such assets (as determined in good
faith by the Board of Directors of the Parent Corporation) at the time of
such sale or other disposition if (1) the acquiring Person is a Solvent
corporation organized under the laws of any state of the United States or
the District of Columbia, (2) the due and
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punctual performance and observance of all of the covenants in this
Agreement and in the Notes to be performed or observed by the Company are
expressly assumed in writing by the acquiring corporation (pursuant to
such agreements and instruments of assumption as shall be reasonably
satisfactory to the Required Holders) and the acquiring corporation shall
furnish to the holders of the Notes an opinion of counsel satisfactory to
such holders to the effect that the instrument of assumption has been
duly authorized, executed and delivered and constitutes the legal, valid
and binding contract and agreement of such acquiring corporation
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles, and (3) immediately
prior and after giving effect to such sale or disposition, no Default or
Event of Default would exist; and
(v) any Subsidiary (other than the Company) may transfer or lease
all or substantially all of its assets in compliance with the provisions
of SECTION 10.6(B).
(b) The Parent Corporation will not, and will not permit any Subsidiary
to, sell, lease, transfer, abandon or otherwise dispose of assets; provided that
the foregoing restrictions do not apply to:
(i) assets sold, leased or transferred in the ordinary course of
business for fair market value, including such sale or other disposition
of obsolete or worn out property not necessary for operations; or
(ii) the sale, lease, transfer or other disposition of
substantially all of the assets of the Parent Corporation or the Company
as an entirety as provided in SECTION 10.6(A)(III) or SECTION
10.6(A)(IV), respectively; or
(iii) the sale, lease, transfer or other disposition of assets of
a Subsidiary to the Parent Corporation or a Wholly-owned Subsidiary; or
(iv) the sale or transfer of Receivables pursuant to one or more
Securitization Transactions, provided that at the time of such sale of
Receivables and after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing; or
(v) the sale of assets for cash or other property to a Person or
Persons other than an Affiliate if all of the following conditions are
met:
(1) such assets (valued at net book value) do not, together
with all other assets of the Parent Corporation and its
Subsidiaries previously disposed of during the immediately
preceding 12 months (other than in the ordinary course of
business), exceed 15% of Consolidated Total Assets determined as
of the end of the immediately preceding fiscal year; and
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(2) in the opinion of the Parent Corporation's Board of
Directors, the sale is for fair market value and is in the best
interests of the Parent Corporation and its Subsidiaries; and
(3) in the event such assets are Subsidiary Stock or Debt
of a Subsidiary, such sale shall comply with the requirements of
SECTION 10.6(C); and
(4) immediately prior and after the consummation of the
transaction and after giving effect thereto, no Default or Event
of Default would exist;
provided, however, that for purposes of the foregoing calculation,
there shall not be included any assets the proceeds of which were or
are applied within 365 days of the date of sale of such assets to the
acquisition of assets of a similar nature and useful and intended to be
used in the operation of the business of the Parent Corporation and its
Subsidiaries as described in SECTION 10.10 and having a fair market
value at least equal to that of the assets so disposed of.
(c) Subject in all events to SECTION 9.1.9, the Parent Corporation will
not sell, transfer or otherwise dispose of any Subsidiary Stock of a Subsidiary
(except to qualify directors or in connection with a consolidation or merger
permitted under SECTION 10.6(A)(I)) or any Debt of any Subsidiary, and will not
permit any Subsidiary to sell, transfer or otherwise dispose of any Subsidiary
Stock or Debt of any Subsidiary (other than to the Parent Corporation or a
Wholly-owned Subsidiary), unless:
(i) simultaneously with such sale, transfer or disposition, all
shares of Subsidiary Stock and all Debt of such Subsidiary at the time
owned by the Parent Corporation and by every other Subsidiary shall be
sold, transferred or disposed of as an entirety;
(ii) the Board of Directors of the Parent Corporation shall have
determined, as evidenced by a resolution thereof, that the proposed sale,
transfer or disposition of said shares of Subsidiary Stock and Debt is in
the best interest of the Parent Corporation;
(iii) said shares of Subsidiary Stock and Debt are sold,
transferred or otherwise disposed of to a Person on terms reasonably
deemed by the Board of Directors of the Parent Corporation to be adequate
and satisfactory;
(iv) the Subsidiary being disposed of shall not have any
continuing investment in the Parent Corporation or any other Subsidiary
not being simultaneously disposed of; and
(v) such sale, transfer or other disposition shall be treated as a
disposition under and shall satisfy the requirements of SECTION 10.6(B)
hereof.
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(d) The Parent Corporation will not permit any Subsidiary to issue any
Subsidiary Stock of such Subsidiary to any Person other than the Parent
Corporation or a Wholly-owned Subsidiary except to qualify directors.
Section 10.7. Transactions with Affiliates. The Parent Corporation will
not and will not permit any Subsidiary to enter into directly or indirectly any
Material transaction or Material group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate (other than the Parent
Corporation or another Subsidiary), except (x) in the ordinary course and
pursuant to the reasonable requirements of the Parent Corporation's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Parent Corporation or such Subsidiary than would be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate or (y)
transactions approved by a majority of the independent directors (as such term
is defined by the Exchange Act and the Rules and Regulations of the Nasdaq Stock
Market as in effect from time to time) of the Parent Corporation.
Section 10.8. Restrictive Agreements. The Parent Corporation will not,
and will not permit any of its Subsidiaries to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon the ability of any Subsidiary
to pay dividends or other distributions with respect to any shares of its
capital stock or to make or repay loans or advances to the Parent Corporation,
the Company or any other Subsidiary or to guaranty Debt of the Parent
Corporation, the Company or any other Subsidiary; or to transfer any of its
property or assets to the Parent Corporation, the Company or any other
Subsidiary, provided that the foregoing shall not apply to (i) restrictions and
conditions imposed by law or by this Agreement or any other Note Document, (ii)
the restrictions and conditions in the Credit Agreement as in effect on the date
of Closing (but shall apply to any amendment or modification expanding the scope
of, any such restriction or condition), and (iii) customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary or any
asset pending such sale, provided such restrictions and conditions apply only to
the Subsidiary or asset that is to be sold and such sale is permitted hereunder.
Section 10.9. Changes to Jurisdiction of Incorporation, Fiscal Year. The
Parent Corporation shall not, and shall not permit the Company, to change its
jurisdiction of incorporation as exists on the date of Closing. At all times,
the Parent Corporation and the Company shall have the same fiscal year end.
Section 10.10. Nature of Business. Neither the Parent Corporation nor any
Subsidiary will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Parent Corporation and its Subsidiaries would be substantially changed from
the general nature of the business engaged in by the Parent Corporation and its
Subsidiaries on the date of this Agreement.
SECTION 11. PARENT GUARANTY.
Section 11.1. Parent Guaranty. The Parent Corporation hereby absolutely
and unconditionally guarantees to the holders from time to time of the Notes:
(a) the full and prompt
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payment of the principal of all of the Notes and of the interest thereon at the
rate therein stipulated and the Make-Whole Amount (if any), when and as the same
shall become due and payable, whether by lapse of time, upon redemption or
prepayment, by extension or by acceleration or declaration, or otherwise
(including (to the extent legally enforceable) interest due on overdue payments
of principal, Make-Whole Amount (if any) or interest at the rate set forth in
the Notes), (b) the full and prompt performance and observance by the Company of
each and all of the obligations, covenants and agreements required to be
performed or observed by the Company under the terms of the Notes and this
Agreement, and (c) the full and prompt payment, upon demand by any holder of the
Notes, of all costs and expenses, legal or otherwise (including attorneys' fees)
and such expenses, if any, as shall have been expended or incurred in the
protection or enforcement of any right or privilege under the Notes or this
Agreement, including, without limitation, in any consultation or action in
connection therewith, and in each and every case irrespective of the validity,
regularity, or enforcement of any of the Notes or this Agreement or any of the
terms thereof or of any other like circumstance or circumstances. The guaranty
of the Notes herein provided for is a guaranty of the immediate and timely
payment of the principal and interest on the Notes and the Make-Whole Amount (if
any) as and when the same are due and payable and shall not be deemed to be a
guaranty only of the collectibility of such payments and that in consequence
thereof each holder of the Notes may sue the Parent Corporation directly upon
such principal, interest and Make-Whole Amount (if any) becoming so due and
payable.
Section 11.2. Obligations Absolute and Unconditional. The obligations of
the Parent Corporation under this Agreement shall be absolute and unconditional
and shall remain in full force and effect until the entire principal, interest
and Make-Whole Amount (if any) on the Notes and all other sums due pursuant to
SECTION 11.1 shall have been paid and such obligations shall not be affected,
modified or impaired upon the happening from time to time of any event,
including, without limitation, any of the following, whether or not with notice
to or the consent of the Parent Corporation:
(a) the power or authority or the lack of power or authority of
the Company to issue the Notes or to execute and deliver this Agreement,
and irrespective of the validity of the Notes or this Agreement or of any
defense whatsoever that the Company or any Constituent Company Guarantor
may or might have to the payment of the Notes (principal, interest and
Make-Whole Amount, if any) or to the performance or observance of any of
the provisions or conditions of this Agreement, or the existence or
continuance of the Company or any Constituent Company Guarantor as a
legal entity;
(b) any failure to present the Notes for payment or to demand
payment thereof, or to give the Company, the Parent Corporation or any
Constituent Company Guarantor notice of dishonor for non-payment of the
Notes, when and as the same may become due and payable, or notice of any
failure on the part of the Company to do any act or thing or to perform
or to keep any covenant or agreement by it to be done, kept or performed
under the terms of the Notes or this Agreement;
(c) the acceptance of any security or any guaranty, the advance of
additional money to the Company, any extension of the obligation of the
Notes, either indefinitely or for any period of time, or any other
modification in the obligation of the Notes, of this
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Agreement or the Constituent Company Guaranty or of the Company thereon,
or in connection therewith, or any sale, release, substitution or
exchange of any security;
(d) any act or failure to act with regard to the Notes or this
Agreement or anything which might vary the risk of the Company, the
Parent Corporation or any Constituent Company Guarantor;
(e) any action taken under this Agreement in the exercise of any
right or power thereby conferred or any failure or omission on the part
of any holder of any Note to first enforce any right or security given
under this Agreement or any failure or omission on the part of any holder
of any of the Notes to first enforce any right against the Company or any
Constituent Company Guarantor;
(f) the waiver, compromise, settlement, release or termination of
any or all of the obligations, covenants or agreements of the Company or
any Constituent Company Guarantor contained in this Agreement or the
Constituent Company Guaranty or of the payment, performance or observance
thereof;
(g) the failure to give notice to the Company, the Parent
Corporation or any Constituent Company Guarantor of the occurrence of any
Default or Event of Default under the terms and provisions of this
Agreement;
(h) the extension of the time for payment of any principal of, or
interest (or Make-Whole Amount, if any), on any Note owing or payable on
such Note or of the time of or for performance of any obligations,
covenants or agreements under or arising out of this Agreement or the
Constituent Company Guaranty, or the extension or the renewal of any
thereof;
(i) the modification or amendment (whether material or otherwise)
of any obligation, covenant or agreement set forth in this Agreement, the
Notes or the Constituent Company Guaranty;
(j) any failure, omission, delay or lack on the part of the
holders of the Notes to enforce, assert or exercise any right, power or
remedy conferred on the holders of the Notes in this Agreement or the
Constituent Company Guaranty or the Notes or any other act or acts on the
part of the holders from time to time of the Notes;
(k) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all the assets, marshalling of
assets and liabilities, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization or arrangement under
bankruptcy or similar laws, composition with creditors or readjustment
of, or other similar procedures affecting the Company, the Parent
Corporation or any Constituent Company Guarantor or any of the assets of
any of them, or any allegation or contest of the validity of this
Agreement or the Constituent Company Guaranty or the disaffirmance of
this Agreement or the Constituent Company Guaranty in any such proceeding
(it being understood that the obligations of the Parent
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Corporation under this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment made with
respect to the Notes is rescinded or must otherwise be restored or
returned by any holder of the Notes upon the insolvency, bankruptcy or
reorganization of the Company, the Parent Corporation or any Constituent
Company Guarantor, all as though such payment had not been made);
(l) any event or action that would, in the absence of this clause,
result in the release or discharge by operation of law of the Parent
Corporation from the performance or observance of any obligation,
covenant or agreement contained in this Agreement;
(m) the invalidity or unenforceability of the Notes, this
Agreement or any Constituent Company Guaranty;
(n) the invalidity or unenforceability of the obligations of the
Parent Corporation under this Agreement, the absence of any action to
enforce such obligations of the Parent Corporation, any waiver or consent
by the Parent Corporation with respect to any of the provisions hereof or
any other circumstances which might otherwise constitute a discharge or
defense by the Parent Corporation, including, without limitation, any
failure or delay in the enforcement of the obligations of the Parent
Corporation with respect to this Agreement or of notice thereof; or any
suit or other action brought by any shareholder or creditor of, or by,
the Parent Corporation or any other Person, for any reason, including,
without limitation, any suit or action in any way attacking or involving
any issue, matter or thing in respect of this Agreement, the Notes, the
Constituent Company Guaranty or any other agreement;
(o) the default or failure of the Company fully to perform any of
its covenants or obligations set forth in this Agreement;
(p) the impossibility or illegality of performance on the part of
the Company or any other Person of its obligations under the Notes, this
Agreement, the Constituent Company Guaranty or any other instruments;
(q) in respect of the Company, any Constituent Company Guarantor
or any other Person, any change of circumstances, whether or not foreseen
or foreseeable, whether or not imputable to the Company or any other
Person, or other impossibility of performance through fire, explosion,
accident, labor disturbance, floods, droughts, embargoes, wars (whether
or not declared), civil commotions, acts of God or the public enemy,
delays or failure of suppliers or carriers, inability to obtain
materials, action of any federal or state regulatory body or agency,
change of law or any other causes affecting performance, or other force
majeure, whether or not beyond the control of the Company or any other
Person and whether or not of the kind hereinbefore specified;
(r) any attachment, claim, demand, charge, Lien, order, process,
encumbrance or any other happening or event or reason, similar or
dissimilar to the foregoing, or any withholding or diminution at the
source, by reason of any taxes, assessments, expenses, indebtedness,
obligations or liabilities of any character, foreseen or unforeseen, and
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whether or not valid, incurred by or against any Person, or any claims,
demands, charges or Liens of any nature, foreseen or unforeseen, incurred
by any Person, or against any sums payable under this Agreement or the
Constituent Company Guaranty so that such sums would be rendered
inadequate or would be unavailable to make the payments herein provided;
(s) the failure of the Parent Corporation to receive any benefit
or consideration from or as a result of its execution, delivery and
performance of this Agreement;
(t) the failure of any Constituent Company Guarantor to receive
any benefit or consideration from or as a result of its execution,
delivery and performance of the Constituent Company Guaranty;
(u) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Parent Corporation in
respect of the obligations of the Parent Corporation under this
Agreement;
(v) any default, failure or delay, willful or otherwise, in the
performance by the Company, any Constituent Company Guarantor or any
other Person of any obligations of any kind or character whatsoever of
the Company, any Constituent Company Guarantor or any other Person
(including, without limitation, the obligations and undertakings of the
Company, any Constituent Company Guarantor or any other Person under the
Notes or this Agreement); or
(w) any order, judgment, decree, ruling or regulation (whether or
not valid) of any court of any nation or of any political subdivision
thereof or any body, agency, department, official or administrative or
regulatory agency of any thereof or any other action, happening, event or
reason whatsoever which shall delay, interfere with, hinder or prevent,
or in any way adversely affect, the performance by any party of its
respective obligations under the Notes, this Agreement, the Constituent
Company Guaranty or any instrument relating thereto;
provided that the specific enumeration of the above-mentioned acts, failures or
omissions shall not be deemed to exclude any other acts, failures or omissions,
though not specifically mentioned above, it being the purpose and intent of this
paragraph that the obligations of the Parent Corporation hereunder shall be
absolute and unconditional and shall not be discharged, impaired or varied
except by the payment to the holders thereof of the principal of, Make-Whole
Amount (if any) and interest on the Notes, and of all other sums due and owing
to the holders of the Notes pursuant to this Agreement, and then only to the
extent of such payments. Without limiting any of the other terms or provisions
hereof, it is understood and agreed that in order to hold the Parent Corporation
liable hereunder, there shall be no obligation on the part of any holder of any
Note to resort, in any manner or form, for payment, to the Company, to any
Constituent Company Guarantor or to any other Person or to the properties or
estates of any of the foregoing. All rights of the holder of any Note pursuant
thereto or to this Agreement may be transferred
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or assigned at any time or from time to time and shall be considered to be
transferred or assigned upon the transfer of such Note, whether with or without
the consent of or notice to the Parent Corporation, any Constituent Company
Guarantor or the Company. Without limiting the foregoing, it is understood that
repeated and successive demands may be made and recoveries may be had hereunder
as and when, from time to time, the Company shall default under the terms of the
Notes or this Agreement and that, notwithstanding recovery hereunder for or in
respect of any given default or defaults by the Company under the Notes or this
Agreement, the Parent Corporation's agreements under this SECTION 11 shall
remain in full force and effect and shall apply to each and every subsequent
default.
Section 11.3. Subrogation. To the extent of any payments made under this
Agreement, the Parent Corporation shall be subrogated to the rights of the
holder of the Notes receiving such payments, but the Parent Corporation
covenants and agrees that such right of subrogation shall be subordinate in
right of payment to the rights of any holders of the Notes for which full
payment has not been made or provided for and, to that end, the Parent
Corporation agrees not to claim or enforce any such right of subrogation or any
right of set-off or any other right which may arise on account of any payment
made by the Parent Corporation in accordance with the provisions of this
Agreement, including, without limitation, any right of reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of any holder of the Notes against the Company, the Parent
Corporation or any Constituent Company Guarantor, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive from the Company,
the Parent Corporation or any Constituent Company Guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Notes owned by Persons other than the Parent Corporation or any of
its affiliates and all other sums due or payable under this Agreement have been
fully and indefeasibly paid and discharged or payment therefor has been
provided. If any amount shall be paid to the Parent Corporation in violation of
the preceding sentence at any time prior to the indefeasible cash payment in
full in U.S. Dollars of the Notes and all other amounts payable under this
Agreement, such amounts shall be held in trust for the benefit of the holders of
the Notes and shall forthwith be paid to the holders of the Notes to be credited
and applied to the amounts due or to become due with respect to the Notes and
all other amounts payable under this Agreement, whether matured or unmatured.
Section 11.4. Preference. The Parent Corporation agrees that to the
extent the Company, any Constituent Company Guarantor or any other Person makes
any payment on the Notes, which payment or any part thereof is subsequently
invalidated, voided, declared to be fraudulent or preferential, set aside,
recovered, rescinded or is required to be retained by or repaid to a trustee,
liquidator, receiver or any other Person under any bankruptcy code, common law
or equitable cause, then and to the extent of such payment, the obligation or
the part thereof intended to be satisfied shall be revived and continued in full
force and effect with respect to the Parent Corporation's obligations hereunder,
as if said payment had not been made. The liability of the Parent Corporation
hereunder shall not be reduced or discharged, in whole or in part, by any
payment to any holder of the Notes from any source that is thereafter paid,
returned or refunded in whole or in part by reason of the assertion of a claim
of any kind relating thereto, including, but not limited to, any claim for
breach of contract, breach of warranty, preference, illegality, invalidity or
fraud asserted by any account debtor or by any other Person.
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Section 11.5. Marshalling. None of the holders of the Notes shall be
under any obligation (a) to marshall any assets in favor of the Parent
Corporation or in payment of any or all of the liabilities of the Company under
or in respect of the Notes or the obligation of the Parent Corporation hereunder
or (b) to pursue any other remedy that the Parent Corporation may or may not be
able to pursue itself and that may lessen the Parent Corporation's burden or any
right to which the Parent Corporation hereby expressly waives. The obligations
of the Parent Corporation under this Agreement rank pari passu in right of
payment with all other Debt (actual or contingent) of the Parent Corporation
which is not secured or the subject of any statutory trust or preference or
which is not expressly subordinated in right of payment to any other Debt.
Section 11.6. Subordination. The Parent Corporation agrees that all
obligations and liabilities of the Company and each other Subsidiary owing to
the Parent Corporation, including, without limitation, all intercompany loans
and receivables and other obligations of the Company and the other Subsidiaries
owing to the Parent Corporation (the "Intercompany Obligations"), shall be
subordinate and junior in right of payment to the prior indefeasible payment in
full of all obligations of the Company and each other Subsidiary owing to the
holders of the Notes under this Agreement, the Notes and the other Note
Documents.
The Parent Corporation shall execute such additional documents as the
Required Holders may reasonably request from time to time to evidence the
foregoing subordination.
SECTION 12. 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 Parent Corporation defaults in the performance of or
compliance with any term contained in SECTION 7.1(D) or SECTIONS 10.1
through 10.6, inclusive, or
(d) the Parent Corporation or 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 12) and
such default is not remedied within 30 days after the earlier of (i) a
Responsible Officer obtaining actual knowledge of such default and (ii)
the Parent Corporation 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
12); or
(e) any representation or warranty made in writing by or on behalf
of the Parent Corporation, the Company or any Constituent Company
Guarantor or by any
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officer of the Parent Corporation, the Company or any Constituent Company
Guarantor in this Agreement, the Constituent Company Guaranty or in any
writing furnished in connection with the transactions contemplated hereby
proves to have been false or incorrect in any material respect on the
date as of which made; or
(f) (i) the Parent Corporation or any Subsidiary (including the
Company or any Constituent Company Guarantor) is in default (as principal
or as guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest on any Debt that is outstanding
in an aggregate principal amount of at least $25,000,000 beyond any
period of grace provided with respect thereto, or (ii) the Parent
Corporation or any Subsidiary (including the Company or any Constituent
Company Guarantor) is in default in the performance of or compliance with
any term of any evidence of any Debt in an aggregate outstanding
principal amount of at least $25,000,000 or of any mortgage, indenture or
other agreement relating thereto or any other condition exists, and as a
consequence of such default or condition such Debt has become, or has
been declared (or one or more Persons are entitled to declare such Debt
to be), due and payable before its stated maturity or before its
regularly scheduled dates of payment, or (iii) as a consequence of the
occurrence or continuation of any event or condition (other than the
passage of time or the right of the holder of Debt to convert such Debt
into equity interests), (x) the Parent Corporation or any Subsidiary
(including the Company or any Constituent Company Guarantor) has become
obligated to purchase or repay Debt before its regular maturity or before
its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $25,000,000, or (y) one or more Persons have
the right to require the Parent Corporation or any Subsidiary (including
the Company or any Constituent Company Guarantor) so to purchase or repay
such Debt; or
(g) the Parent Guaranty provided in SECTION 11 or the Constituent
Company Guaranty shall cease to be in full force and effect for any
reason whatsoever (other than with the prior consent of the holders),
including, without limitation, a determination by a Governmental
Authority of competent jurisdiction that either such guaranty is invalid,
void or unenforceable or the Parent Corporation or any Constituent
Company Guarantor shall contest or deny in writing the validity or
enforceability of any of its obligations under the Parent Guaranty or the
Constituent Company Guaranty, as applicable; or
(h) the Parent Corporation or any Subsidiary (including without
limitation the Company or any Constituent Company Guarantor) (i) is
generally not paying, or admits in writing its inability to pay, its
debts as they become due, (ii) files, or consents by answer or otherwise
to the filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization, moratorium
or other similar law of any jurisdiction, (iii) makes an assignment for
the benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property,
(v) is adjudicated as insolvent or to be liquidated, or (vi) takes
corporate action for the purpose of any of the foregoing; or
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(i) a court or Governmental Authority of competent jurisdiction
enters an order appointing, without consent by the Parent Corporation or
any of its Subsidiaries (including, without limitation, the Company or
any Constituent Company Guarantor), a custodian, receiver, trustee or
other officer with similar powers with respect to it or with respect to
any substantial part of its property, or constituting an order for relief
or approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of the Parent Corporation or any
of its Subsidiaries (including without limitation the Company or any
Constituent Company Guarantor), or any such petition shall be filed
against the Parent Corporation or any of its Subsidiaries (including
without limitation the Company or any Constituent Company Guarantor) and
such petition shall not be dismissed within 60 days; or
(j) a final judgment or judgments for the payment of money
aggregating in excess of $50,000,000 are rendered against one or more of
the Parent Corporation and its Subsidiaries (including without limitation
the Company or any Constituent Company Guarantor) and which judgments are
not, within 30 days after entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within 30 days after the expiration
of such stay; or
(k) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under Section 412 of the Code, (ii) a notice of intent
to terminate any Plan shall have been or is reasonably expected to be
filed with the PBGC or the PBGC shall have instituted proceedings under
ERISA Section 4042 to terminate or appoint a trustee to administer any
Plan or the PBGC shall have notified the Parent Corporation 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 $10,000,000, (iv) the
Parent Corporation 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 Parent Corporation or any ERISA Affiliate
withdraws from any Multiemployer Plan, or (vi) the Parent Corporation 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 Parent Corporation or any Subsidiary
thereunder; and any such event or events described in clauses (i) through
(vi) above, either individually or together with any other such event or
events, could reasonably be expected to have a Material Adverse Effect.
As used in SECTION 12(K), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
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SECTION 13. REMEDIES ON DEFAULT, ETC.
Section 13.1. Acceleration. (a) If an Event of Default with respect to
the Parent Corporation or the Company described in paragraph (h) or (i) of
SECTION 12 (other than an Event of Default described in clause (i) of paragraph
(h) or described in clause (vi) of paragraph (h) by virtue of the fact that such
clause encompasses clause (i) of paragraph (h)) has occurred, all the Notes then
outstanding shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 50% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices to the
Parent Corporation and 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
12 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 Parent Corporation and the Company, declare
all the Notes held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this SECTION 13.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (i) all accrued and unpaid interest
thereon and (ii) 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 Parent
Corporation and the Company acknowledge, 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 13.2. 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 13.1, 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 13.3. Rescission. At any time after any Notes have been declared
due and payable pursuant to clause (b) or (c) of SECTION 13.1, the holders of
more than 50% in principal amount of the Notes then outstanding, by written
notice to the Parent Corporation and 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
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permitted by applicable law) any overdue interest in respect of the Notes, at
the Default Rate, (b) all Events of Default and Defaults, other than non-payment
of amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to SECTION 18, 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 13.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.
Section 13.4. 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 Parent Corporation and Company under
SECTION 16, the Parent Corporation and Company agree, jointly and severally, to
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 13, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
SECTION 14. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 14.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
Section 14.2. Transfer and Exchange of Notes. Upon surrender of any Note
at the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes of the same series (as
requested by the holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of EXHIBIT 1-A or 1-B, as applicable. Each such new
Note shall be dated and bear interest from the date to which interest shall have
been paid on the surrendered Note or dated the date of the surrendered Note if
no interest shall have been paid thereon. The Company may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect
of any such transfer of Notes. Notes shall not be transferred in denominations
of less than $500,000; provided that if necessary to enable the
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registration of transfer by a holder of its entire holding of Notes, one Note
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.
Section 14.3. 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 $75,000,000, 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 15. PAYMENTS ON NOTES.
Section 15.1. Place of Payment. Subject to SECTION 15.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Phoenix, Arizona, at the principal office of the
Company 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 15.2. Home Office Payment. So long as any Purchaser or such
Purchaser's nominee shall be the holder of any Note, and notwithstanding
anything contained in SECTION 15.1 or in such Note to the contrary, the Company
will pay all sums becoming due on such Note for principal, Make-Whole Amount, if
any, and interest by the method and at the address specified for such purpose
for such Purchaser on SCHEDULE A hereto or by such other method or at such other
address as such Purchaser shall have from time to time specified to the Company
in writing for such purpose, without the presentation or surrender of such Note
or the making of any notation thereon, except that upon written request of the
Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser 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 15.1. Prior to any sale or other disposition
of any Note held by any Purchaser or such Person's nominee, such Person will, at
its election, either endorse thereon the amount of principal paid thereon and
the last date to which interest has been paid thereon or
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surrender such Note to the Company in exchange for a new Note or Notes pursuant
to SECTION 14.2. The Company will afford the benefits of this SECTION 15.2 to
any Institutional Investor that is the direct or indirect transferee of any Note
purchased under this Agreement and that has made the same agreement relating to
such Note as is made in this SECTION 15.2.
SECTION 16. EXPENSES, ETC.
Section 16.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Parent Corporation and the Company
jointly and severally agree to pay all costs and expenses (including reasonable
attorneys' fees of one special counsel and, if reasonably required, local or
other counsel) incurred by each Purchaser and each other holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of this Agreement, the Notes or the Constituent
Company Guaranty (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 Notes or the Constituent Company Guaranty
or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement, the Notes or the
Constituent Company Guaranty, or by reason of being a holder of any Note, (b)
the costs and expenses, including financial advisors' fees, incurred in
connection with the insolvency or bankruptcy of the Parent Corporation or any
Subsidiary, (including, without limitation, the Company or any Constituent
Company Guarantor) or in connection with any work-out or restructuring of the
transactions contemplated hereby or by the Notes or the Constituent Company
Guaranty and (c) fees payable in connection with the initial filing of this
Agreement and all related documents and financial information with the
Securities Valuation Office of the National Association of Insurance
Commissioners (the "SVO") and all subsequent annual and interim filings of
documents and financial information related to this Agreement with the SVO or
any successor organization acceding to the authority thereof. The Parent
Corporation and the Company jointly and severally agree to pay, and to save each
Purchaser and each other holder of a Note harmless from, all claims in respect
of any fees, costs or expenses if any, of brokers and finders (other than those
retained by the Purchasers).
Section 16.2. Survival. The obligations of the Company under this SECTION
16 will survive the payment or transfer of any Note, the enforcement, amendment
or waiver of any provision of this Agreement, the Notes or the Constituent
Company Guaranty and the termination of this Agreement.
SECTION 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement, the Notes and the Constituent Company
Guaranty, the purchase or transfer by any Purchaser of any Note or portion
thereof or interest therein and the payment of any Note, and may be relied upon
by any subsequent holder of a Note, regardless of any investigation made at any
time by or on behalf of any Purchaser or any other holder of a Note. All
statements contained in any certificate or other instrument delivered by or on
behalf of the Parent Corporation, the Company or any Constituent Company
Guarantor pursuant to this
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Agreement or the Constituent Company Guaranty shall be deemed representations
and warranties of the Parent Corporation, the Company or a Constituent Company
Guarantor under this Agreement or the Constituent Company Guaranty, as the case
may be. Subject to the preceding sentence, this Agreement, the Notes and the
Constituent Company Guaranty embody the entire agreement and understanding among
the Purchasers, the Parent Corporation, the Company and the Constituent Company
Guarantors and supersede all prior agreements and understandings relating to the
subject matter hereof.
SECTION 18. AMENDMENT AND WAIVER.
Section 18.1. 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
Parent Corporation and 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 22
hereof, or any defined term (as it is used therein), will be effective as to as
to any holder of Notes unless consented to by such holder 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 13 relating to acceleration or rescission, change the amount or time of
any prepayment or payment of principal of, or change 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, (iii)
amend any of SECTIONS 8, 12(A), 12(B), 13, 18 or 21, or (iv) reduce or alter the
scope of the Guaranty contained in SECTION 11.
Section 18.2. Solicitation of Holders of Notes.
(a) Solicitation. The Parent Corporation and 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, of the Constituent Company Guaranty or of the Notes. The
Parent Corporation and the Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this SECTION 18 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. Neither the Parent Corporation nor the Company will directly
or indirectly pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any security, to
any holder of Notes as consideration for or as an inducement to the entering
into by any holder of Notes of any waiver or amendment of any of the terms and
provisions hereof unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder of Notes then
outstanding even if such holder did not consent to such waiver or amendment.
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Section 18.3. Binding Effect, Etc. Any amendment or waiver consented to
as provided in this SECTION 18 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Parent
Corporation and 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 Parent Corporation, 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 18.4. 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, the Constituent
Company Guaranty 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 Parent Corporation or the
Company or any of their respective Affiliates shall be deemed not to be
outstanding.
SECTION 19. 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 a Purchaser or such Purchaser's nominee, to such
Purchaser or such Purchaser's nominee at the address specified for such
communications in SCHEDULE A to this Agreement, or at such other address
as such Purchaser or such Purchaser's nominee shall have specified to the
Company in writing,
(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,
(iii) if to the Company, to the Company at its address set forth
at the beginning hereof to the attention of Chief Financial Officer, or
at such other address as the Company shall have specified to the holder
of each Note in writing, or
(iv) if to the Parent Corporation, to the Parent Corporation at
its address set forth at the beginning hereof to the attention of Chief
Financial Officer, or at such other address as the Parent Corporation
shall have specified to the holder of each Note in writing.
Notices under this SECTION 19 will be deemed given only when actually received.
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SECTION 20. REPRODUCTION OF DOCUMENTS.
This Agreement and the Constituent Company Guaranty and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications that may hereafter be executed, (b) documents
received by each Purchaser at the Closing (except the Notes themselves),
and (c) financial statements, certificates and other information
previously or hereafter furnished to each Purchaser, may be reproduced by
such Purchaser by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and such Purchaser may
destroy any original document so reproduced. The Parent Corporation and
the Company agree and stipulate 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 any Purchaser in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This SECTION 20 shall not prohibit
the Parent Corporation, 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
or incompleteness of any such reproduction.
SECTION 21. CONFIDENTIAL INFORMATION.
For the purposes of this SECTION 21, "Confidential Information" means
information delivered to any Purchaser by or on behalf of the Parent Corporation
or any Subsidiary (including, without limitation, the Company) 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 such Purchaser as
being confidential information of the Parent Corporation or such Subsidiary;
provided that such term does not include information that (a) was publicly known
or otherwise known to such Purchaser prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such Purchaser
or any Person acting on such Purchaser's behalf, (c) otherwise becomes known to
such Purchaser other than through disclosure by the Parent Corporation or any
Subsidiary (including, without limitation, the Company) or (d) constitutes
financial statements delivered to such Purchaser under SECTION 7.1 that are
otherwise publicly available. Each Purchaser will maintain the confidentiality
of such Confidential Information in accordance with procedures adopted by such
Purchaser in good faith to protect confidential information of third parties
delivered to such Purchaser; provided that such Purchaser may deliver or
disclose Confidential Information to (i) such Purchaser's directors, trustees,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by such Purchaser's Notes, (ii) such Purchaser's financial advisors
and other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this SECTION 21, (iii)
any other holder of any Note, (iv) any Institutional Investor to which such
Purchaser sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this SECTION
21), (v) any Person from which such Purchaser offers to purchase any security of
the Parent Corporation or the Company (if such Person has agreed in writing
prior to its receipt of such
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Confidential Information to be bound by the provisions of this SECTION 21), (vi)
any Federal or state regulatory authority having jurisdiction over such
Purchaser, (vii) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that requires
access to information about such Purchaser's investment portfolio or (viii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to such Purchaser, (x) in response to any subpoena or other legal
process, (y) in connection with any litigation to which such Purchaser is a
party or (z) if an Event of Default has occurred and is continuing, to the
extent such Purchaser may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the
rights and remedies under such Purchaser's Notes, this Agreement or the
Constituent Company Guaranty. 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 21 as though it were a party to this Agreement. On
reasonable request by the Parent Corporation or 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 Parent Corporation and the Company embodying the
provisions of this SECTION 21.
SECTION 22. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of such
Purchaser's Affiliates as the purchaser of the Notes that such Purchaser has
agreed to purchase hereunder, by written notice to the Parent Corporation and
the Company, which notice shall be signed by both such Purchaser 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 "Purchaser" is used in this Agreement (other
than in this SECTION 22), such word shall be deemed to refer to such Affiliate
in lieu of such Purchaser. In the event that such Affiliate is so substituted as
a purchaser hereunder and such Affiliate thereafter transfers to such Purchaser
all of the Notes then held by such Affiliate, upon receipt by the Company of
notice of such transfer, wherever the word "Purchaser" is used in this Agreement
(other than in this SECTION 22), such word shall no longer be deemed to refer to
such Affiliate, but shall refer to such Purchaser, and such Purchaser shall have
all the rights of an original holder of the Notes under this Agreement.
SECTION 23. MISCELLANEOUS.
Section 23.1. 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 23.2. 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
-49-
succeeding Business Day without including the additional days elapsed in the
computation of the interest payable on such next succeeding Business Day.
Section 23.3. 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 23.4. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
Section 23.5. 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 23.6. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW
OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION
OTHER THAN SUCH STATE.
Section 23.7. Submission to Jurisdiction. The Parent Corporation and the
Company hereby irrevocably submit and consent to the jurisdiction of the Federal
court for the Southern District of New York located within the County of New
York, State of New York (or if such court lacks jurisdiction, the state courts
located therein), and irrevocably agree that all actions or proceedings relating
to this Agreement and the Notes may be litigated in such courts, and the Parent
Corporation and the Company waive any objection which either of them may have
based on improper venue or forum non conveniens to the conduct of any proceeding
in any such court and waives personal service of any and all process upon it,
and consents that all such service of process be made by delivery to it at the
address of the Parent Corporation or the Company, as the case may be, set forth
in SECTION 19 above and that service so made shall be deemed to be completed
upon actual receipt. The Parent Corporation and the Company agree that a final
judgment in any such suit, action or proceeding shall be conclusive and may be
enforced in any manner provided by law or equity. Nothing contained in this
Section shall affect the right of any holder of Notes to serve legal process in
any other manner permitted by law or to bring any action or proceeding in the
courts of any jurisdiction against the Parent Corporation or the Company or to
enforce a judgment obtained in the courts of any other jurisdiction.
* * * * *
-50-
The execution hereof by the Purchasers shall constitute a contract among
the Parent Corporation, the Company and the Purchasers for the uses and purposes
hereinabove set forth. This Agreement may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together only one agreement.
Very truly yours,
SWIFT TRANSPORTATION CO., INC., an Arizona
corporation
By________________________________________
Name:
Title:
SWIFT TRANSPORTATION CO., INC., a Nevada
corporation
By________________________________________
Name:
Title:
Accepted as of June ____, 2003.
[VARIATION]
By________________________________________
Name:
Title:
-51-
SCHEDULE B
(to Note Purchase Agreement)
DEFINED TERMS
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
"Acquisition" means an acquisition or purchase of (in one transaction or a
series of transactions) any other Person, all or substantially all assets of any
Person or any assets of any other Person that constitute a business unit.
"Affiliate" means, at any time, (a) with respect to any Person, any other
Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) with respect to the Parent Corporation, any Person
beneficially owning or holding, directly or indirectly, 10% or more of any class
of voting or equity interests of the Parent Corporation or any Subsidiary or any
corporation of which the Parent Corporation and its Subsidiaries beneficially
own or hold, in the aggregate, directly or indirectly, 10% or more of any class
of voting or equity interests. As used in this definition, "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Unless the context
otherwise clearly requires, any reference to an "Affiliate" is a reference to an
Affiliate of the Parent Corporation.
"Business Day" means (a) for the purposes of SECTION 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Phoenix, Arizona or New York, New York are
required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capital Lease Obligations" of any Person shall mean all obligations of
such Person to pay rent or other amounts under any Capital Lease (or other
arrangement conveying the right to use) of real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as Capital Leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Closing" is defined in SECTION 3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Company" means Swift Transportation Co., Inc., an Arizona corporation, as
issuer of the Notes hereunder, and any successor thereto pursuant to the terms
hereof.
SCHEDULE B
(to Note Purchase Agreement)
"Confidential Information" is defined in SECTION 21.
"Consolidated EBITDA" means, for the Parent Corporation and its
Subsidiaries for any period, an amount equal to the sum of (a) Consolidated Net
Income for such period plus (b) to the extent deducted in determining
Consolidated Net Income for such period, (i) Consolidated Interest Expense, (ii)
income tax expense determined on a consolidated basis in accordance with GAAP,
(iii) depreciation and amortization determined on a consolidated basis in
accordance with GAAP, and (iv) all other non-cash charges acceptable to the
Required Holders, determined on a consolidated basis in accordance with GAAP, in
each case for such period; provided, however, that the Consolidated Net Income,
Consolidated Interest Expense, income tax expense, depreciation, amortization
and other non-cash charges of any Person or assets acquired in any Material
Acquisition during such period that accrue prior to the date such Person becomes
a Subsidiary or is merged into or consolidated with the Parent Corporation or
any Subsidiary, or such assets are acquired by the Parent Corporation or any
Subsidiary, shall be included within Consolidated EBITDA, as if the Material
Acquisition had been consummated on the first day of such period.
"Consolidated EBITDAR" means, for the Parent Corporation and its
Subsidiaries for any period, an amount equal to the sum of (a) Consolidated
EBITDA for such period plus (b) Consolidated Lease Expense for such period.
"Consolidated Fixed Charges" means, for the Parent Corporation and its
Subsidiaries for any period, the sum (without duplication) of (a) Consolidated
Interest Expense for such period, plus (b) Consolidated Lease Expense for such
period.
"Consolidated Interest Expense" means, for the Parent Corporation and its
Subsidiaries for any period determined on a consolidated basis in accordance
with GAAP, the sum of (a) total interest expense, including without limitation
the interest component of any payments in respect of Capital Lease Obligations
capitalized or expensed during such period (whether or not actually paid during
such period) plus (b) the net amount payable (or minus the net amount
receivable) under Hedging Transactions during such period (whether or not
actually paid or received during such period).
"Consolidated Lease Expense" means, for the Parent Corporation and its
Subsidiaries for any period, the aggregate amount of fixed and contingent
rentals payable with respect to leases of real and personal property (excluding
Capital Lease Obligations) determined on a consolidated basis in accordance with
GAAP for such period.
"Consolidated Net Income" means, for the Parent Corporation and its
Subsidiaries for any period, the net income (or loss) of the Parent Corporation
and its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP, but excluding therefrom (to the extent otherwise included
therein) (a) any extraordinary gains or losses, (b) any gains attributable to
write-ups of assets, and (c) any equity interest of the Parent Corporation or
any Subsidiary of the Parent Corporation in the unremitted earnings or losses of
any Person that is not a Subsidiary, other than any equity interest in the
unremitted earnings or losses of Transplace or Trans-Mex and (d) any income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary or is
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merged into or consolidated with the Parent Corporation or any Subsidiary or the
date that such Person's assets are acquired by the Parent Corporation or any
Subsidiary.
"Consolidated Tangible Net Worth" shall mean, as of any date, (a) the
total assets of the Parent Corporation and its Subsidiaries that would be
reflected on the Parent Corporation's consolidated balance sheet as of such date
prepared in accordance with GAAP, after eliminating all amounts properly
attributable to Minority Interests, if any, in the stock and surplus of
Subsidiaries, minus (b) the sum of (x) the total liabilities of the Parent
Corporation and its Subsidiaries that would be reflected on the Parent
Corporation's consolidated balance sheet as of such date prepared in accordance
with GAAP, (y) the amount of any write-up in the book value of any assets
resulting from a revaluation thereof or any write-up in excess of the cost of
such assets acquired reflected on the consolidated balance sheet of the Parent
Corporation as of such date prepared in accordance with GAAP and (z) the net
book amount of all assets of the Parent Corporation and its Subsidiaries that
would be classified as intangible assets on a consolidated balance sheet of the
Parent Corporation as of such date prepared in accordance with GAAP.
"Consolidated Total Assets" means, as of any date of determination, the
total amount of all assets of the Parent Corporation and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Capitalization" means, at any time, the sum of
Consolidated Tangible Net Worth and Consolidated Total Debt at such time.
"Consolidated Total Debt" means, at any time, all Debt (excluding Hedging
Obligations) of the Parent Corporation and its Subsidiaries that would be
reflected on a consolidated balance sheet of the Parent Corporation prepared in
accordance with GAAP at such time, including Securitization Obligations of any
SPE Subsidiary whether or not such SPE Subsidiary is consolidated with the
Parent Corporation under GAAP.
"Constituent Company" means and includes each Subsidiary of the Parent
Corporation or the Company.
"Constituent Company Guarantors" is defined in SECTION 2.2(B). On the date
of Closing, the Constituent Company Guarantors shall be (a) Swift Corporation,
(b) Swift Leasing Co., Inc., an Arizona corporation, (c) M.S. Carriers, Inc., a
Tennessee corporation and (d) M.S. Carriers Warehousing & Distribution, Inc., a
Tennessee corporation.
"Constituent Company Guaranty" means any Guaranty of any Constituent
Company with respect to the payment of the Notes and all other sums due and
owing by the Company under this Agreement, which Guaranty shall be in form and
substance reasonably satisfactory to the Required Holders.
"Credit Agreement" means that certain Revolving Credit Agreement, dated as
of November 21, 2002, among the Company, the Parent Corporation, SunTrust Bank,
as administrative agent, Wells Fargo Bank, N.A., and KeyBank National
Association, as co-syndication agents, U.S. Bank National Association and
LaSalle Bank National Association, as
B-3
co-documentation agents, and certain lenders from time to time party thereto, as
amended, modified, supplemented, refinanced or replaced, in whole or in part,
from time to time.
"Debt" with respect to any Person means, at any time, without duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of Redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including all liabilities created or
arising under any conditional sale or other title retention agreement with
respect to any such property);
(c) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities); and
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account
by banks and other financial institutions (whether or not representing
obligations for borrowed money);
(f) Hedging Obligations of such Person;
(g) Off-Balance Sheet Liabilities of such Person;
(h) Securitization Obligations of such Person; and
(i) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (h) hereof.
Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through (i) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under GAAP.
"Default" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
"Default Rate" means, with respect to Notes of either series, that rate of
interest that is the greater of (i) 2.0% per annum above the rate of interest
stated in clause (a) of the first paragraph of the Note of such series or (ii)
2.0% over the rate of interest publicly announced by The Bank of New York (or
its successor) in New York, New York as its "base" or "prime" rate.
B-4
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Parent
Corporation under Section 414 of the Code.
"Event of Default" is defined in SECTION 12.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Parent Corporation or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Parent Corporation
or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guarantor" means, individually, the Parent Corporation or any Constituent
Company Guarantor, as the context requires, and "Guarantors" means,
collectively, the Parent Corporation and the Constituent Company Guarantors.
"Guaranty" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Debt, dividend or other obligation of any other Person in any manner, whether
directly or indirectly, including (without limitation) obligations incurred
through an agreement, contingent or otherwise, by such Person:
B-5
(a) to purchase such Debt or obligation or any property constituting
security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such Debt or obligation, or (ii) to maintain any working capital or other
balance sheet condition or any income statement condition of any other
Person or otherwise to advance or make available funds for the purchase or
payment of such Debt or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Debt or obligation
of the ability of any other Person to make payment of the Debt or
obligation; or
(d) otherwise to assure the owner of such Debt or obligation against
loss in respect thereof.
In any computation of the Debt or other liabilities of the obligor under any
Guaranty, the Debt or other obligations that are the subject of such Guaranty
shall be assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances, including all substances listed in or regulated
in any Environmental Law, that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, regulated, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"Hedging Obligations" of any Person shall mean any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired under (a) any and all Hedging
Transactions, (b) any and all cancellations, buy backs, reversals, terminations
or assignments of any Hedging Transactions and (c) any and all renewals,
extensions and modifications of any Hedging Transactions and any and all
substitutions for any Hedging Transactions.
"Hedging Transaction" of any Person means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into by such
Person that is a rate swap, basis swap, forward rate transaction, commodity
swap, interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collateral transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of these
transactions) or any combination thereof, whether linked to one or more interest
rates, foreign currencies, commodity prices, equity prices or other financial
measures.
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to SECTION
14.1.
B-6
"Institutional Investor" means (a) any original purchaser of a Note, (b)
any holder of a Note holding more than 5% of the aggregate principal amount of
the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Intercompany Obligations" is defined in SECTION 11.6.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in SECTION 8.6.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Parent
Corporation and its Subsidiaries (including, without limitation, the Company and
any Constituent Company Guarantor), taken as a whole.
"Material Acquisition" means an Acquisition of (a) a Person that, after
giving effect to such Acquisition, would constitute a Material Subsidiary or (b)
assets that, if such assets were deemed to be acquired by a newly-formed
Subsidiary with no other assets, liabilities or operations, such Subsidiary
would constitute a Material Subsidiary.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets, properties or
prospects of the Parent Corporation and its Subsidiaries (including, without
limitation, the Company and any Constituent Company Guarantor), taken as a
whole, or (b) the ability of the Company to perform its obligations under this
Agreement and the Notes, or (c) the ability of the Parent Corporation to perform
its obligations under the Parent Guaranty, or (d) the validity or enforceability
of this Agreement (including, without limitation, the Parent Guaranty), the
Notes or the Constituent Company Guaranty.
"Material Subsidiary" means any Subsidiary, existing on the date of the
Closing or created or acquired thereafter, if (a) the portion of gross revenues
or Consolidated Net Income which was contributed by such Subsidiary during the
12-month period ending on the last day of the immediately preceding fiscal
quarter of the Parent Corporation equals or exceeds 5% of gross revenues or
Consolidated Net Income, respectively, for such 12-month period, or (b) the
assets of such Subsidiary as at the end of the immediately preceding fiscal
quarter of the Parent Corporation equal or exceed 5% of Consolidated Total
Assets as of the end of such fiscal quarter, or (c) such Subsidiary is a
"Material Subsidiary" under the Credit Agreement.
"Memorandum" is defined in SECTION 5.1.3.
B-7
"Minority Interests" means any shares of stock of any class of a
Subsidiary (other than directors' qualifying shares as required by law) that are
not owned by the Parent Corporation and/or one or more of its Subsidiaries.
Minority Interests shall be valued by valuing Minority Interests constituting
preferred stock at the voluntary or involuntary liquidating value of such
preferred stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and surplus applicable
thereto adjusted, if necessary, to reflect any changes from the book value of
such common stock required by the foregoing method of valuing Minority Interests
in preferred stock.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA).
"Non-U.S. Pension Plan" means any plan, fund, or other similar program
established or maintained outside the United States of America by the Parent
Corporation or any one or more of its Subsidiaries primarily for the benefit of
employees of the Parent Corporation or such Subsidiary residing outside the
United States of America, which plan, fund or other similar program provides for
retirement income for such employees or a deferral of income for such employees
in contemplation of retirement and is not subject to ERISA or the Code.
"Note Documents" means and includes means this Agreement (including the
Schedules and Exhibits hereto), the Notes, the Constituent Company Guaranty and
all other instruments, agreements, Guaranties, documents and writings executed
in connection with any of the foregoing, including, without limitation,
agreements that provide for credit support or other collateral security for any
of the obligations arising in connection with any of the foregoing.
"Notes" is defined in SECTION 1.
"Off-Balance Sheet Liabilities" of any Person shall mean (a) any
repurchase obligation or liability of such Person with respect to accounts or
notes receivable sold by such Person, (b) any liability of such Person under any
sale and leaseback transactions that do not create a liability on the balance
sheet of such Person, (c) any Synthetic Lease Obligation, (d) Securitization
Obligations which do not constitute a liability on the balance sheet of such
Person or (e) any obligation arising with respect to any other transaction
(including a Securitization Transaction) which is the functional equivalent of
or takes the place of borrowing but which does not constitute a liability on the
balance sheet of such Person.
"Officer's Certificate" means a certificate of a Senior Financial Officer
or of any other officer of the Parent Corporation or the Company whose
responsibilities extend to the subject matter of such certificate.
"Parent Corporation" means Swift Transportation Co., Inc., a Nevada
corporation, and any successor thereto pursuant to the terms hereof.
"Parent Guaranty" is defined in SECTION 2.2(A).
B-8
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in Section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Parent Corporation or any ERISA
Affiliate or with respect to which the Parent Corporation or any ERISA Affiliate
may have any liability.
"Preferred Stock" means any class of capital stock of a corporation that
is preferred over any other class of capital stock of such corporation as to the
payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"Priority Debt" means (a) all Debt of the Parent Corporation, Swift
Corporation and the Company secured by Liens created, incurred or outstanding
pursuant to SECTIONS 10.5(F), 10.5(I) (to the extent that such Debt refinances
Debt permitted by SECTION 10.5(F)) and 10.5(J), and (b) all Debt of the Parent
Corporation's Subsidiaries, except for:
(i) unsecured Debt of Swift Corporation and the Company;
(ii) the Constituent Company Guaranties;
(iii) unsecured Guaranties of Subsidiaries issued in favor of the
lenders pursuant to the terms of the Credit Agreement, provided that
substantially similar Constituent Company Guaranties are delivered to the
holders of the Notes pursuant to the requirements of SECTION 9.1.8;
(iv) unsecured Guaranties of Subsidiaries issued in favor of other
third-party creditors guaranteeing Debt of the Parent Corporation or the
Company which is permitted by the applicable terms of this Agreement,
provided that substantially similar Constituent Company Guaranties are
substantially concurrently delivered to the holders of the Notes or are
otherwise in effect from each such guaranteeing Subsidiary;
(v) Debt and Redeemable Preferred Stock owing to the Parent
Corporation or Wholly-owned Subsidiaries; and
(vi) Securitization Obligations of Swift Receivables Co., Inc., a
Delaware corporation, or its successors that are SPE Subsidiaries or
another SPE Subsidiary, whether or not consolidated with the Parent
Corporation under GAAP, in an amount not to exceed $200,000,000 at anytime
outstanding, provided, that such Securitization Obligations are otherwise
permitted by SECTION 10.1 and each other applicable term of this
Agreement.
B-9
"property" or "properties" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.
"Purchasers" is defined in the first paragraph of this Agreement.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14 issued
by the United States Department of Labor.
"Receivables" means accounts receivable (including, without limitation,
all rights to payment created or arising from the sales of goods, leases of
goods or the rendition of services, no matter how evidenced and whether or not
earned by performance).
"Redeemable" means, with respect to the capital stock of any Person, each
share of such Person's capital stock that is:
(a) redeemable, payable or required to be purchased or otherwise
retired or extinguished, or convertible into Debt of such Person (i) at a
fixed or determinable date, whether by operation of sinking fund or
otherwise, (ii) at the option of any Person other than such Person, or
(iii) upon the occurrence of a condition not solely within the control of
such Person; or
(b) convertible into other Redeemable capital stock.
"Required Holders" means, at any time, the holders of more than 50% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Parent Corporation or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Parent Corporation or the Company with responsibility for the
administration of the relevant portion of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Securitization Obligations" means, with respect to any Person, all
payment and repayment obligations of such Person undertaken in connection with a
Securitization Transaction.
"Securitization Transaction" means any transfer by the Company or any
Subsidiary of Receivables or interests therein and all collateral securing such
Receivables, all contracts and contract rights and all guarantees or other
obligations in respect of such Receivables, all other assets that are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving such Receivables and all proceeds of any of the foregoing (a) to a
trust, partnership, limited liability company, corporation or other entity
(other than the Company or a Subsidiary which is not a SPE Subsidiary), which
transfer is funded in whole or in part, directly or indirectly, by the
incurrence or issuance by the transferee or any successor transferee of Debt or
other securities that are to receive payments
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from, or that represent interests in, the cash flow derived from such
Receivables or interests in Receivables, which Debt and securities are, for
purposes of this Agreement, included in Consolidated Total Debt, or (b) directly
to one or more investors or other purchasers (other than the Company or any
Subsidiary), in a transaction which is not of a type described in (a) above,
and, in the case of both (a) and (b) above, which are in the good faith opinion
of a Senior Financial Officer of the Parent Corporation for fair value and in
the best interests of the Parent Corporation and its Subsidiaries. The "amount"
or "principal amount" of any Securitization Obligations arising in connection
with any Securitization Transaction shall be deemed at any time to be (x) in the
case of a transaction described in clause (a) of the preceding sentence, the
aggregate principal or stated amount of the Debt or other securities referred to
in such clause or, if there shall be no such principal or stated amount, the
uncollected amount of the Receivables transferred pursuant to such
Securitization Transaction net of any such Receivables that have been written
off as uncollectible, and (y) in the case of a transaction described in clause
(b) of the preceding sentence, the aggregate outstanding principal amount of the
Debt, if any, secured by Liens on the subject Receivables.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Parent Corporation or the
Company, as applicable.
"Series A Notes" is defined in SECTION 1.
"Series B Notes" is defined in SECTION 1.
"Solvent" means, when used with respect to any Person, that at the time of
determination: (a) the fair value of its assets (both at fair valuation and at
present fair saleable value on an orderly basis) is in excess of the total
amount of its liabilities, including contingent obligations, and (b) it is then
able and expects to be able to pay its debt as they mature, and (c) it has
capital sufficient to carry on its business as conducted and as proposed to be
conducted.
"SPE Subsidiary" means any Subsidiary formed solely for the purpose of,
and that engages only in, one or more Securitization Transactions.
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Parent Corporation.
"Subsidiary Stock" means, with respect to any Person, the stock,
membership interests or other equity interests (or any options or warrants to
purchase stock, membership interests or
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other equity interests or other Securities exchangeable for or convertible into
stock, membership interests or other equity interests) of any Subsidiary of such
Person.
"Swift Corporation" means Swift Transportation Corporation, a Nevada
corporation and direct owner and holder of 100% of the issued and outstanding
stock of the Company.
"Synthetic Lease" means a lease transaction under which the parties intend
that (a) the lease will be treated as an "operating lease" by the lessee
pursuant to Statement of Financial Accounting Standards No. 13, as amended and
(b) the lessee will be entitled to various tax and other benefits ordinarily
available to owners (as opposed to lessees) of like property.
"Synthetic Lease Obligations" shall means, with respect to any Person, the
sum of (a) all remaining rental obligations of such Person as lessee under
Synthetic Leases which are attributable to principal and, without duplication,
(b) all rental and purchase price payment obligations of such Person under such
Synthetic Leases assuming such Person exercises the option to purchase the
leased property at the end of the lease term.
"Trans-Mex" means Trans-Mex, Inc. S.A. de C.V., a Mexican corporation in
which, as of the date of Closing, the Parent Corporation and its Subsidiaries
own a 49% equity interest.
"Transplace" means Transplace.com LLC, a Nevada limited liability company
in which, as of the date of Closing, the Parent Corporation and its Subsidiaries
own a 29% equity interest.
"Wholly-owned Subsidiary" means, at any time, any Subsidiary one hundred
percent (100%) of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the Parent
Corporation and the Parent Corporation's other Wholly-owned Subsidiaries at such
time.
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