Exhibit 10.1
OIL-DRI CORPORATION OF AMERICA
$15,000,000
5.89% SENIOR NOTES DUE OCTOBER 15, 2015
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NOTE AGREEMENT
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Dated as of December 16, 2005
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TABLE OF CONTENTS
(Not Part of Agreement)
Page
1. AUTHORIZATION OF ISSUE OF NOTES...................................................................1
2. PURCHASE AND SALE OF NOTES........................................................................1
3. CONDITIONS OF CLOSING.............................................................................2
3A. Documents................................................................................2
3B. Opinion of Purchasers' Special Counsel...................................................3
3C. Opinion of Company's and Guarantors' Counsel.............................................3
3D. Representations and Warranties; No Default; Satisfaction of Conditions...................3
3E. Purchase Permitted By Applicable Laws; Approvals.........................................4
3F. Material Adverse Change..................................................................4
3G. Fees and Expenses........................................................................4
3H. Proceedings..............................................................................4
4. PREPAYMENTS.......................................................................................4
4A. Required Prepayments.....................................................................4
4B. Optional Prepayment With Yield-Maintenance Amount........................................5
4C. Notice of Optional Prepayment............................................................5
4D. Partial Payments Pro Rata................................................................5
4E. Acquisition of Notes.....................................................................5
5. AFFIRMATIVE COVENANTS.............................................................................6
5A. Financial Statements.....................................................................6
5B. Officer's Certificate....................................................................8
5C. Inspection...............................................................................9
5D. Restricted Subsidiaries..................................................................9
5E. Compliance with Law......................................................................9
5F. Insurance................................................................................9
5G. Maintenance of Properties...............................................................10
5H. Payment of Taxes and Claims.............................................................10
5I. Corporate Existence, etc................................................................10
5J. Ranking.................................................................................10
5K. Additional Guarantors...................................................................10
6. NEGATIVE COVENANTS...............................................................................11
6A. Financial Covenants.....................................................................11
6A(1). Fixed Charges Coverage Ratio............................................................11
6A(2). Consolidated Debt.......................................................................11
6A(3). Consolidated Adjusted Net Worth.........................................................11
6B. Debt of Restricted Subsidiaries.........................................................11
6C. Liens...................................................................................12
TABLE OF CONTENTS
(continued)
6D. Mergers and Consolidations..............................................................14
6E. Sale of Assets; Sale of Stock...........................................................14
6F. Nature of Business......................................................................16
6G. Transactions with Affiliates............................................................16
6H. Ownership of Restricted Subsidiaries....................................................16
6I. Terrorism Sanctions Regulations.........................................................16
7. EVENTS OF DEFAULT................................................................................17
7A. Acceleration............................................................................17
7B. Rescission of Acceleration..............................................................19
7C. Notice of Acceleration or Rescission....................................................20
7D. Other Remedies..........................................................................20
8. REPRESENTATIONS, COVENANTS AND WARRANTIES........................................................20
8A(1). Organization; Subsidiary Preferred Stock................................................20
8A(2) Power and Authority.....................................................................21
8A(3). Execution and Delivery of Transaction Documents.........................................21
8B. Financial Statements....................................................................21
8C. Actions Pending.........................................................................22
8D. Outstanding Debt........................................................................22
8E. Title to Properties.....................................................................22
8F. Taxes...................................................................................22
8G. Conflicting Agreements and Other Matters................................................22
8H. Offering of Notes.......................................................................23
8I. Use of Proceeds.........................................................................23
8J. ERISA...................................................................................23
8K. Governmental Consent....................................................................24
8L. Compliance with Environmental and Other Laws............................................24
8M. Regulatory Status.......................................................................24
8N. Permits and Other Operating Rights......................................................24
8O. Rule 144A...............................................................................25
8P. Absence of Financing Statements, etc....................................................25
8Q. Foreign Assets Control Regulations, Etc.................................................25
8R. Disclosure..............................................................................25
8S. Existing Indebtedness and Investments; Future Liens.....................................26
9. REPRESENTATIONS OF EACH PURCHASER................................................................26
9A. Nature of Purchase......................................................................26
9B. Accredited Purchaser....................................................................26
9C. Source of Funds.........................................................................27
TABLE OF CONTENTS
(continued)
10. DEFINITIONS; ACCOUNTING MATTERS..................................................................28
10A. Yield-Maintenance Terms.................................................................28
10B. Other Terms.............................................................................29
10C. Accounting and Legal Principles, Terms and Determinations...............................40
11. MISCELLANEOUS....................................................................................41
11A. Note Payments...........................................................................41
11B. Expenses................................................................................41
11C. Consent to Amendments...................................................................42
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes..........................42
11E. Persons Deemed Owners; Participations...................................................43
11F. Survival of Representations and Warranties; Entire Agreement............................43
11G. Successors and Assigns..................................................................43
11H. Independence of Covenants...............................................................44
11I. Notices.................................................................................44
11J. Payments Due on Non-Business Days.......................................................44
11K. Satisfaction Requirement................................................................44
11L. GOVERNING LAW...........................................................................44
11M. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL........................................45
11N. Severability............................................................................45
11O. Descriptive Headings; Advice of Counsel; Interpretation.................................46
11P. Counterparts; Facsimile Signatures......................................................46
11Q. Severalty of Obligations................................................................46
11R. Independent Investigation...............................................................46
11S. Directly or Indirectly..................................................................46
11T. Confidential Information................................................................46
11U. Binding Agreement.......................................................................48
PURCHASER SCHEDULE
SCHEDULE 8A(1) -- SUBSIDIARIES
SCHEDULE 8G -- LIST OF AGREEMENTS RESTRICTING INDEBTEDNESS
SCHEDULE 8S -- EXISTING INDEBTEDNESS, INVESTMENTS AND LIENS
EXHIBIT A -- FORM OF NOTE
EXHIBIT B -- FORM OF DISBURSEMENT DIRECTION LETTER
EXHIBIT C -- FORM OF GUARANTY AGREEMENT
EXHIBIT D -- FORM OF OPINION OF COMPANY'S AND GUARANTORS' COUNSEL
OIL-DRI CORPORATION OF AMERICA
410 North Michigan Avenue
Chicago, Illinois 60611
As of December 16, 2005
To Each of the Purchasers Named in the
Purchaser Schedule Attached Hereto
Ladies and Gentlemen:
The undersigned, Oil-Dri Corporation of America, a Delaware corporation
(herein called the "Company"), hereby agrees with the purchasers named in the
Purchaser Schedule attached hereto (herein called the "Purchasers") as set forth
below. Reference is made to paragraph 10 hereof for definitions of capitalized
terms used herein and not otherwise defined herein.
1. AUTHORIZATION OF ISSUE OF NOTES. The Company will authorize the issue of
its senior promissory notes (the "Notes") in the aggregate principal amount of
$15,000,000, to be dated the date of issue thereof, to mature October 15, 2015,
to bear interest on the unpaid balance thereof from the date thereof until the
principal thereof shall have become due and payable at the rate of 5.89% per
annum (provided that, during any period when an Event of Default shall be in
existence, at the election of the Required Holder(s) the outstanding principal
balance of the Notes shall bear interest from and after the date of such Event
of Default and until the date such Event of Default ceases to be in existence at
the rate per annum from time to time equal to the Default Rate) and on overdue
payments at the rate per annum from time to time equal to the Default Rate, and
to be substantially in the form of Exhibit A attached hereto. The term "Notes"
as used herein shall include each such senior promissory note delivered pursuant
to any provision of this Agreement and each such senior promissory note
delivered in substitution or exchange for any other Note pursuant to any such
provision.
2. PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell to each
Purchaser and, subject to the terms and conditions herein set forth, each
Purchaser agrees to purchase from the Company the aggregate principal amount of
Notes set forth opposite such Purchaser's name in the Purchaser Schedule
attached hereto at 100% of such aggregate principal amount. The Company will
deliver to each Purchaser, at the offices of Schiff Hardin LLP at 6600 Sears
Tower, Chicago, Illinois, 60606, one or more Notes registered in such
Purchaser's name (or, if specified in the Purchaser Schedule, in the name of the
nominee(s) for such Purchaser specified in the Purchaser Schedule), evidencing
the aggregate principal amount of Notes to be purchased by such Purchaser and in
the denomination or denominations specified with respect to such Purchaser in
the Purchaser Schedule against payment of the purchase price thereof by transfer
of immediately available funds on the date of closing, which shall be December
16, 2005 (herein called the "closing" or the "date of closing"), for credit to
the account or accounts as shall be specified in a letter on the Company's
letterhead, in substantially
the form of Exhibit B attached hereto, from the Company to the Purchasers
delivered prior to the date of closing.
3. CONDITIONS OF CLOSING. Each Purchaser's obligation to purchase and pay
for the Notes to be purchased by such Purchaser hereunder is subject to the
satisfaction, on or before the date of closing, of the following conditions:
3A. Documents. Such Purchaser shall have received original counterparts or,
if satisfactory to such Purchaser, certified or other copies of all of the
following, each duly executed and delivered by the party or parties thereto, in
form and substance satisfactory to such Purchaser, dated the date of closing
unless otherwise indicated, and, on the date of closing, in full force and
effect with no event having occurred and being then continuing that would
constitute a default thereunder or constitute or provide the basis for the
termination thereof:
(i) the Note or Notes to be purchased by such Purchaser in the form of
Exhibit A attached hereto;
(ii) a Guaranty Agreement made by each Subsidiary party to a Guarantee
of any Debt of the Company (other than the Notes) in favor of the holders
of the Notes in the form of Exhibit C attached hereto (together with any
other guaranty pursuant to which the Notes are guarantied and which is
entered into as contemplated hereby, as the same may be amended, modified
or supplemented from time to time in accordance with the provisions
thereof, collectively called the "Guaranty Agreements" and individually
called a "Guaranty Agreement");
(iii) a Secretary's Certificate signed by the Secretary or an
Assistant Secretary and one other officer of the Company and each Guarantor
certifying, among other things, (a) as to the names, titles and true
signatures of the officers of the Company or such Guarantor, as the case
may be, authorized to sign the Transaction Documents to which the Company
or such Guarantor, as the case may be, is a party, (b) that attached
thereto is a true, accurate and complete copy of the certificate of
incorporation or other formation document of the Company or such Guarantor,
as the case may be, certified by the Secretary of State (or other
appropriate official or agency) of the state of organization of the Company
or such Guarantor, as the case may be, as of a recent date, (c) that
attached thereto is a true, accurate and complete copy of the by-laws,
operating agreement or other organizational document of the Company or the
Guarantor, as the case may be, which were duly adopted and are in effect as
of the date of closing and have been in effect immediately prior to and at
all times since the adoption of the resolutions referred to in clause (d),
below, (d) that attached thereto is a true, accurate and complete copy of
the resolutions of the board of directors or other managing body of the
Company or such Guarantor, as the case may be, duly adopted at a meeting or
by unanimous written consent of such board of directors or other managing
body, authorizing the execution, delivery and performance of the
Transaction Documents to which the Company or such Guarantor, as the case
may be, is a party, and that such resolutions have not been amended,
modified, revoked or rescinded, are in full force and effect and are the
only resolutions of the shareholders, partners or members of the Company or
such Guarantor, as the case may be, or of such board of directors or other
managing body or any
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committee thereof relating to the subject matter thereof, (e) that the
Transaction Documents executed and delivered to such Purchaser by the
Company or such Guarantor, as the case may be, are in the form approved by
its board of directors or other managing body in the resolutions referred
to in clause (d), above, and (f) that no dissolution or liquidation
proceedings as to the Company or any Subsidiary have been commenced or are
contemplated;
(iv) a certificate of corporate or other type of entity good standing
for the Company and each Guarantor from the Secretary of State (or other
appropriate official or agency) of the state of organization of the Company
and each Guarantor, and of each state in which the Company or any such
Guarantor is qualified to transact business as a foreign organization, in
each case dated as of a recent date;
(v) a copy of the Credit Agreement and the Existing Note Agreement,
all amendments to each of the foregoing, and all instruments, documents and
agreements delivered in connection with each of the foregoing, certified by
an Officer's Certificate, dated the date of closing, as correct and
complete;
(vi) a copy of an executed consent under the Credit Agreement pursuant
to which the Bank (as defined in the Credit Agreement) consents to the
Guaranty Agreement notwithstanding the restrictions set forth in Section
7.11 of the Credit Agreement; and
(vii) such other certificates, documents and agreements as such
Purchaser may reasonably request.
3B. Opinion of Purchasers' Special Counsel. Such Purchaser shall have
received from Schiff Hardin LLP, who are acting as special counsel for the
Purchasers in connection with this transaction, a favorable opinion satisfactory
to such Purchaser as to such matters incident to the matters herein contemplated
as it may reasonably request.
3C. Opinion of Company's and Guarantors' Counsel. Such Purchaser shall have
received from Sonnenschien Nath & Rosenthal, special counsel for the Company and
the Guarantors, a favorable opinion satisfactory to such Purchaser and
substantially in the form of Exhibit D attached hereto, and the Company, by its
execution hereof, hereby requests and authorizes such special counsel to render
such opinion, and understands and agrees that each Purchaser receiving such an
opinion will and is hereby authorized to rely on such opinion.
3D. Representations and Warranties; No Default; Satisfaction of Conditions.
The representations and warranties contained in paragraph 8 hereof and in the
other Transaction Documents shall be true on and as of the date of closing (or
if such representation or warranty expressly states that it has been made as of
a specific date, as of such specific date), both before and immediately after
giving effect to the issuance of the Notes on the date of closing and the
consummation of any other transactions contemplated hereby and by the other
Transaction Documents; there shall exist on the date of closing no Event of
Default or Default, both before and immediately after giving effect to the
issuance of the Notes on the date of closing and the consummation of any other
transactions contemplated hereby and by the other Transaction
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Documents; the Company and each Guarantor shall have performed all agreements
and satisfied all conditions required under this Agreement or the other
Transaction Documents to be performed or satisfied on or before the date of
closing; and the Company and each Guarantor shall have delivered to such
Purchaser an Officer's Certificate, dated the date of closing, to each such
effect.
3E. Purchase Permitted By Applicable Laws; Approvals. The purchase of and
payment for the Notes to be purchased by such Purchaser on the date of closing
on the terms and conditions herein provided (including the use of the proceeds
of such Notes by the Company) shall not violate any applicable law or
governmental regulation (including, without limitation, section 5 of the
Securities Act or Regulation T, U or X of the Board of Governors of the Federal
Reserve System) and shall not subject such Purchaser to any tax, penalty,
liability or other onerous condition under or pursuant to any applicable law or
governmental regulation, and such Purchaser shall have received such
certificates or other evidence as it may request to establish compliance with
this condition. All necessary authorizations, consents, approvals, exceptions or
other actions by or notices to or filings with any court or administrative or
governmental body or other Person required in connection with the execution,
delivery and performance of this Agreement, the Notes and the other Transaction
Documents or the consummation of the transactions contemplated hereby or thereby
shall have been issued or made, shall be final and in full force and effect and
shall be in form and substance satisfactory to such Purchaser.
3F. Material Adverse Change. No material adverse change in the business,
condition (financial or otherwise), operations or prospects of the Company and
its Subsidiaries, taken as a whole, since July 31, 2005 shall have occurred or
be threatened, as determined by such Purchaser in its sole judgment. The
occurrence of the closing shall conclusively establish that such condition has
been satisfied or waived by each Purchaser.
3G. Fees and Expenses. Without limiting the provisions of paragraph 11B
hereof, the Company shall have paid or arranged to pay at closing the reasonable
fees, charges and disbursements of special counsel to the Purchasers referred to
in paragraph 3B hereof.
3H. Proceedings. All corporate and other proceedings taken or to be taken
by the Company or any Guarantor in connection with the transactions contemplated
hereby and all documents incident thereto shall be satisfactory in substance and
form to such Purchaser, and such Purchaser shall have received all such
counterpart originals or certified or other copies of such documents as it may
reasonably request.
4. PREPAYMENTS. The Notes shall be subject to prepayment with respect to
the required prepayments specified in paragraph 4A and the optional prepayments
permitted by paragraph 4B.
4A. Required Prepayments. Until the Notes shall be paid in full, the
Company shall apply to the prepayment of principal under the Notes, without
premium, the sum of $1,500,000 on October 15, 2008, $200,000 on October 15,
2009, $1,500,000 on October 15, 2010, $2,100,000 on October 15, 2011, $2,300,000
on October 15, 2012 and $3,500,000 on October 15 in each of the years 2013 and
2014, and such principal amounts of the Notes, together with interest thereon to
the prepayment dates, shall become due on such prepayment dates (provided
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that upon any purchase of the Notes pursuant to paragraph 4E the principal
amount of each required prepayment of the Notes becoming due under this
paragraph 4A on and after the date of such purchase shall be reduced in the same
proportion as the aggregate unpaid principal amount of the Notes is reduced as a
result of such purchase). The remaining outstanding principal amount of the
Notes, together with any accrued and unpaid interest thereon, shall become due
on October 15, 2015, the maturity date of the Notes.
4B. Optional Prepayment With Yield-Maintenance Amount. The Notes shall be
subject to prepayment, in whole at any time or from time to time in part (in
integral multiples of $100,000 and a minimum of $500,000 on any one occurrence
or, if less, the aggregate total outstanding principal amount of the Notes), at
the option of the Company, at 100% of the principal amount so prepaid plus
interest thereon to the prepayment date and the Yield-Maintenance Amount, if
any, with respect to each Note. Any partial prepayment of the Notes pursuant to
this paragraph 4B shall be applied in satisfaction of required payments of
principal thereof (including the required payment of principal due upon the
maturity thereof) in inverse order of their scheduled due dates.
4C. Notice of Optional Prepayment. The Company shall give the holder of
each Note irrevocable written notice of any prepayment pursuant to paragraph 4B
not less than 30 days prior to the prepayment date, specifying such prepayment
date and the aggregate principal amount of the Notes, and of the Notes held by
such holder, to be prepaid on such date and stating that such prepayment is to
be made pursuant to paragraph 4B. Notice of prepayment having been given as
aforesaid, the principal amount of the Notes specified in such notice, together
with interest thereon to the prepayment date and together with the
Yield-Maintenance Amount, if any, with respect thereto, shall become due and
payable on such prepayment date. The Company shall, on or before the day on
which it gives written notice of any prepayment pursuant to paragraph 4B, give
telephonic notice of the principal amount of the Notes to be prepaid and the
prepayment date to each holder of the Notes that is an Institutional Investor
which shall have designated a recipient of such notices in the Purchaser
Schedule attached hereto or by notice in writing to the Company.
4D. Partial Payments Pro Rata. In the case of each prepayment of less than
the entire outstanding principal amount of all Notes pursuant to paragraph 4A or
4B, the principal amount so prepaid shall be allocated pro rata to all Notes at
the time outstanding in proportion to the respective outstanding principal
amounts thereof.
4E. Acquisition of Notes. The Company shall not, and shall not permit any
of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in
part prior to their stated final maturity (other than by prepayment pursuant to
paragraph 4A or 4B or upon acceleration of such final maturity pursuant to
paragraph 7A), or purchase or otherwise acquire, directly or indirectly, Notes
held by any holder unless the Company or such Subsidiary or Affiliate shall have
offered to prepay or otherwise retire or purchase or otherwise acquire, as the
case may be, the same proportion of the aggregate principal amount of Notes held
by each other holder of Notes at the time outstanding upon the same terms and
conditions. Any Notes so prepaid or otherwise retired or purchased or otherwise
acquired by the Company or any of its Subsidiaries or Affiliates shall not be
deemed to be outstanding for any purpose under this Agreement.
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5. AFFIRMATIVE COVENANTS. The Company covenants that so long as any of the
Notes are outstanding:
5A. Financial Statements. The Company shall deliver to each holder of Notes
that is an Institutional Investor:
(i) Quarterly Statements -- within 45 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies
of, (a) a consolidated balance sheet of the Company and its Subsidiaries as
at the end of such quarter, and (b) consolidated statements of income and
cash flows of the Company and its Subsidiaries, for such quarter and (in
the case of the second and third quarters) for the portion of the fiscal
year ending with such quarter, setting forth in each case in comparative
form the figures for the corresponding periods in the previous fiscal year,
all in reasonable detail, prepared in accordance with generally accepted
accounting principles applicable to quarterly financial statements
generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows,
subject to changes resulting from year-end adjustments, provided that
delivery within the time period specified above of copies of the Company's
Quarterly Report on Form 10-Q prepared in compliance with the requirements
therefor and filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this paragraph 5A(i);
(ii) Annual Statements -- within 90 days after the end of each fiscal
year of the Company, duplicate copies of, (a) a consolidated balance sheet
of the Company and its Subsidiaries, as at the end of such year, and (b)
consolidated statements of income, changes in stockholders' equity and cash
flows of the Company and its Subsidiaries, for such year, setting forth in
each case in comparative form the figures for the previous fiscal year, all
in reasonable detail, prepared in accordance with generally accepted
accounting principles, and accompanied by an opinion thereon of
PricewaterhouseCoopers LLP, or of other 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
generally accepted accounting principles, and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances, provided
that the delivery within the time period specified above of the Company's
Annual Report on Form 10-K for such fiscal year (together with the
Company's annual report to stockholders, if any, prepared pursuant to Rule
14a-3 under the Exchange Act) prepared in compliance with the requirements
therefor and filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this paragraph 5A(ii);
(iii) Additional Financial Statements -- if as of the end of any
quarterly fiscal period of the Company, the total assets of the
Unrestricted Subsidiaries exceed 10% of Consolidated Assets or the total
revenues of the Unrestricted Subsidiaries exceed 10% of
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Consolidated Revenues for the four fiscal quarters then ending, the
financial statements required to be provided under paragraph 5A(i) or (ii),
as the case may be, shall be accompanied by:
(a) a consolidated balance sheet of the Unrestricted Subsidiaries
as at the end of such quarter or fiscal year, as the case may be,
together with a consolidating balance sheet for the Company and its
Subsidiaries, and
(b) consolidated statements of income, changes in stockholders'
equity and cash flows of the Unrestricted 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) or fiscal year,
as the case may be, together with consolidating statements of income,
changes in stockholders' equity (annual only) and cash flows of the
Company and its Subsidiaries for such period, all in reasonable
detail, prepared in accordance with generally accepted accounting
principles to quarterly or annual financial statements, as the case
may be, generally, and certified by a Responsible Officer as fairly
presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash
flows, subject in the case of quarterly financial statements to
changes resulting from year-end adjustments.
(iv) SEC and Other Reports -- promptly upon their becoming available,
one copy of (a) each financial statement, report, notice or proxy statement
sent by the Company or any Subsidiary to public securities holders
generally, and (b) each regular or periodic report, each registration
statement that shall have become effective (without exhibits except as
expressly requested by such holder), and each final prospectus and all
amendments thereto filed by the Company or any Subsidiary with the
Securities and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission) and
of all press releases and other statements made available generally by the
Company or any Subsidiary to the public concerning developments that are
Material);
(v) 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 paragraph 7A(vi), a written
notice specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect thereto;
(vi) 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 Company or an ERISA Affiliate proposes to take with respect
thereto:
(a) with respect to any Plan, any reportable event, as defined in
Section 4043(b) of ERISA and the regulations thereunder, for which
notice
7
thereof has not been waived pursuant to such regulations as in effect
on the date hereof; or
(b) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that such action
has been taken by the PBGC with respect to such Multiemployer Plan; or
(c) any event, transaction or condition that could reasonably be
expected to result in the incurrence of any liability by the Company
or any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee
benefit plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate pursuant to
Title I or IV of ERISA or such penalty or excise tax provisions, if
such liability or Lien, taken together with any other such liabilities
or Liens then existing, could reasonably be expected to have a
Material Adverse Effect; and
(vi) Notices from Governmental Authority -- promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or
any Subsidiary from any federal or state regulatory bodies or
administrative agencies or other governmental bodies relating to any order,
ruling, statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect; and
(vii) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or any of its
Subsidiaries or relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to time may be
reasonably requested by any such holder of Notes.
5B. Officer's Certificate. Each set of financial statements delivered to a
holder of Notes pursuant to paragraph 5A(i) or paragraph 5A(ii) hereof shall be
accompanied by a certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of paragraph 6A through 6C hereof, inclusive,
and of paragraph 6E hereof, during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such paragraph,
where applicable, the calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms of such paragraphs,
and the calculation of the amount, ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and its
Subsidiaries from the beginning of the quarterly or annual period covered by the
statements then being furnished to the date of the
8
certificate and that such review shall not have disclosed the existence during
such period of any condition or event that constitutes a Default or an Event of
Default or, if any such condition or event existed or exists (including, without
limitation, any such event or condition resulting from the failure of the
Company or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company shall have
taken or proposes to take with respect thereto.
5C. Inspection. The Company shall permit the representatives of each holder
of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at the
expense of such holder and upon reasonable prior notice to the Company, to visit
the principal executive office of the Company, to discuss the affairs, finances
and accounts of the Company and its Subsidiaries with the Company's officers,
and (with the consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists, at the expense
of the Company, to visit and inspect any of the offices or properties of the
Company or any Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and extracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
officers and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
5D. Restricted Subsidiaries. So long as no Default or Event of Default
shall have occurred and be continuing, the Company may at any time and from time
to time, upon not less than 30 days' prior written notice given to each holder
of the Notes, designate a previously Restricted Subsidiary as an Unrestricted
Subsidiary or a previously Unrestricted Subsidiary as a Restricted Subsidiary,
provided that immediately after such designation and after giving effect thereto
no Default or Event of Default shall have occurred and be continuing, and
provided further that the status of such Subsidiary had not been changed more
than twice.
5E. Compliance with Law. The Company will and will cause each of its
Restricted Subsidiaries to comply with all laws, ordinances or governmental
rules or regulations to which each of them is subject, including, without
limitation, Environmental Laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
5F. Insurance. The Company will and will cause each of its Restricted
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to their
9
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.
5G. Maintenance of Properties. The Company will and will cause each of its
Restricted Subsidiaries to maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times, provided that this
paragraph 5G shall not prevent the Company or any Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
5H. Payment of Taxes and Claims. The Company will and will cause each of
its Subsidiaries to file all tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and payable on
such returns and all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent and all claims for which sums have become due and payable
that have or might become a Lien on properties or assets of the Company or any
Subsidiary, provided that neither the Company nor any Subsidiary need pay any
such tax or assessment or claims if (i) the amount, applicability or validity
thereof is contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or a Subsidiary has
established adequate reserves therefor in accordance with generally accepted
accounting principles on the books of the Company or such Subsidiary or (ii) the
nonpayment of all such taxes, assessments and claims in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
5I. Corporate Existence, etc. The Company will at all times preserve and
keep in full force and effect its corporate existence, except as otherwise
permitted by paragraph 6D. The Company will at all times preserve and keep in
full force and effect the corporate existence of each of its Restricted
Subsidiaries (unless merged into the Company or another Restricted Subsidiary)
and all rights and franchises of the Company and its Restricted Subsidiaries
unless, in the good faith judgment of the Company, the termination of or failure
to preserve and keep in full force and effect such corporate existence, right or
franchise could not, individually or in the aggregate, have a Material Adverse
Effect.
5J. Ranking. The Company will ensure that, at all times, all liabilities of
the Company under the Notes will rank in right of payment either pari passu or
senior to all other Debt of the Company except for Debt which is preferred as a
result of being secured as permitted by paragraph 6C (but then only to the
extent of such security).
5K. Additional Guarantors. The Company covenants that, if at any time any
Subsidiary becomes party to a Guarantee of any Debt of the Company, and such
Subsidiary is not a Guarantor at such time, the Company will, at the same time,
cause such Subsidiary to
10
deliver to the holders of the Notes a Guaranty Agreement or a joinder to a
Guaranty Agreement in favor of the holders of the Notes for the benefit of the
holders of the Notes.
6. NEGATIVE COVENANTS. The Company covenants that so long as any of the
Notes are outstanding:
6A. Financial Covenants.
6A(1). Fixed Charges Coverage Ratio. The Company will not permit the Fixed
Charges Coverage Ratio ("Ratio") for any period of four consecutive fiscal
quarters ending at any time to be less than 1.50 to 1. In addition, for any
fiscal quarter in which the Ratio is less than 1.50 to 1, the Company shall pay
to the holders of the Notes additional interest at an annual rate of 0.25%,
payable along with the semi-annual interest payments due under the Notes. Such
additional interest, if any, for the Company's fiscal quarters ending October 31
and/or January 31 shall be paid at the time of the semi-annual interest payment
due the next following April 15th and for the Company's fiscal quarters ending
April 30 and/or July 31 shall be paid at the time of the semi-annual interest
payment due the next following October 15th. The Company agrees that it will
deliver to the holders of the Notes, together with its regular annual and
quarterly financial statements (but in any event not less than 15 days prior to
the date any scheduled semi-annual interest payment is due), a statement
containing (i) the calculation of the Fixed Charges Coverage Ratio, (b) whether
any additional interest is due under this paragraph and (c) the amount of such
additional interest. In addition, the Company agrees that it will include, with
the information that is required to accompany its payment by wire of semi-annual
interest payments, the amount of any such additional interest and the
identification of such amount as "additional interest".
6A(2). Consolidated Debt. The Company will not permit Consolidated Debt to
exceed 55% of Consolidated Total Capitalization, as calculated on the last day
of each fiscal quarter of the Company.
6A(3). Consolidated Adjusted Net Worth. The Company will not, at any time,
permit Consolidated Adjusted Net Worth to be less than the sum of (a)
$56,759,047, plus (b) an aggregate amount equal to 25% of its Consolidated Net
Income (but, in each case, only if a positive number) for each completed fiscal
quarter beginning with the fiscal quarter ended January 31, 2006.
6B. Debt of Restricted Subsidiaries. The Company will not at any time
permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, have outstanding, or otherwise become or remain directly or
indirectly liable with respect to, any Debt other than:
(i) Debt of a Restricted Subsidiary outstanding on April 15, 1998 and
disclosed in Schedule 8S, provided that such Debt may not be extended, renewed
or refunded except as otherwise permitted by this Agreement;
(ii) Debt of a Restricted Subsidiary owed to the Company or another
Restricted Subsidiary;
11
(iii) Debt of a Restricted Subsidiary outstanding at the time such
Restricted Subsidiary becomes a Subsidiary, provided that, (a) such Debt shall
not have been incurred in contemplation of such Restricted Subsidiary becoming a
Subsidiary, and (b) immediately after such Restricted Subsidiary becomes a
Subsidiary no Default or Event of Default shall exist, and any extension,
renewal or refunding of such Debt, provided that the principal amount thereof
outstanding immediately before giving effect to such extension, renewal or
refunding is not increased and no Default or Event of Default exists at the time
of such extension, renewal or refunding; and
(iv) Debt of a Restricted Subsidiary in addition to that otherwise
permitted by the foregoing provisions of this paragraph 6B, provided that on the
date the Restricted Subsidiary incurs or otherwise becomes liable with respect
to any such additional Debt and immediately after giving effect thereto and the
concurrent retirement of any other Debt, (a) no Default or Event of Default
exists, and (b) Priority Debt does not exceed 20% of Consolidated Total
Capitalization, provided that Debt of Restricted Subsidiaries in respect of
industrial revenue bonds, secured by Liens permitted by paragraph 6C(viii) and
guaranteed by the Company shall not be included in Priority Debt for purposes of
determining compliance with this paragraph 6B(iv).
Any Person which becomes a Restricted Subsidiary after the date hereof shall for
all purposes of this paragraph 6B be deemed to have created, assumed or incurred
at the time it becomes a Restricted Subsidiary all Debt of such corporation
existing immediately after it becomes a Restricted Subsidiary.
6C. Liens. The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
(upon the happening of a contingency or otherwise) any Lien on or with respect
to any property or asset (including, without limitation, any document or
instrument in respect of goods or accounts receivable) of the Company or any
such Restricted Subsidiary, whether now owned or held or hereafter acquired, or
any income or profits therefrom, or assign or otherwise convey any right to
receive income or profits, except:
(i) Liens for taxes, assessments or other governmental charges which are
not yet due and payable or the payment of which is not at the time required by
paragraph 5H;
(ii) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other similar Liens, in each case, incurred in the
ordinary course of business for sums not yet due and payable other than those
being contested in good faith by appropriate proceeding being diligently
pursued;
(iii) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business (a) in connection with workers'
compensation, unemployment insurance and other types of social security or
retirement benefits, or (b) to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations, surety bonds, appeal
bonds, bids, leases (other than Capitalized Leases), performance bonds,
purchase, construction or sales contracts and other similar obligations, in each
case not incurred or made in
12
connection with the borrowing of money, the obtaining of advances or credit or
the payment of the deferred purchase price of property;
(iv) any attachment or judgment Lien, unless the judgment it secures shall
not, within 60 days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall not have been discharged within 60 days
after the expiration of any such stay;
(v) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, in each case incidental
to, and not interfering with, the ordinary conduct of the business of the
Company or any of its Restricted Subsidiaries, provided that such Liens do not,
in the aggregate, materially detract from the value of such property;
(vi) Liens on property or assets of the Company or any of its Restricted
Subsidiaries securing Debt owing to the Company or to another Restricted
Subsidiary;
(vii) Liens existing on April 15, 1998 and securing the Debt of the Company
and its Restricted Subsidiaries and described in Schedule 8S;
(viii) any Lien created to secure all or any part of the purchase price, or
to secure Debt incurred or assumed to pay all or any part of the purchase price
or cost of construction, of property (or any improvement thereon) acquired or
constructed by the Company or a Restricted Subsidiary after the date of the
closing, provided that,
(a) any such Lien shall extend solely to the item or items of such
property (or improvement thereon) so acquired or constructed and, if
required by the terms of the instrument originally creating such Lien,
other property (or improvement thereon) which is an improvement to or is
acquired for specific use in connection with such acquired or constructed
property (or improvement thereon) or which is real property being improved
by such acquired or constructed property (or improvement thereon),
(b) the principal amount of the Debt secured by any such Lien shall at
no time exceed an amount equal to the lesser of (1) the cost to the Company
or such Restricted Subsidiary of the property (or improvement thereon) so
acquired or constructed and (2) the fair market value (as determined in
good faith by the board of directors of the Company) of such property (or
improvement thereon) at the time of such acquisition or construction, and
(c) any such Lien shall be created contemporaneously with, or within
180 days after, the acquisition or construction of such property;
(ix) any Lien existing on property of a Person immediately prior to its
being consolidated with or merged into the Company or a Restricted Subsidiary or
its becoming a Restricted Subsidiary, or any Lien existing on any property
acquired by the Company or any Restricted Subsidiary at the time such property
is so acquired (whether or not the Debt secured thereby shall have been
assumed), provided that (1) no such Lien shall have been created or assumed in
contemplation of such consolidation or merger or such Person's becoming a
13
Restricted Subsidiary or such acquisition of property, and (2) each such Lien
shall extend solely to the item or items of property so acquired and, if
required by the terms of the instrument originally creating such Lien, other
property which is an improvement to or is acquired for specific use in
connection with such acquired property;
(x) any Lien renewing, extending or refunding any Lien permitted by
paragraphs (vii), (viii) or (ix) of this paragraph 6C, provided that (1) the
principal amount of Debt secured by such Lien immediately prior to such
extension, renewal or refunding is not increased or the maturity thereof
reduced, (2) such Lien is not extended to any other property, and (3)
immediately after such extension, renewal or refunding no Default or Event of
Default would exist;
(xi) other Liens securing the Debt of the Company or any Restricted
Subsidiary not otherwise permitted by paragraphs (i) through (x), provided that
at the time the Company or such Restricted Subsidiary incurs or otherwise
becomes liable for such Debt, Priority Debt does not exceed 20% of Consolidated
Total Capitalization, provided further that Debt of Restricted Subsidiaries in
respect of industrial revenue bonds secured by Liens permitted by paragraph
6C(viii) and guaranteed by the Company shall not be included in Priority Debt
for purposes of determining compliance with this paragraph 6C(xi).
Notwithstanding the foregoing, at no time shall any Lien otherwise permitted
under this paragraph 6C(xi) secure any obligations under the Credit Agreement or
any other working capital credit facility of the Company.
6D. Mergers and Consolidations. The Company will not, and will not permit
any of its Restricted Subsidiaries to, consolidate with or be a party to a
merger with any other Person; provided, however, that:
(i) any Restricted Subsidiary may merge or consolidate with or into the
Company or any other Restricted Subsidiary so long as in any merger or
consolidation involving the Company, the Company shall be the surviving or
continuing corporation; and
(ii) the Company may consolidate or merge with any other corporation if (a)
the surviving entity is a solvent corporation organized and existing under the
laws of the United States of America, any State thereof or the District of
Columbia, (b) the surviving entity (if other than the Company) expressly assumes
in writing the Company's obligation under the Notes and this Agreement, (c) the
surviving entity delivers to the holders of the Notes an opinion of nationally
recognized independent counsel to the effect that all agreements or instruments
effecting such assumption are enforceable in accordance with their terms and
comply with the terms hereof, and (d) at the time of such consolidation or
merger and after giving effect thereto no Default or Event of Default shall have
occurred and be continuing.
6E. Sale of Assets; Sale of Stock. (i) The Company will not, and will not
permit any Restricted Subsidiary to, sell, lease, transfer, abandon or otherwise
dispose of assets (except assets sold for fair market value (x) in the ordinary
course of business or (y) in a Sale and Leaseback Transaction); provided that
the foregoing restrictions do not apply to:
14
(a) the sale, lease, transfer or other disposition of assets of a
Restricted Subsidiary to the Company or a Wholly-Owned Restricted
Subsidiary;
(b) the sale of assets for cash or other property to a Person or
Persons if all of the following conditions are met:
(1) such assets (valued at net book value at the time of such
sale) do not, together with all other assets of the Company and its
Restricted Subsidiaries previously disposed of (valued at net book
value at the time of such disposition) (other than in the ordinary
course of business or in a Sale and Leaseback Transaction) during the
same fiscal year exceed 15% of Consolidated Assets (which Consolidated
Assets shall be determined as of the last day of the fiscal year
ending on, or most recently ended prior to, such sale); and
(2) in the opinion of the Company's Board of Directors, the sale
is for fair market value and is in the best interests of the Company.
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 180 days of the date of sale of such assets to either (A) the
acquisition of fixed assets useful and intended to be used in the operation
of the business of the Company and its Restricted Subsidiaries within the
limitations of paragraph 6F and having a fair market value (as determined
in good faith by the Board of Directors of the Company) at least equal to
that of the assets so disposed of, or (B) the prepayment at any applicable
prepayment premium, of Debt of the Company or its Restricted Subsidiaries
selected by the Company (other than Debt owing to the Company, any of its
Subsidiaries or any Affiliate and Debt in respect of any revolving credit
or similar credit facility providing the Company or any of its Restricted
Subsidiaries with the right to obtain loans or other extensions of credit
from time to time, except to the extent that in connection with such
payment of Debt the availability of credit under such credit facility is
permanently reduced by an amount not less than the amount of such proceeds
applied to the payment of such Debt). It is understood and agreed by the
Company that any such proceeds paid and applied to the prepayment of the
Notes as hereinabove provided shall be prepaid as and to the extent
provided in paragraph 4B.
(ii) The Company will not permit any Restricted Subsidiary to issue or sell
any shares of stock of any class (including as "stock" for the purposes of this
paragraph 6E, any warrants, rights or options to purchase or otherwise acquire
stock or other Securities exchangeable for or convertible into stock) of such
Restricted Subsidiary to any Person other than the Company or a Wholly-Owned
Restricted Subsidiary, except for the purpose of qualifying directors, or except
in satisfaction of the validly pre-existing preemptive rights of minority
stockholders in connection with the simultaneous issuance of stock to the
Company and/or a Restricted Subsidiary whereby the Company and/or such
Restricted Subsidiary maintain their same proportionate interest in such
Restricted Subsidiary.
15
(iii) The Company will not sell, transfer or otherwise dispose of any
shares of stock of any Restricted Subsidiary (except to qualify directors) or
any Debt of any Restricted Subsidiary, and will not permit any Restricted
Subsidiary to sell, transfer or otherwise dispose of (except to the Company or a
Wholly-Owned Restricted Subsidiary) any shares of stock or any Debt of any other
Restricted Subsidiary, unless:
(a) simultaneously with such sale, transfer, or disposition, all
shares of stock and all Debt of such Restricted Subsidiary at the time
owned by the Company and by every other Restricted Subsidiary shall be
sold, transferred or disposed of as an entirety;
(b) said shares of stock and Debt are sold, transferred or otherwise
disposed of to a Person, for a cash consideration and on terms reasonably
deemed by the Board of Directors of the Company to be adequate and
satisfactory;
(c) the Restricted Subsidiary being disposed of shall not have any
continuing investment in the Company or any other Restricted Subsidiary not
being simultaneously disposed of; and
(d) such sale or other disposition is permitted by paragraph 6E(i),
which shall be deemed applicable hereunder to the sale of such shares of
stock or Debt mutatis mutandis.
6F. Nature of Business. Neither the Company nor any Restricted 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 Company and
its Restricted Subsidiaries would be substantially changed from the general
nature of the business engaged in by the Company and its Restricted Subsidiaries
on the date of closing.
6G. Transactions with Affiliates. The Company will not and will not permit
any Restricted Subsidiary to enter into directly or indirectly any transaction
or group of related transactions (including without limitation the purchase,
lease, sale or exchange of properties of any kind or the rendering of any
service) with any Affiliate, except in the ordinary course and pursuant to the
reasonable requirements of the Company's or such Restricted Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Restricted Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.
6H. Ownership of Restricted Subsidiaries. The Company will not permit any
shares of capital stock or similar equity interests of any Restricted Subsidiary
to be owned by an Unrestricted Subsidiary.
6I. Terrorism Sanctions Regulations. The Company covenants that it will not
and will not permit any Subsidiary to (a) become a Person described or
designated in the Specially Designated Nationals and Blocked Persons List of the
Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or
(b) engage in any dealings or transactions with any such Person.
16
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal or
Yield-Maintenance 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
(ii) 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
(iii) the Company defaults in the performance of or compliance with
any term contained in paragraph 6; or
(iv) the Company defaults in the performance of or compliance with any
term contained herein (other than those referred to in paragraphs (i), (ii)
and (iii) of this paragraph 7A) or any Guarantor defaults in the
performance of or compliance with any term contained in any other
Transaction Document and such failure shall not be remedied within the
grace period, if any, provided therefor in such Transaction Document, and,
in either case, such default is not remedied within 30 days after the
earlier of (a) a Responsible Officer obtaining actual knowledge of such
default and (b) the Company receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a "notice
of default" and to refer specifically to this paragraph 7A(iv)); or
(v) any representation or warranty made in writing by or on behalf of
the Company or any Guarantor or by any officer of the Company in this
Agreement, any other Transaction Document 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
(vi) (a) the Company or any Significant Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal
of or premium or make-whole amount or interest on any Indebtedness that is
outstanding in an aggregate principal amount of at least $5,000,000 beyond
any period of grace provided with respect thereto, or (b) the Company or
any Significant Subsidiary is in default in the performance of or
compliance with any term of any evidence of any Indebtedness in an
aggregate outstanding principal amount of at least $5,000,000 or of any
mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition such
Indebtedness has become, or has been declared (or one or more Persons are
entitled to declare such Indebtedness to be), due and payable before its
stated maturity or before its regularly scheduled dates of payment; or
(vii) the Company or any Significant Subsidiary (a) is generally not
paying, or admits in writing its inability to pay, its debts as they become
due, (b) files, or consents
17
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, (c)
makes an assignment for the benefit of its creditors, (d) 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, (e) is adjudicated as insolvent or to be liquidated, or (f) takes
corporate action for the purpose of any of the foregoing; or
(viii) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Significant Subsidiaries, a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy or insolvency law
of any jurisdiction, or ordering the dissolution, winding-up or liquidation
of the Company or any of its Significant Subsidiaries, or any such petition
shall be filed against the Company or any of its Significant Subsidiaries
and such petition shall not be dismissed within 60 days; or
(ix) a final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 are rendered against one or more of the
Company and its Significant Subsidiaries and which judgments are not,
within 60 days after entry thereof, bonded, discharged or stayed pending
appeal, or are not discharged within 60 days after the expiration of such
stay; or
(x) If (a) 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, (b) 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 Section
4042 of ERISA to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (c) the aggregate "amount of
unfunded benefit liabilities" (within the meaning of Section 4001(a)(18) of
ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed 5% of Consolidated Net Worth, (d) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, (e) the Company
or any ERISA Affiliate withdraws from any Multiemployer Plan, or (f) the
Company or any Subsidiary establishes or amends any employee welfare
benefit plan that provides post-employment welfare benefits in a manner
that would increase the liability of the Company or any Subsidiary
thereunder; and any such event or events described in clauses (a) through
(f) 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 paragraph 7A(x), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such
terms in Section 3 of ERISA); or
18
(xi) (i) the obligations of any Guarantor contained in any Guaranty
Agreement shall cease to be in full force and effect or shall be declared
by a court or governmental authority of competent jurisdiction to be void,
voidable or unenforceable against any such Guarantor; (ii) the Company or
any Guarantor shall contest the validity or enforceability of any Guaranty
Agreement against any such Guarantor, or (iii) the Company or any Guarantor
shall deny that such Guarantor has any further liability or obligation
under any Guaranty Agreement unless in each case the Guaranty Agreement is
replaced by an equivalent new Guaranty Agreement lacking the defect at
issue;
then (a) if such event is an Event of Default specified in clause (i) or (ii) of
this paragraph 7A, any holder of any Note (other than the Company or any of its
Subsidiaries or Affiliates) may at its option, by notice in writing to the
Company, declare all the Notes held by such holder to be, and all the Notes held
by such holder shall thereupon be and become, immediately due and payable at par
together with interest accrued thereon, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Company, (b) if
such event is an Event of Default specified in clause (vii) or (viii) (other
than an Event of Default described in clause (a) of paragraph 7A(vii) or
described in clause (f) of paragraph 7A(vii) by virtue of the fact that such
clause encompasses clause (a) of paragraph 7A(vii)) of this paragraph 7A with
respect to the Company, all of the Notes at the time outstanding shall
automatically become immediately due and payable together with interest accrued
thereon and together with the Yield-Maintenance Amount, if any, with respect to
each Note, without presentment, demand, protest or notice of any kind, all of
which are hereby waived by the Company, and (c) if such event is not an Event of
Default specified in clause (vii) or (viii) of this paragraph 7A with respect to
the Company or is an Event of Default described in clause (a) of paragraph
7A(vii) or described in clause (f) of paragraph 7A(vii) by virtue of the fact
that such clause encompasses clause (a) of paragraph 7A(vii) with respect to the
Company, the Required Holder(s) may at its or their option, by notice in writing
to the Company, declare all of the Notes to be, and all of the Notes shall
thereupon be and become, immediately due and payable together with interest
accrued thereon and together with the Yield-Maintenance Amount, if any, with
respect to each Note, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Company. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and without the occurrence of a
Default or an Event of Default and that the provision for payment of
Yield-Maintenance Amount by the Company in the event 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.
7B. Rescission of Acceleration. At any time after any or all of the Notes
shall have been declared immediately due and payable pursuant to paragraph 7A,
the Required Holder(s) may, by notice in writing to the Company, rescind and
annul such declaration and its consequences if (i) the Company shall have paid
all overdue interest on the Notes, the principal of and Yield-Maintenance
Amount, if any, payable with respect to any Notes which have become due
otherwise than by reason of such declaration, and interest on such overdue
interest and overdue principal and Yield-Maintenance Amount at the Default Rate,
(ii) the Company shall not have paid any amounts which have become due solely by
reason of such declaration, (iii) all Events of Default and Defaults, other than
non-payment of amounts which have become
19
due solely by reason of such declaration, shall have been cured or waived
pursuant to paragraph 11C, and (iv) no judgment or decree shall have been
entered for the payment of any amounts due pursuant to the Notes or this
Agreement. No such rescission or annulment shall extend to or affect any
subsequent Event of Default or Default or impair any right arising therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.
7D. Other Remedies. If any Event of Default or Default shall occur and be
continuing, the holder of any Note may proceed to protect and enforce its rights
under this Agreement, the other Transaction Documents and such Note by
exercising such remedies as are available to such holder in respect thereof
under applicable law, either by suit in equity or by action at law, or both,
whether for specific performance of any covenant or other agreement contained in
this Agreement or the other Transaction Documents or in aid of the exercise of
any power granted in this Agreement or any Transaction Document. No remedy
conferred in this Agreement or the other Transaction Documents upon the holder
of any Note is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to every other remedy
conferred herein or now or hereafter existing at law or in equity or by statute
or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents,
covenants and warrants to each Purchaser as follows:
8A(1). Organization; Subsidiary Preferred Stock. (i) The Company is a
corporation duly organized and existing in good standing under the laws of the
State of Delaware and each Restricted Subsidiary is duly organized and existing
in good standing under the laws of the jurisdiction in which it is incorporated.
The Company and each of its Restricted Subsidiaries have duly qualified or been
duly licensed, and are authorized to do business and are in good standing, in
each jurisdiction in which the ownership of their respective properties or the
nature of their respective businesses makes such qualification or licensing
necessary and in which the failure to be so qualified or licensed could be
reasonably likely to have a Material Adverse Effect. No Restricted Subsidiary
has any outstanding shares of any class of capital stock which has priority over
any other class of capital stock of such Subsidiary as to dividends or in
liquidation except as may be owned beneficially and of record by the Company or
a Wholly-Owned Restricted Subsidiary.
(ii) Schedule 8A(1) contains (except as noted therein) a complete and
correct list (a) of the Company's Subsidiaries, showing, as to each Subsidiary,
its status (whether (1) a Restricted or Unrestricted Subsidiary and (2) a
Significant Subsidiary or not), the correct name thereof, the jurisdiction of
its organization, and the percentage of shares of each class of its capital
stock or similar equity interests outstanding owned by the Company and each
other Subsidiary, (b) of the Company's Affiliates, other than Subsidiaries, and
(c) of the Company's directors and senior officers.
20
(iii) All of the outstanding shares of capital stock or similar equity
interests of each Restricted Subsidiary shown in Schedule 8A(1) as being owned
by the Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and clear
of any Lien (except as otherwise disclosed in Schedule 8A(1)).
(iv) No Restricted Subsidiary is a party to, or otherwise subject to any
legal restriction or any Material agreement (other than this Agreement, the
agreements listed on Schedule 8A(1) and customary limitations imposed by
corporate law statutes) restricting the ability of such Restricted Subsidiary to
pay dividends out of profits or make any other similar distributions of profits
to the Company or any of its Restricted Subsidiaries that owns outstanding
shares of capital stock or similar equity interests of such Restricted
Subsidiary.
8A(2) Power and Authority. The Company and each Restricted Subsidiary has
all requisite corporate power to own or hold under lease and operate their
respective properties which it purports to own or hold under lease and to
conduct its business as currently conducted and as currently proposed to be
conducted.
8A(3). Execution and Delivery of Transaction Documents. The Company and
each Subsidiary has all requisite corporate, limited liability company or
partnership, as the case may be, power to execute, deliver and perform its
obligations under this Agreement, the Notes and the other Transaction Documents
to which it is a party. The execution, delivery and performance of this
Agreement, the Notes and the other Transaction Documents have been duly
authorized by all requisite corporate, limited liability company or partnership,
as the case may be, action, and this Agreement, the Notes and the other
Transaction Documents have been duly executed and delivered by authorized
officers of the Company and each Subsidiary which is a party thereto and are
valid obligations of the Company and each such Subsidiary, legally binding upon
and enforceable against the Company and each such Subsidiary in accordance with
their terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
8B. Financial Statements. The Company has filed with the Securities and
Exchange Commission reports on Forms 10-K and 10-Q containing the following
financial statements: (i) a consolidated balance sheet of the Company and its
Subsidiaries as at July 31 in each of the years 2001 to 2005, inclusive, and
consolidated statements of income, stockholders' equity and cash flows of the
Company and its Subsidiaries for each such year; and (ii) a consolidated balance
sheet of the Company and its Subsidiaries as at October 31 in each of the years
2003 to 2005, inclusive, and consolidated statements of income and cash flows
for the three-month period ended on such date, prepared by the Company. Such
financial statements (including any related schedules and/or notes) are true and
correct in all material respects (subject, as to interim statements, to changes
resulting from audits and year-end adjustments), have been prepared in
accordance with generally accepted accounting principles consistently followed
throughout the periods involved and show all liabilities, direct and contingent,
of the Company and its Subsidiaries required to be shown in accordance with such
principles. The balance sheets fairly present the condition of the Company and
its Subsidiaries as at the dates thereof, and the
21
statements of income, stockholders' equity and cash flows fairly present the
results of the operations of the Company and its Subsidiaries and their cash
flows for the periods indicated. There has been no material adverse change in
the business, property or assets, condition (financial or otherwise), operations
or prospects of the Company and its Subsidiaries taken as a whole since July 31,
2005.
8C. Actions Pending. There is no action, suit, investigation or proceeding
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries, or any properties or rights of the Company or any of
its Subsidiaries, by or before any court, arbitrator or administrative or
governmental body which, individually or in the aggregate, could reasonably be
expected to result in any Material Adverse Effect.
8D. Outstanding Debt. Neither the Company nor any of its Restricted
Subsidiaries has outstanding any Debt except as permitted by paragraphs 6A(2)
and 6B. There exists no default under the provisions of any instrument
evidencing such Debt or of any agreement relating thereto.
8E. Title to Properties. The Company has and each of its Restricted
Subsidiaries has good and indefeasible title to its respective real properties
(other than properties which it leases) and good title to all of its other
respective properties and assets, including the properties and assets reflected
in the balance sheet as at July 31, 2005 referred to in paragraph 8B (other than
properties and assets disposed of in the ordinary course of business), subject
to no Lien of any kind except Liens permitted by paragraph 6C. All leases
necessary in any material respect for the conduct of the respective businesses
of the Company and its Restricted Subsidiaries are valid and subsisting and are
in full force and effect.
8F. Taxes. The Company has and each of its Restricted Subsidiaries has
filed all federal, state and other income tax returns which, to the knowledge of
the officers of the Company and its Subsidiaries, are required to be filed, and
each has paid all taxes as shown on such returns and on all assessments received
by it to the extent that such taxes have become due, except such taxes (a) the
amount of which is not individually or in the aggregate Material or (b) as are
being actively contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with generally accepted
accounting principles. 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
Restricted 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 Restricted Subsidiaries have been determined by the Internal Revenue
Service and paid for all fiscal years up to and including the fiscal year ended
July 31, 2001.
8G. Conflicting Agreements and Other Matters. Neither the Company nor any
of its Subsidiaries is a party to any contract or agreement or subject to any
charter or other corporate restriction which can reasonably be expected to
materially and adversely affects its ability to conduct its business or its
property or assets, condition (financial or otherwise) or operations. Neither
the execution nor delivery of this Agreement, the Notes or the other Transaction
Documents, nor the offering, issuance and sale of the Notes, nor fulfillment of
nor compliance with the terms and provisions hereof and of the Notes and the
other Transaction
22
Documents will conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in any violation of, or
result in the creation of any Lien upon any of the properties or assets of the
Company or any of its Subsidiaries pursuant to, the charter or by-laws of the
Company or any of its Subsidiaries, any award of any arbitrator or any agreement
(including any agreement with stockholders), instrument, order, judgment,
decree, statute, law, rule or regulation to which the Company or any of its
Subsidiaries is subject. Neither the Company nor any of its Subsidiaries is a
party to, or otherwise subject to any provision contained in, any instrument
evidencing Indebtedness of the Company or such Subsidiary, any agreement
relating thereto or any other contract or agreement (including its charter)
which limits the amount of, or otherwise imposes restrictions on the incurring
of, Indebtedness of the Company of the type to be evidenced by the Notes or
Indebtedness of any Guarantor of the type to be evidenced by the Guaranty
Agreements except as set forth in the agreements listed in Schedule 8G attached
hereto.
8H. Offering of Notes. Neither the Company nor any agent acting on its
behalf has, directly or indirectly, offered the Notes or any similar security of
the Company for sale to, or solicited any offers to buy the Notes or any similar
security of the Company from, or otherwise approached or negotiated with respect
thereto with, any Person other than Institutional Investors, and neither the
Company nor any agent acting on its behalf has taken or will take any action
which would subject the issuance or sale of the Notes to the provisions of
section 5 of the Securities Act or to the provisions of any securities or Blue
Sky law of any applicable jurisdiction.
8I. Use of Proceeds. Neither the Company nor any Subsidiary owns or has any
present intention of acquiring any "margin stock" as defined in Regulation U (12
CFR Part 221) of the Board of Governors of the Federal Reserve System (herein
called "margin stock"). The proceeds of sale of the Notes will be used to fund
future principal payments of the Debt of the Company, acquisitions (provided
that none of the proceeds of the sale of the Notes will be used to finance a
Hostile Tender Offer), stock repurchases, capital expenditures and for working
capital purposes. None of such proceeds will be used, directly or indirectly,
for the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any margin stock or for the purpose of maintaining, reducing or
retiring any Indebtedness which was originally incurred to purchase or carry any
stock that is currently a margin stock or for any other purpose which might
constitute the sale or purchase of any Notes a "purpose credit" within the
meaning of such Regulation U. The Company is not engaged principally, or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying margin stock. Neither the Company nor any agent acting
on its behalf has taken or will take any action which might cause this
Agreement, any of the other Transaction Documents or any Note to violate
Regulation T, Regulation U or any other regulation of the Board of Governors of
the Federal Reserve System or to violate the Exchange Act, in each case as in
effect now or as the same may hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, exists with respect
to any Plan (other than a Multiemployer Plan). No liability to the PBGC has been
or is expected by the Company or any ERISA Affiliate to be incurred with respect
to any Plan (other than a Multiemployer Plan) by the Company, any Subsidiary or
any ERISA Affiliate which is or could reasonably be expected to be
23
materially adverse to the business, property or assets, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole.
Neither the Company, any Subsidiary nor any ERISA Affiliate has incurred or
presently expects to incur any withdrawal liability under Title IV of ERISA with
respect to any Multiemployer Plan which is or could reasonably be expected to be
materially adverse to the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole. The execution
and delivery of this Agreement and the other Transaction Documents and the
issuance and sale of the Notes will be exempt from, or will not involve any
transaction which is subject to, the prohibitions of section 406 of ERISA and
will not involve any transaction in connection with which a penalty could be
imposed under section 502(i) of ERISA or a tax could be imposed pursuant to
section 4975 of the Code. The representation by the Company in the next
preceding sentence is made in reliance upon and subject to the accuracy of each
Purchaser's representation in paragraph 9B.
8K. Governmental Consent. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
other action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the date of closing with the
Securities and Exchange Commission and/or state Blue Sky authorities) in
connection with the execution and delivery of this Agreement or the other
Transaction Documents, the offering, issuance, sale or delivery of the Notes or
fulfillment of or compliance with the terms and provisions hereof or of the
Notes.
8L. Compliance with Environmental and Other Laws. The Company and its
Restricted Subsidiaries and all of their respective properties and facilities
have complied at all times and in all respects with all federal, state, local,
foreign and regional statutes, laws, ordinances and judicial or administrative
orders, judgments, rulings and regulations, including, without limitation, those
relating to protection of the environment except, in any such case, where
failure to comply, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
8M. Regulatory Status. Neither the Company nor any of its Restricted
Subsidiaries is (i) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or an "investment adviser" within the meaning of the Investment
Advisers Act of 1940, as amended, (ii) a "holding company" or a "subsidiary
company" or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or (iii) a "public utility" within the meaning of the
Federal Power Act, as amended.
8N. Permits and Other Operating Rights. The Company and each Restricted
Subsidiary has all such valid and sufficient certificates of convenience and
necessity, franchises, licenses, permits, operating rights and other
authorizations from federal, state, foreign, regional, municipal and other local
regulatory bodies or administrative agencies or other governmental bodies having
jurisdiction over the Company or any Restricted Subsidiary or any of its
24
properties, as are necessary for the ownership, operation and maintenance of its
businesses and properties, as presently conducted and as proposed to be
conducted while the Notes are outstanding, subject to exceptions and
deficiencies which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, and such certificates of convenience
and necessity, franchises, licenses, permits, operating rights and other
authorizations from federal, state, foreign, regional, municipal and other local
regulatory bodies or administrative agencies or other governmental bodies having
jurisdiction over the Company, any Restricted Subsidiary or any of its
properties are free from restrictions or conditions which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect,
and neither the Company nor any Restricted Subsidiary is in violation of any
thereof in any material respect.
8O. Rule 144A. The Notes are not of the same class as securities of the
Company, if any, listed on a national securities exchange, registered under
Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system.
8P. Absence of Financing Statements, etc. Except with respect to Liens
permitted by paragraph 6C hereof, there is no financing statement, security
agreement, chattel mortgage, real estate mortgage or other document filed or
recorded with any filing records, registry or other public office, that purports
to cover, affect or give notice of any present or possible future Lien on, or
security interest in, any assets or property of the Company or any of its
Restricted Subsidiaries or any rights relating thereto.
8Q. Foreign Assets Control Regulations, Etc.
(i) 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.
(ii) Neither the Company nor any Subsidiary (i) is a Person described
or designated in the Specially Designated Nationals and Blocked Persons
List of the Office of Foreign Assets Control or in Section 1 of the
Anti-Terrorism Order or (ii) engages in any dealings or transactions with
any such Person. The Company and its Subsidiaries are in compliance, in all
material respects, with the USA Patriot Act.
(iii) No part of the proceeds from the sale of the Notes hereunder
will be used, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party,
candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any
improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended, assuming in all cases that such Act
applies to the Company.
8R. Disclosure. This Agreement, any other Transaction Document and the
other documents, certificates and other writings delivered to any Purchaser by
or on behalf of the Company or any Guarantor in connection with the transactions
contemplated hereby taken as a
25
whole do not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements contained herein and
therein not misleading. There is no fact or facts peculiar to the Company or any
of its Subsidiaries which materially adversely affects or in the future may (so
far as the Company can now reasonably foresee), individually or in the
aggregate, reasonably be expected to materially adversely affect the business,
property or assets, or financial condition of the Company or any of its
Restricted Subsidiaries and which has not been set forth in this Agreement, the
Company's Annual Report of Form 10-K for the fiscal year ending July 31, 2005,
the Company's Quarterly Report on Form 10-Q for the quarterly period ending
October 31, 2005, the Form 8-Ks filed by the Company with the Securities and
Exchange Commission on November 2, 2005, November 7, 2005 and November 25, 2005,
or in the other documents, certificates and statements furnished to each
Purchaser by or on behalf of the Company prior to the date hereof in connection
with the transactions contemplated hereby. Any financial projections delivered
to any Purchaser on or prior to the date hereof are believed to be reasonable
and are based on the assumptions stated therein and the best information
available to the officers of the Company.
8S. Existing Indebtedness and Investments; Future Liens. (i) Except as
described therein, Schedule 8S sets forth a complete and correct list of all
outstanding Debt and Investments of the Company and its Restricted Subsidiaries
as of October 31, 2005, since which date there has been no Material change in
the amounts, interest rates, sinking funds, installment payments or maturities
of the Debt or Investments of the Company or its Restricted Subsidiaries, as the
case may be. Neither the Company nor any Restricted Subsidiary is in default and
no waiver of default is currently in effect, in the payment of any principal or
interest on any Debt of the Company or such Restricted Subsidiary and no event
or condition exists with respect to any Debt of the Company or any Restricted
Subsidiary that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Debt to become due and payable
before its stated maturity or before its regularly scheduled dates of payment.
(ii) Except as disclosed in Schedule 8S, neither the Company nor any
Restricted Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
paragraph 6C.
9. REPRESENTATIONS OF EACH PURCHASER. Each Purchaser represents as follows:
9A. Nature of Purchase. Such Purchaser is not acquiring the Notes to be
purchased by it hereunder with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act, provided that the
disposition of such Purchaser's property shall at all times be and remain within
its control.
9B. Accredited Purchaser. Such Purchaser is an "accredited investor" as
defined in Regulation D promulgated under the Securities Act and an experienced
and sophisticated investor with such knowledge and experience in financial and
business matters as is necessary to evaluate the merits and risks of an
investment in the Notes.
26
9C. Source of Funds. At least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
such Purchaser to pay the purchase price of the Notes to be purchased by such
Purchaser hereunder:
(i) the Source is an "insurance company general account" (as that term
is defined in the United States Department of Labor's Prohibited
Transaction Exemption ("PTE") 95-60) in respect of which the reserves and
liabilities (as defined by the annual statement for life insurance
companies approved by the National Association of Insurance Commissioners
(the "NAIC Annual Statement")) for the general account contract(s) held by
or on behalf of any employee benefit plan together with the amount of the
reserves and liabilities for the general account contract(s) held by or on
behalf of any other employee benefit plans maintained by the same employer
(or affiliate thereof as defined in PTE 95-60) or by the same employee
organization in the general account do not exceed 10% of the total reserves
and liabilities of the general account (exclusive of separate account
liabilities) plus surplus as set forth in the NAIC Annual Statement filed
with such Purchaser's state of domicile; or
(ii) the Source is a separate account that is maintained solely in
connection with such Purchaser's fixed contractual obligations under which
the amounts payable, or credited, to any employee benefit plan (or its
related trust) that has any interest in such separate account (or to any
participant or beneficiary of such plan (including any annuitant)) are not
affected in any manner by the investment performance of the separate
account; or
(iii) the Source is either (a) an insurance company pooled separate
account, within the meaning of PTE 90-1, or (b) a bank collective
investment fund, within the meaning of the PTE 91-38 and, except as
disclosed by such Purchaser to the Company in writing pursuant to this
clause (iii), 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
(iv) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of PTE 84-14 (the "QPAM Exemption")) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that are
included in such investment fund, when combined with the assets of all
other employee benefit plans established or maintained by the same employer
or by an affiliate (within the meaning of Section V(c)(1) of the QPAM
Exemption) of such employer or by the same employee organization and
managed by such QPAM, exceed 20% of the total client assets managed by such
QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are
satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (a) the identity
of such QPAM and (b) 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 clause (iv); or
27
(v) the Source constitutes assets of a "plan(s)" (within the meaning
of Section IV of PTE 96-23 (the "INHAM Exemption")) managed by an "in-house
asset manager" or "INHAM" (within the meaning of Part IV of the INHAM
Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption
are satisfied, neither the INHAM nor a person controlling or controlled by
the INHAM (applying the definition of "control" in Section IV(h) of the
INHAM Exemption) owns a 5% or more interest in the Company and (a) the
identity of such INHAM and (b) the name(s) of the employee benefit plan(s)
whose assets constitute the Source have been disclosed to the Company in
writing pursuant to this clause (v); or
(vi) the Source is a governmental plan; or
(vii) 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
clause (vii); or
(viii) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this paragraph 9B, the terms "employee benefit plan", "governmental
plan", and "separate account" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this Agreement, the
terms defined in paragraphs 10A and 10B (or within the text of any other
paragraph) shall have the respective meanings specified therein and all
accounting matters shall be subject to determination as provided in paragraph
10C.
10A. Yield-Maintenance Terms.
"Called Principal" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to paragraph 4B or has become or is
declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.
"Discounted Value" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (as converted to reflect
the periodic basis on which interest on such Note is payable, if interest is
payable other than on a semi-annual basis) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called Principal
of any Note, 0.50% over the yield to maturity implied by (i) the yields reported
as of 10:00 a.m. (New York City local time) on the Business Day next preceding
the Settlement Date with respect to such Called Principal 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 on the display designated as
"Page PX1" on the Bloomberg Financial Services Screen (or such other display as
28
may replace Page PX1 on the Bloomberg Financial Services Screen or, if Bloomberg
Financial Services shall cease to report such yields or shall cease to be
Prudential Capital Group's customary source of information for calculating
yield-maintenance amounts on privately placed notes, then such source as is then
Prudential Capital Group's customary source of such information), or if such
yields shall not be reported as of such time or the yields reported as of such
time shall not be ascertainable, (ii) the Treasury Constant Maturity Series
yields reported, for the latest day for which such yields shall have been so
reported as of the Business Day next 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 shall be
determined, if necessary, by (a) converting U.S. Treasury bill quotations to
bond equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between yields reported for various maturities. The
Reinvestment Yield shall be rounded to that number of decimal places as appears
in the coupon of the applicable Note.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or 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.
"Settlement Date" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4B or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.
10B. Other Terms.
"Affiliate" shall mean (i) with respect to any Person, any other
Person (other than a Restricted Subsidiary) (a) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, the Company, (b) which beneficially owns or holds 10% or
more of any class of the Voting Stock of the Company, (c) 10% or more of the
Voting Stock (or in the case of a Person which is not a corporation, 10% or more
of the equity interest) of which is beneficially owned or held by the Company or
a
29
Subsidiary or (d) any officer or director of such Person, and (ii) with respect
to Prudential, shall include any managed account, investment fund or other
vehicle for which Prudential or any Affiliate of Prudential acts as investment
advisor or portfolio manager. A Person shall be deemed to control a corporation
or other entity if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such corporation
or other entity, whether through the ownership of voting securities, by contract
or otherwise. Unless the context otherwise clearly requires, any reference to an
"Affiliate" is a reference to an Affiliate of the Company.
"Anti-Terrorism Order" means Executive Order No. 13,224 of September
24, 2001, Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079
(2001), as amended.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in New York City or Chicago are required or
authorized to be closed.
"Capitalized Lease" shall mean any lease the obligations of the lessee
under which constitute Capitalized Lease Obligations.
"Capitalized Lease Obligation" shall mean any rental obligation of any
Person which, under generally accepted accounting principles, would be required
to be capitalized on the books of such Person, taken at the amount thereof
accounted for as indebtedness (net of interest expense) in accordance with such
principles.
"closing" or "date of closing" shall have the meaning given in
paragraph 2 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time.
"Company" means Oil-Dri Corporation of America, a Delaware
corporation.
"Confidential Information" shall have the meaning given in paragraph
11T.
"Consolidated Adjusted Net Worth" shall mean, at any time, (a)
Consolidated Net Worth, minus (b) the excess, if any, of (i) the aggregate
amount of all outstanding Restricted Investments over (ii) 20% of Consolidated
Net Worth.
"Consolidated Assets" shall mean, at any time, the total assets of the
Company and its Restricted Subsidiaries which would be shown as assets on a
consolidated balance sheet of the Company and its Restricted Subsidiaries as of
such time prepared in accordance with generally accepted accounting principles,
after eliminating all amounts properly attributable to minority interests, if
any, in the stock and surplus of Restricted Subsidiaries.
"Consolidated Debt" shall mean, as of any date of determination, the
total of all Debt of the Company and its Restricted Subsidiaries outstanding on
such date, after eliminating all offsetting debits and credits between the
Company and its Restricted Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated financial
30
statements of the Company and its Restricted Subsidiaries in accordance with
generally accepted accounting principles.
"Consolidated Income Available for Fixed Charges" shall mean, with
respect to any period, Consolidated Net Income for such period plus all amounts
deducted in the computation thereof on account of (a) Fixed Charges and (b)
taxes imposed on or measured by income or excess profits.
"Consolidated Net Income" shall mean, with reference to any period,
the net income (or loss) of the Company and its Restricted Subsidiaries for such
period (taken as a cumulative whole), as determined in accordance with generally
accepted accounting principles, after eliminating all offsetting debits and
credits between the Company and its Restricted Subsidiaries and all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of the Company and its Restricted Subsidiaries in
accordance with generally accepted accounting principles, provided that there
shall be excluded:
(a) the income (or loss) of any Person accrued prior to the date it
becomes a Restricted Subsidiary or is merged into or consolidated with the
Company or a Restricted Subsidiary, and the income (or loss) of any Person,
substantially all of the assets of which have been acquired in any manner,
realized by such other Person prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a Restricted
Subsidiary) in which the Company or any Restricted Subsidiary has an
ownership interest, except to the extent that any such income has been
actually received by the Company or such Restricted Subsidiary in the form
of cash dividends or similar cash distributions,
(c) the undistributed earnings of any Subsidiary to the extent that
the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Subsidiary,
(d) any restoration to income of any contingency reserve (excluding a
contingency reserve established in the ordinary course of business, such as
reserves for uncollectable accounts), except to the extent that provision
for such reserve was made out of income accrued during such period,
(e) any aggregate net gain (but not any aggregate net loss) during
such period arising from the sale, conversion, exchange or other
disposition of capital assets (such term to include, without limitation,
(i) all non-current assets and, without duplication, (ii) the following,
whether or not current: all fixed assets, whether tangible or intangible,
all inventory sold in conjunction with the disposition of fixed assets, and
all Securities),
(f) any gains resulting from any write-up of any assets (but not any
loss resulting from any write-down of any assets),
(g) any net gain from the collection of the proceeds of life insurance
policies,
31
(h) any gain arising from the acquisition of any Security, or the
extinguishment, under generally accepted accounting principles, of any
Debt, of the Company or any Subsidiary,
(i) any net income or gain (but not any net loss) during such period
from (i) any change in accounting principles in accordance with generally
accepted accounting principles, (ii) any prior period adjustments resulting
from any change in accounting principles in accordance with generally
accepted accounting principles, (iii) any extraordinary items, or (iv) any
discontinued operations or the disposition thereof,
(j) any deferred credit representing the excess of equity in any
Restricted Subsidiary at the date of acquisition over the cost of the
investment in such Restricted Subsidiary,
(k) in the case of a successor to the Company by consolidation or
merger or as a transferee of its assets, any earnings of the successor
corporation prior to such consolidation, merger or transfer of assets,
(l) any portion of such net income that cannot be freely converted
into United States Dollars; and
(m) non-cash charges incurred by the Company on or before July 31,
2003, relating to the write-off of the Company's equity investments in the
Washoe County, Nevada projects and to the closing of the Company's
Christmas Valley, Oregon facility in an aggregate amount not in excess of
$4,700,000.
"Consolidated Net Worth" shall mean, at any time, (a) the sum of (i)
the par value (or value stated on the books of the corporation) of the capital
stock (but excluding treasury stock and capital stock subscribed and unissued)
of the Company and its Restricted Subsidiaries plus (ii) the amount of the
paid-in capital and retained earnings of the Company and its Restricted
Subsidiaries, in each case as such amounts would be shown on a consolidated
balance sheet of the Company and its Restricted Subsidiaries as of such time
prepared in accordance with generally accepted accounting principles, minus (b)
to the extent included in clause (a), all amounts properly attributable to
minority interests, if any, in the stock and surplus of Restricted Subsidiaries.
"Consolidated Revenues" shall mean, for any period, the total revenues
of the Company and its Restricted Subsidiaries determined in accordance with
generally accepted accounting principles.
"Consolidated Total Capitalization" shall mean, at any time, the sum
of Consolidated Adjusted Net Worth and Consolidated Debt.
32
"Credit Agreement" shall mean that certain Credit Agreement, dated as
of January 29, 1999, by and between Harris Trust and Savings Bank and the
Company, as amended, restated or otherwise modified from time to time.
"Debt" shall mean, with respect to any Person, without duplication,
(a) its liabilities for borrowed money; (b) its liabilities for the deferred
purchase price of property acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including, without limitation,
all liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such property); (c) its Capitalized
Lease Obligations; (d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities); and (e) any Guarantee of such
Person with respect to liabilities of a type described in any of clauses (a)
through (d) hereof. Debt of any Person shall include all obligations of such
Person of the character described in clauses (a) through (e) to the extent such
Person remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under generally accepted accounting
principles.
"Default" shall mean any of the events specified in paragraph 7A,
whether or not any requirement for such event to become an Event of Default has
been satisfied.
"Default Rate" shall mean a rate per annum from time to time equal to
the greater of (i) 7.89%, or (ii) 2% over the rate of interest publicly
announced by JPMorgan Chase Bank from time to time in New York City as its Prime
Rate.
"Environmental Laws" shall mean any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"Event of Default" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Existing Note Agreement" shall mean that certain Note Purchase
Agreement, dated as of April 15, 1998, by and among the Company and the
Purchasers named in Schedule A attached thereto.
33
"Existing Note Agreement Amendment" shall mean an amendment to the
Existing Note Agreement, among the Company and the holders of the 1998 Notes, in
form and substance satisfactory to the holders of the Notes, which provides that
any Guaranty (as defined in the Existing Note Agreement) by any Subsidiary of
any Debt of the Company shall not be included in Priority Debt (as defined in
the Existing Note Agreement) so long as any such Subsidiary is a party to a
guaranty agreement in favor of the holders of the 1998 Notes.
"Fixed Charges" shall mean, with respect to any period, the sum of (a)
Interest Charges for such period and (b) Lease Rentals for such period.
"Fixed Charges Coverage Ratio" shall mean, at any time, the ratio of
(a) Consolidated Income Available for Fixed Charges for the period of four
consecutive fiscal quarters ending on, or most recently ended prior to, such
time to (b) Fixed Charges for such period of four consecutive fiscal quarters.
"Guarantee" shall mean, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person: (a) to purchase such indebtedness or obligation or any property
constituting security therefor; (b) to advance or supply funds (i) for the
purchase or payment of such indebtedness or obligation, or (ii) to maintain any
working capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available funds
for the purchase or payment of such indebtedness or obligation; (c) to lease
properties or to purchase properties or services primarily for the purpose of
assuring the owner of such indebtedness or obligation of the ability of any
other Person to make payment of the indebtedness or obligation; or (d) otherwise
to assure the owner of such indebtedness or obligation against loss in respect
thereof. In any computation of the indebtedness or other liabilities of the
obligor under any Guarantee, the indebtedness or other obligations that are the
subject of such Guarantee shall be assumed to be direct obligations of such
obligor.
"Guarantor" shall mean any Subsidiary that is a party to a Guaranty
Agreement as of the date of closing and each other Person which delivers a
Guaranty Agreement or a joinder to a Guaranty Agreement pursuant to paragraph 5K
hereof, together with the respective successors and assignee of each of the
foregoing entities.
"Guaranty Agreement" and "Guaranty Agreements" shall have the same
meaning given in paragraph 3A (ii) hereof.
"Hostile Tender Offer" shall mean any offer to purchase, or any
purchase of, shares of capital stock of any corporation or equity interests in
any other entity, or securities convertible into or representing the beneficial
ownership of, or rights to acquire, any such shares or equity interests, if such
shares, equity interests, securities or rights are of a class which is publicly
traded on any securities exchange or in any over-the-counter market, other than
purchases of such shares, equity interests, securities or rights representing
less than 5% of the equity interests or beneficial ownership of such corporation
or other entity for portfolio
34
investment purposes, and such offer or purchase has not been duly approved by
the board of directors of such corporation or the equivalent governing body of
such other entity.
"including" shall mean, unless the context clearly requires otherwise,
"including without limitation", whether or not so stated.
"Indebtedness" with respect to any Person means, at any time, without
duplication, (a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock; (b) its
liabilities for the deferred purchase price of property acquired by such Person
(excluding accounts payable arising in the ordinary course of business but
including all liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property); (c) all
liabilities appearing on its balance sheet in accordance with generally accepted
accounting principles in respect of Capitalized Leases; (d) all liabilities for
borrowed money secured by any Lien with respect to any property owned by such
Person (whether or not it has assumed or otherwise become liable for such
liabilities); (e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account by
banks and other financial institutions (whether or not representing obligations
for borrowed money); (f) Swaps of such Person; and (g) any Guarantee of such
Person with respect to liabilities of a type described in any of clauses (a)
through (f) hereof. Indebtedness of any Person shall include all obligations of
such Person of the character described in clauses (a) through (g) to the extent
such Person remains legally liable in respect thereof notwithstanding that any
such obligation is deemed to be extinguished under generally accepted accounting
principles.
"Institutional Investor" shall mean (i) any original purchaser of a
Note, (ii) any holder of a Note holding more than 5% of the aggregate principal
amount of the Notes then outstanding, and (iii) any bank, trust company, savings
and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.
"Interest Charges" shall mean, with respect to any period, the sum
(without duplication) of the following (in each case, eliminating all offsetting
debits and credits between the Company and its Restricted Subsidiaries and all
other items required to be eliminated in the course of the preparation of
consolidated financial statements of the Company and its Restricted Subsidiaries
in accordance with generally accepted accounting principles): (a) all interest
in respect of Debt of the Company and its Restricted Subsidiaries (including
imputed interest on Capitalized Lease Obligations) deducted in determining
Consolidated Net Income for such period, less interest income of the Company and
its Restricted Subsidiaries included in Consolidated Net Income for such period
and (b) all debt discount and expense amortized or required to be amortized in
the determination of Consolidated Net Income for such period.
"Investment" shall mean any investment, made in cash or by delivery of
property, by the Company or any of its Restricted Subsidiaries (i) in any
Person, whether by acquisition of stock, Debt or other obligation or Security,
or by loan, Guarantee, advance, capital contribution or otherwise, or (ii) in
any property.
35
"Lease Rentals" shall mean, with respect to any period, the sum of the
minimum amount of rental and other obligations required to be paid during such
period by the Company or any Restricted Subsidiary as lessee under all leases of
real or personal property (other than Capitalized Leases), excluding any amounts
required to be paid by the lessee (whether or not therein designated as rental
or additional rental) (a) which are on account of maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges, or (b) which are
based on profits, revenues or sales realized by the lessee from the leased
property or otherwise based on the performance of the lessee.
"Lien" shall mean, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or Capitalized 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).
"Material" shall mean material in relation to the business,
operations, affairs, financial condition, assets, properties or prospects of the
Company and its Restricted Subsidiaries taken as a whole.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, affairs, financial condition, assets or properties of
the Company and its Restricted Subsidiaries taken as a whole, or (b) the ability
of the Company to perform its obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement or the Notes.
"Multiemployer Plan" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Notes" shall have the meaning given in paragraph 1 hereof.
"Officer's Certificate" shall mean a certificate signed in the name of
the Company by a Senior Financial Officer or of any other officer of the Company
whose responsibilities extend to the subject matter of such certificate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor or replacement entity thereto under ERISA.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, a limited liability company, an unincorporated
organization and a government or any department or agency thereof.
"Plan" shall mean any "employee pension benefit plan" (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.
36
"Preferred Stock" shall mean any class of capital stock of a
corporation that is preferred over any other class of capital stock of such
corporation as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such corporation.
"Priority Debt" shall mean, without duplication, the sum of (a) all
Debt of the Company secured by any Lien permitted under paragraph 6C(xi), and
(b) all Debt of Restricted Subsidiaries (except (i) Debt held by the Company or
a Wholly-Owned Restricted Subsidiary and (ii) upon the effectiveness of the
Existing Note Agreement Amendment, any Guarantee by any Subsidiary of any Debt
of the Company so long as such Subsidiary is party to a Guaranty Agreement).
"property" or "properties" shall mean, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"Prudential" shall mean The Prudential Insurance Company of America.
"Purchasers" shall have the meaning given in the introductory
paragraph hereof.
"Required Holder(s)" shall mean the holder or holders of more than 50%
of the aggregate principal amount of the Notes from time to time outstanding.
"Responsible Officer" shall mean any Senior Financial Officer and any
other officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Restricted Investments" shall mean all Investments except the
following:
(a) property to be used in the ordinary course of business of the
Company and its Restricted Subsidiaries;
(b) current assets arising from the sale of goods and services in the
ordinary course of business of the Company and its Restricted Subsidiaries;
(c) Investments in one or more Restricted Subsidiaries or any Person
that concurrently with such Investment becomes a Restricted Subsidiary;
(d) Investments existing on the date of closing and disclosed in
Schedule 8S;
(e) Investments in direct obligations of the United States of America
or any agency or instrumentality of the United States of America, the
payment or guarantee of which constitutes a full faith and credit
obligation of the United States of America, in either case, maturing within
three years from the date of acquisition thereof;
(f) Investments in tax-exempt obligations of any state of the United
States of America, or any municipality of any such state, in each case
rated "AA" or better by S&P, or "Aa2" or better by Moody's or an equivalent
rating by any other credit rating agency of recognized national standing,
provided that such obligations mature within 365 days from the date of
acquisition thereof;
37
(g) Investments in certificates of deposit and bankers' acceptances
maturing within one year from the date of issuance thereof, issued by a
bank or trust company organized under the laws of the United States of
America or any State thereof having capital, surplus and undivided profits
aggregating at least $200,000,000; provided that at the time of acquisition
thereof by the Company or a Restricted Subsidiary, the senior unsecured
long-term debt of such bank or trust company or of the holding company of
such bank or trust company is rated "AA" or better by S&P or "Aa2" or
better by Moody's or an equivalent rating by any other credit rating agency
of recognized national standing;
(h) Investments in commercial paper of corporations organized under
the laws of the United States of America or any state thereof maturing in
270 days or less from the date of issuance which, at the time of
acquisition by the Company or any Restricted Subsidiary, is accorded a
rating of "A-1" or better by S&P or "P-1" by Moody's or an equivalent
rating by any other credit rating agency of recognized national standing;
(i) Investments in publicly traded shares of any open-ended mutual
fund, the aggregate asset value of which "marked to market" is at least
$225,000,000, which is managed by a fund manager of recognized national
standing, and which invests not less than 90% of its assets in obligations
described in clauses (e) through (h) hereof; provided that any such
Investments will be classified as current assets in accordance with
generally accepted accounting principles; and
(j) treasury stock of the Company.
As of any date of determination, each Restricted Investment shall be valued at
the greater of:
(x) the amount at which such Restricted Investment is shown on the
books of the Company or any of its Restricted Subsidiaries (or zero if such
Restricted Investment is not shown on any such books); and
(y) either
(i) in the case of any Guarantee of the obligation of any Person,
the amount which the Company or any of its Restricted Subsidiaries has
paid on account of such obligation less any recoupment by the Company
or such Restricted Subsidiary of any such payments, or
(ii) in the case of any other Restricted Investment, the excess
of (x) the greater of (A) the amount originally entered on the books
of the Company or any of its Restricted Subsidiaries with respect
thereto and (B) the cost thereof to the Company or its Restricted
Subsidiary over (y) any return of capital (after income taxes
applicable thereto) upon such Restricted Investment through the sale
or other liquidation thereof or part thereof or otherwise.
38
As used in this definition of "Restricted Investments": "Moody's" means Moody's
Investors Service, Inc. and "S&P" means Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc.
In valuing any Investments for the purpose of any determination of "Consolidated
Net Worth", (i) at any time when an entity becomes a Restricted Subsidiary, all
Investments of such entity at such time shall be deemed to have been made by
such entity, as a Restricted Subsidiary, at such time and (ii) all Investments
of the Company and its Restricted Subsidiaries in a Restricted Subsidiary which
is redesignated as an Unrestricted Subsidiary pursuant to paragraph 5D of this
Agreement shall be deemed to have been made immediately after such
redesignation.
"Restricted Subsidiary" shall mean any Subsidiary which is not an
Unrestricted Subsidiary.
"Sale and Leaseback Transaction" shall mean, with respect to a Person
and property, a transaction or series of transactions pursuant to which such
Person sells such property with the intent at the time of entering into such
transaction or transactions of leasing such property for a term in excess of six
months.
"Security" shall have the same meaning as in Section 2(a)(1) of the
Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Senior Financial Officer" shall mean the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
"Significant Subsidiary" shall mean at any time any Subsidiary that
would at such time constitute a "significant subsidiary" (as such term is
defined in Regulation S-X of the Securities and Exchange Commission as in effect
on the date of the closing) of the Company.
"Subsidiary" shall mean, as to any Person, any corporation,
association or other business entity in which such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient
equity or voting interests to enable it or them (as a group) ordinarily, in the
absence of contingencies, to elect a majority of the directors (or Persons
performing similar function) of such entity, and any partnership or joint
venture if more than a 50% interest in 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 taken major
business actions without the approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"Swaps" shall mean, with respect to any Person, payment obligations
with respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
39
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"Transaction Documents" shall mean this Agreement, the Notes, the
Guaranty Agreements and the other agreements, documents, certificates and
instruments now or hereafter executed or delivered by the Company or any
Subsidiary or Affiliate in connection with this Agreement.
"Transferee" shall mean any direct or indirect transferee of all or
any part of any Note purchased by any Purchaser under this Agreement.
"Unrestricted Subsidiary" shall mean a Subsidiary designated as such
by the Company in the most recent notice (or, prior to any such notice, on
Schedule 8A(1)) with respect to such Subsidiary given by the Company pursuant to
and in accordance with the provisions of paragraph 5D.
"USA Patriot Act" means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.
"Voting Stock" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
"Wholly-Owned Restricted Subsidiary" shall mean, at any time, any
Restricted Subsidiary one hundred percent (100%) of all of the equity interests
(except directors' qualifying shares) and voting interests of which are owned by
any one or more of the Company and the Company's other Wholly-Owned Restricted
Subsidiaries at such time.
10C. Accounting and Legal Principles, Terms and Determinations. All
references in this Agreement to "generally accepted accounting principles" shall
be deemed to refer to generally accepted accounting principles in effect in the
United States at the time of application thereof. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all unaudited financial statements and certificates and reports as to financial
matters required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles, applied on a basis consistent with the
most recent audited consolidated financial statements of the Company and its
Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if no such
statements have been so delivered, the most recent audited financial statements
referred to in clause (i) of paragraph 8B. Any reference herein to any specific
citation, section or form of law,
40
statute, rule or regulation shall refer to such new, replacement or analogous
citation, section or form should citation, section or form be modified, amended
or replaced.
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as any Purchaser shall
hold any Note, it will make payments of principal of, interest on and any
Yield-Maintenance Amount payable with respect to such Note, which comply with
the terms of this Agreement, by wire transfer of immediately available funds for
credit (not later than 12:00 noon, New York City time, on the date due) to such
Purchaser's account or accounts as specified in the Purchaser Schedule attached
hereto, or such other account or accounts in the United States as such Purchaser
may designate in writing, notwithstanding any contrary provision herein or in
any Note with respect to the place of payment. Each Purchaser agrees that,
before disposing of any Note, such Purchaser will make a notation thereon (or on
a schedule attached thereto) of all principal payments previously made thereon
and of the date to which interest thereon has been paid. The Company agrees to
afford the benefits of this paragraph 11A to any Transferee which shall have
made the same agreement as each Purchaser has made in this paragraph 11A. No
holder shall be required to present or surrender any Note or make any notation
thereon, except that upon the written request of the Company made concurrently
with or reasonably promptly after the payment or prepayment in full of any Note,
the applicable holder shall surrender such Note for cancellation, reasonably
promptly after such request, to the Company at its principal office.
11B. Expenses. Whether or not the transactions contemplated hereby shall be
consummated, the Company shall pay all out-of-pocket expenses arising in
connection with such transactions, including:
(i) (a) all stamp and documentary taxes and similar charges in
connection with the issuance of the Notes (but not in connection with any
transfer thereof), (b) costs of obtaining a private placement number from
Standard and Poor's Ratings Group for the Notes and (c) fees and expenses
of brokers, agents, dealers, investment banks or other intermediaries or
placement agents (including without limitation William Blair and Company on
behalf of the Company), in each case as a result of the execution and
delivery of this Agreement or the other Transaction Documents or the
issuance of the Notes (other than those retained by any Purchaser, or any
such fees or expenses upon transfer of Notes);
(ii) document production and duplication charges and the reasonable
fees and expenses of any special counsel engaged by such Purchaser or such
Transferee in connection with (a) this Agreement, any of the other
Transaction Documents and the transactions contemplated hereby and (b) any
subsequent proposed waiver, amendment or modification of, or proposed
consent under, this Agreement or any other Transaction Document, whether or
not such proposed waiver, amendment, modification or consent shall be
effected or granted;
(iii) the costs and expenses, including attorneys' and financial
advisory fees, incurred by such Purchaser or such Transferee (a) in
enforcing (or determining whether
41
or how to enforce) any rights under this Agreement or the Notes or any
other Transaction Document or (b) in responding to any subpoena or other
legal process or informal investigative demand issued in connection with
this Agreement or any other Transaction Document or the transactions
contemplated hereby or by reason of your or such Transferee's having
acquired any Note, including without limitation costs and expenses incurred
in any workout, restructuring or renegotiation proceeding or bankruptcy
case; and
(iv) any judgment, liability, claim, order, decree, cost, fee,
expense, action or obligation resulting from the consummation of the
transactions contemplated hereby, (a) including the use of the proceeds of
the Notes by the Company and (b) excluding the transfer of any Note.
The Company also will promptly pay or reimburse each Purchaser or holder of
a Note (upon demand, in accordance with each such Purchaser's or holder's
written instruction) for all fees and costs paid or payable by such Purchaser or
holder to the Securities Valuation Office of the National Association of
Insurance Commissioners in connection with the initial filing of this Agreement
and all related documents and financial information.
The obligations of the Company under this paragraph 11B shall survive the
transfer of any Note or portion thereof or interest therein by any Purchaser or
Transferee and the payment of any Note.
11C. Consent to Amendments. This Agreement may be amended, and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holder(s) except
that, without the written consent of the holder or holders of all Notes at the
time outstanding, no amendment to this Agreement shall change the maturity of
any Note, or change the principal of, or the rate, method of computation or time
of payment of interest on or any Yield-Maintenance Amount payable with respect
to any Note, or affect the time, amount or allocation of any prepayments, or
change the proportion of the principal amount of the Notes required with respect
to any consent, amendment, waiver or declaration. Each holder of any Note at the
time or thereafter outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to indicate such
consent, but any Notes issued thereafter may bear a notation referring to any
such consent. No course of dealing between the Company and the holder of any
Note nor any delay in exercising any rights hereunder or under any Note shall
operate as a waiver of any rights of any holder of any Note. As used herein and
in the Notes, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes. The
Notes are issuable as registered notes without coupons in denominations of at
least $500,000, except as may be necessary to (i) reflect any principal amount
not evenly divisible by $500,000 or (ii) enable the registration of transfer by
a holder of its entire holding of Notes; provided, however, that no such minimum
denomination shall apply to Notes issued upon transfer by any holder of the
Notes to Prudential or any of Prudential's Affiliates or to any other entity or
group of
42
Affiliates with respect to which the Notes so issued or transferred shall be
managed by a single entity. The Company shall keep at its principal office a
register in which the Company shall provide for the registration of Notes and of
transfers of Notes. Upon surrender for registration of transfer of any Note at
the principal office of the Company, the Company shall, at its expense, execute
and deliver one or more new Notes of like tenor and of a like aggregate
principal amount, registered in the name of such transferee or transferees. Each
Transferee shall make the representations of Purchasers set forth in paragraph 9
and shall agree to be bound by paragraph 11T. At the option of the holder of any
Note, such Note may be exchanged for other Notes of like tenor and of any
authorized denominations, of a like aggregate principal amount, upon surrender
of the Note to be exchanged at the principal office of the Company. Whenever any
Notes are so surrendered for exchange, the Company shall, at its expense,
execute and deliver the Notes which the holder making the exchange is entitled
to receive. Every Note surrendered for registration of transfer or exchange
shall be duly endorsed, or be accompanied by a written instrument of transfer
duly executed, by the holder of such Note or such holder's attorney duly
authorized in writing. Any Note or Notes issued in exchange for any Note or upon
transfer thereof shall carry the rights to unpaid interest and interest to
accrue which were carried by the Note so exchanged or transferred, so that
neither gain nor loss of interest shall result from any such transfer or
exchange. Upon receipt of written notice from the holder of any Note of the
loss, theft, destruction or mutilation of such Note and, in the case of any such
loss, theft or destruction, upon receipt of such holder's unsecured indemnity
agreement, or in the case of any such mutilation upon surrender and cancellation
of such Note, the Company will make and deliver a new Note, of like tenor, in
lieu of the lost, stolen, destroyed or mutilated Note.
11E. Persons Deemed Owners; Participations. Prior to due presentment for
registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of, interest on and any Yield-Maintenance Amount
payable with respect to such Note and for all other purposes whatsoever, whether
or not such Note shall be overdue, and the Company shall not be affected by
notice to the contrary. Subject to the preceding sentence, the holder of any
Note may from time to time grant participations in such Note to any Person on
such terms and conditions as may be determined by such holder in its sole and
absolute discretion, provided that no additional obligation is sought to be
imposed on Company thereby.
11F. Survival of Representations and Warranties; Entire Agreement. All
representations and warranties contained herein or in any other Transaction
Documents or made in writing by or on behalf of the Company or any Guarantor in
connection herewith or therewith shall survive the execution and delivery of
this Agreement, the other Transaction Documents and the Notes, the 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 Transferee, regardless of any
investigation made at any time by or on behalf of any Purchaser or any
Transferee. Subject to the preceding sentence, this Agreement, the other
Transaction Documents and the Notes embody the entire agreement and
understanding between the Purchasers and the Company with respect to the subject
matter hereof and supersede all prior agreements and understandings relating to
such subject matter.
11G. Successors and Assigns. All covenants and other agreements in this
Agreement contained by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the
43
respective successors and assigns of the parties hereto (including, without
limitation, any Transferee) whether so expressed or not.
11H. Independence of Covenants. All covenants hereunder and in the other
Transaction Documents shall be given independent effect so that if a particular
action or condition is prohibited by any one of such covenants, the fact that it
would be permitted by an exception to, or otherwise be in compliance within the
limitations of, another covenant shall not (i) avoid the occurrence of a Default
or Event of Default if such action is taken or such condition exists or (ii) in
any way prejudice an attempt by the holder of any Note to prohibit through
equitable action or otherwise the taking of any action by the Company or any
Subsidiary which would result in a Default or Event of Default.
11I. Notices. All written communications provided for hereunder shall be
sent by first class mail or nationwide overnight delivery service (with charges
prepaid) and (i) if to any Purchaser, addressed to such Purchaser at the address
specified for such communications in the Purchaser Schedule attached hereto, or
at such other address as such Purchaser shall have specified to the Company in
writing, (ii) if to any other holder of any Note, addressed to such other holder
at such address as such other holder shall have specified to the Company in
writing or, if any such other holder shall not have so specified an address to
the Company, then addressed to such other holder in care of the last holder of
such Note which shall have so specified an address to the Company, and (iii) if
to the Company, addressed to it at 410 North Michigan Avenue, Suite 400,
Chicago, Illinois, 60611, Attention: Chief Financial Officer, or at such other
address as the Company shall have specified to the holder of each Note in
writing; provided, however, that the financial statements required to be
delivered under paragraphs 5(A)(i), (ii), (iii) and (iv) will be considered
delivered when transmitted electronically to an address designated by the holder
of the Notes if such an address has been so designated. Any communication to the
Company may, in addition to the above, be delivered by any other means either to
the Company at its address specified above or to any officer of the Company.
11J. Payments Due on Non-Business Days. Anything in this Agreement or the
Notes to the contrary notwithstanding, any payment of principal of or
Yield-Maintenance Amount or interest on any Note that is due on a date other
than a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
11K. Satisfaction Requirement. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to any Purchaser or to the Required Holder(s), the
determination of such satisfaction shall be made by such Purchaser or the
Required Holder(s), as the case may be, in the sole and exclusive judgment
(exercised in good faith) of the Person or Persons making such determination.
11L. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF ILLINOIS (EXCLUDING ANY CONFLICTS OF LAW RULES WHICH WOULD
OTHERWISE CAUSE THIS AGREEMENT TO BE CONSTRUED OR ENFORCED IN ACCORDANCE WITH,
OR
44
THE RIGHTS OF THE PARTIES TO BE GOVERNED BY, THE LAWS OF ANY OTHER
JURISDICTION).
11M. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE NOTES OR THE OTHER TRANSACTION
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS IN COOK COUNTY,
ILLINOIS, OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY IRREVOCABLY
ACCEPTS, UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS WITH RESPECT
TO ANY SUCH ACTION OR PROCEEDING. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN PARAGRAPH 11I, SUCH
SERVICE TO BECOME EFFECTIVE UPON RECEIPT. THE COMPANY AGREES THAT A FINAL AND
NON-APPEALABLE JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT OR SUCH JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY
HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER
JURISDICTION. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER
TRANSACTION DOCUMENTS BROUGHT IN ANY OF THE AFORESAID COURTS AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE COMPANY HAS OR MAY HEREAFTER ACQUIRE
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION, EXECUTION OR OTHERWISE WITH RESPECT TO ITSELF OR ITS PROPERTY), THE
COMPANY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS. THE COMPANY AND EACH
PURCHASER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED THEREBY.
11N. Severability. Any provision of this Agreement which 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
45
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
11O. Descriptive Headings; Advice of Counsel; Interpretation. The
descriptive headings of the several paragraphs of this Agreement are inserted
for convenience only and do not constitute a part of this Agreement. Each party
to this Agreement represents to the other parties to this Agreement that such
party has been represented by counsel in connection with this Agreement and the
other Transaction Documents, that such party has discussed this Agreement and
the other Transaction Documents with its counsel and that any and all issues
with respect to this Agreement and the other Transaction Documents have been
resolved as set forth herein. No provision of this Agreement or any other
Transaction Document shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured,
drafted or dictated such provision.
11P. Counterparts; Facsimile Signatures. 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. Delivery of an executed counterpart of
a signature page to this Agreement by facsimile shall be effective as delivery
of a manually executed counterpart of this Agreement.
11Q. Severalty of Obligations. The sales of Notes to the Purchasers are to
be several sales, and the obligations of the Purchasers under this Agreement are
several obligations. No failure by any Purchaser to perform its obligations
under this Agreement shall relieve any other Purchaser or the Company of any of
its obligations hereunder, and no Purchaser shall be responsible for the
obligations of, or any action taken or omitted by, any other Purchaser
hereunder.
11R. Independent Investigation. Each Purchaser represents to and agrees
with each other Purchaser that it has made its own independent investigation of
the condition (financial and otherwise), prospects and affairs of the Company
and its Subsidiaries in connection with its purchase of the Notes hereunder and
has made and shall continue to make its own appraisal of the creditworthiness of
the Company. No holder of Notes shall have any duties or responsibility to any
other holder of Notes, either initially or on a continuing basis, to make any
such investigation or appraisal or to provide any credit or other information
with respect thereto. No holder of Notes is acting as agent or in any other
fiduciary capacity on behalf of any other holder of Notes.
11S. Directly or Indirectly. Where any provision in this Agreement refers
to actions to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether the action in question in
taken directly or indirectly by such Person.
11T. Confidential Information. For the purposes of this paragraph 11T,
"Confidential Information" means information delivered to any Purchaser by or on
behalf of the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in
nature and that was clearly marked or labeled or otherwise adequately identified
when received by such Purchaser as being confidential
46
information of the Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to such
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 or on behalf of the Company or any Subsidiary or
other person under obligation of confidentiality to the Company or any
Subsidiary or (d) constitutes financial statements delivered to such Purchaser
under paragraph 5A 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 together with notice
of its confidentiality 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 paragraph 11T,
(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 paragraph
11T), (v) any Person from which such Purchaser offers to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this paragraph
11T), (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 and this Agreement. Each holder
of a Note, by its acceptance of a Note, will be deemed to have agreed to be
bound by and to be entitled to the benefits of this paragraph 11T as though it
were a party to this Agreement. On reasonable request by the Company in
connection with the delivery to any holder of a Note of information required to
be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this paragraph 11T.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
SIGNATURES ON THE FOLLOWING PAGE.]
47
11U. Binding Agreement. When this Agreement is executed and delivered by
the Company and each of the Purchasers it shall become a binding agreement
between the Company and each of the Purchasers.
Very truly yours,
OIL-DRI CORPORATION OF AMERICA
By: /s/ Daniel S. Jaffee
-------------------------------------
Name: Daniel S. Jaffee
--------------------------------
Title: President and CEO
-------------------------------
The foregoing Agreement
is hereby accepted as of the
date first above written
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ G. Anthony Coletta
--------------------------------
Vice President
PRUDENTIAL RETIREMENT INSURANCE
AND ANNUITY COMPANY
By: Prudential Investment Management, Inc.,
as investment manager
By: /s/ G. Anthony Coletta
----------------------------
Vice President
48
PURCHASER SCHEDULE
Oil-Dri Corporation of America
5.89% Senior Notes due 2015
Aggregate
Principal
Amount of Notes Note
to be Purchased Denomination(s)
------------------- ---------------
PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY $7,500,000.00 $7,500,000.00
(1) All payments on account of Notes held by such purchaser shall be made by
wire transfer of immediately available funds for credit to:
JP Morgan Chase Bank
New York, NY
ABA No. 021000021
Account No. P86329 (please do not include spaces)
Each such wire transfer shall set forth the name of the Company, a
reference to "5.89% Senior Notes due 2015, Security No. INV10096, PPN
" and the due date and application (as among principal, interest
-----
and Yield-Maintenance Amount) of the payment being made.
(2) Address for all notices relating to payments:
Prudential Retirement Insurance and Annuity Company
c/o Prudential Investment Management, Inc.
Private Placement Trade Management
PRIAC Administration
Gateway Center Four, 7th Floor
100 Mulberry Street
Newark, NJ 07102
Telephone: (973) 802-8107
Facsimile: (800) 224-2278
(3) Address for all other communications and notices:
Prudential Retirement Insurance and Annuity Company
c/o Prudential Capital Group
Two Prudential Plaza, Suite 5600
180 North Stetson
Chicago, IL 60601-6716
Attention: Managing Director
1
(4) Address for Delivery of Notes:
Send physical security by nationwide overnight delivery service to:
Prudential Capital Group
Two Prudential Plaza
Suite 5600
180 North Stetson
Chicago, IL 60601-6716
Attention: Wiley S. Adams
Telephone: (312) 540-4204
(5) Tax Identification No.: 06-1050034
2
Aggregate
Principal
Amount of Notes Note
to be Purchased Denomination(s)
------------------- ---------------
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $7,500,000.00 $7,500,000.00
(1) All payments on account of Notes held by such purchaser shall be made by
wire transfer of immediately available funds for credit to:
Account No.: P86189 (please do not include spaces)
JPMorgan Chase Bank
New York, NY
ABA No.: 021-000-021
Each such wire transfer shall set forth the name of the Company, a
reference to "5.89% Senior Notes due 2015, Security No. INV10096, PPN
" and the due date and application (as among principal, interest
-----
and Yield-Maintenance Amount) of the payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Investment Operations Group
Gateway Center Two, 10th Floor
100 Mulberry Street
Newark, NJ 07102-4077
Attention: Manager, Billings and Collections
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Prudential Plaza
Suite 5600
180 North Stetson
Chicago, IL 60601-6716
Attention: Managing Director
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management Group
Telephone: (973) 367-3141
Facsimile: (800) 224-2278
3
(5) Address for Delivery of Notes:
Send physical security by nationwide overnight delivery service to:
Prudential Capital Group
Two Prudential Plaza
Suite 5600
180 North Stetson
Chicago, IL 60601-6716
Attention: Wiley S. Adams
Telephone: (312) 540-4204
(6) Tax Identification No.: 22-1211670
4
EXHIBIT A
[FORM OF NOTE]
OIL-DRI CORPORATION OF AMERICA
5.89% SENIOR NOTE DUE OCTOBER 15, 2015
No. [Date]
-----
$
---------
FOR VALUE RECEIVED, the undersigned, OIL-DRI CORPORATION OF AMERICA, a
corporation organized and existing under the laws of the State of Delaware
(herein called the "Company"), hereby promises to pay to
, or registered assigns,
- ---------------------------- ---------------------------
the principal sum of DOLLARS on October 15, 2015, with
-------------------------
interest (computed on the basis of a 360-day year--30-day month) (a) on the
unpaid balance thereof at the rate of 5.89% per annum (or, during any period
when an Event of Default shall be in existence, at the election of the Required
Holder(s) at the Default Rate (as defined below)) from the date hereof, payable
semiannually on the 15th day of April and October in each year, commencing with
the April or October next succeeding the date hereof, until the principal hereof
shall have become due and payable, and (b) on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of Yield-Maintenance
Amount and, to the extent permitted by applicable law, any overdue payment of
interest, payable semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to the
Default Rate. The "Default Rate" shall mean a rate per annum from time to time
equal to the greater of (i) 7.89% or (ii) 2.0% over the rate of interest
publicly announced by JPMorgan Chase Bank from time to time in New York City as
its Prime Rate.
Payments of principal of, interest on and any Yield-Maintenance Amount
payable with respect to this Note are to be made at the main office of JPMorgan
Chase Bank in New York City or at such other place as the holder hereof shall
designate to the Company in writing, in lawful money of the United States of
America.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to a Note Agreement, dated as of December 16, 2005 (herein
called the "Agreement"), among the Company and the original purchasers of the
Notes named in the Purchaser Schedule attached thereto and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
paragraph 11T of the Agreement and (ii) to have made the representations set
forth in paragraph 9 of the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of
A-1
transfer duly executed, by the registered holder hereof or such holder's
attorney duly authorized in writing, a new Note for a like principal amount will
be issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
The Company agrees to make required prepayments of principal on the dates
and in the amounts specified in the Agreement. This Note is also subject to
optional prepayment, in whole or from time to time in part, on the terms
specified in the Agreement.
This Note is guaranteed pursuant to one or more Guaranty Agreements
executed by certain guarantors. Reference is made to such Guaranty Agreements
for a statement concerning the terms and conditions governing such guarantee of
the obligations of the Company hereunder.
The Company and any and all endorsers, guarantors and sureties severally
waive grace, demand, presentment for payment, notice of dishonor or default,
notice of intent to accelerate, notice of acceleration (except to the extent
required in the Agreement), protest and diligence in collecting in connection
with this Note, whether now or hereafter required by applicable law.
In case an Event of Default shall occur and be continuing, the principal of
this Note may be declared or otherwise become due and payable in the manner and
with the effect provided in the Agreement.
Capitalized terms used herein which are defined in the Agreement and not
otherwise defined herein shall have the meanings as defined in the Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF ILLINOIS AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE (EXCLUDING ANY
CONFLICTS OF LAW RULES WHICH WOULD OTHERWISE CAUSE THIS NOTE TO BE CONSTRUED OR
ENFORCED IN ACCORDANCE WITH THE LAWS OF ANY OTHER JURISDICTION).
OIL-DRI CORPORATION OF AMERICA
By:
--------------------------------
Title:
--------------------------
A-2
EXHIBIT C
[FORM OF GUARANTY AGREEMENT]
GUARANTY AGREEMENT
This AGREEMENT (the "Guaranty"), dated as of December 16, 2005, is
made by each of the parties signatory hereto as a "Guarantor" (each, a
"Guarantor") in favor of the holders of the Notes (as defined below) from time
to time (the "Holders").
WITNESSETH:
WHEREAS, Oil-Dri Corporation of America, a Delaware corporation (the
"Company"), has entered into that certain Note Agreement, dated as of December
16, 2005, between the Company and the Purchasers named in the Purchaser Schedule
attached thereto (as amended, the "Note Agreement"), pursuant which the Company
has issued its 5.89% Senior Notes due October 15, 2015 in the aggregate original
principal amount of $15,000,000 (the "Notes"); and
WHEREAS, each of the Guarantors is a Subsidiary of the Company; and
WHEREAS, as a condition to entering into the Note Agreement, each
Purchaser has required that the Guarantors execute and deliver this Guaranty for
the benefit of the Holders;
NOW THEREFORE, to satisfy one of the conditions precedent to the
effectiveness of the Note Agreement, for and in consideration of the premises
and mutual covenants herein contained, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, each
Guarantor, intending to be legally bound, does hereby covenant and agree as
follows:
1. DEFINITIONS; RECITALS. Capitalized terms that are used in this
Guaranty and not defined in this Guaranty shall have the meaning ascribed to
them in the Note Agreement. The recitals in this Guaranty are incorporated into
this Guaranty.
2. THE GUARANTY.
2A. Guaranty of Payment. Each Guarantor, jointly and severally,
absolutely, unconditionally and irrevocably guarantees the full and prompt
payment in United States currency when due (whether at maturity, a stated
prepayment date or earlier by reason of acceleration or otherwise) and at all
times thereafter, of all of the indebtedness, existing on the date hereof or
arising from time to time hereafter, whether direct or indirect, joint or
several, actual, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, of the Company to any Holder under or in respect of the Note
Agreement, the Notes and the other Transaction Documents,
including, without limitation, the principal of and interest (including, without
limitation, interest accruing before, during or after any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding, and, if interest ceases to accrue by operation of law by
reason of any such proceeding, interest which otherwise would have accrued in
the absence of such proceeding, whether or not allowed as a claim in such
proceeding) on the Notes and any Yield-Maintenance Amount (collectively, the
"Guarantied Obligations"). This is a continuing guaranty of payment and not of
collection. Notwithstanding the foregoing, the aggregate amount of any
Guarantor's liability under this Guaranty shall not exceed the maximum amount
that such Guarantor can guaranty without violating, or causing this Guaranty or
such Guarantor's obligations under this Guaranty to be void, voidable or
otherwise unenforceable under, any fraudulent conveyance or fraudulent transfer
law, including Section 548(a)(2) of the Bankruptcy Code.
Upon an Event of Default, any Holder may, at its sole election and
without notice, proceed directly and at once against any Guarantor to seek and
enforce payment of, and to collect and recover, the Guarantied Obligations, or
any portion thereof, without first proceeding against the Company, any other
Guarantor or any other Person or against any security for the Guarantied
Obligations or for the liability of any such other Person or the Guarantor
hereunder. Each Holder shall have the exclusive right to determine the
application of payments and credits, if any, to such Holder from each Guarantor,
the Company or from any other Person on account of the Guarantied Obligations or
otherwise. This Guaranty and all covenants and agreements of each Guarantor
contained herein shall continue in full force and effect and shall not be
discharged until such a time as all of the Guarantied Obligations shall be
indefeasibly paid in full in cash.
2B. Obligations Unconditional. The obligations of each Guarantor under
this Guaranty shall be continuing, absolute and unconditional, irrespective of
(i) the invalidity or unenforceability of the Note Agreement, the Notes or any
other agreements, documents, certificates and instruments now or hereafter
executed or delivered by the Company or any other Guarantor or any other Person
in connection with the Note Agreement or any provision thereof; (ii) the absence
of any attempt by any Holder to collect the Guarantied Obligations or any
portion thereof from the Company, any other Guarantor or any other Person or
other action to enforce the same; (iii) any failure by any Holder to acquire,
perfect or maintain any security interest or lien in, or take any steps to
preserve its rights to, any security for the Guarantied Obligations or any
portion thereof or for the liability of any Guarantor hereunder or the liability
of the Company, any other Guarantor or any other Person or any or all of the
Guarantied Obligations; (iv) any defense arising by reason of any disability
(other than a defense of payment, unless the payment on which such defense is
based was or is subsequently invalidated, declared to be fraudulent or
preferential, otherwise avoided and/or required to be repaid to the Company or a
Guarantor, as the case may be, or the estate of any such party, a trustee,
receiver or any other Person under any bankruptcy law, state or federal law,
common law or equitable cause, in which case there shall be no defense of
payment with respect to such payment) of the Company or any other Person liable
on the Guarantied Obligations or any portion thereof; (v) any Holder's election,
in any proceeding instituted under Chapter 11 of Title 11 of the Federal
Bankruptcy Code (11 U.S.C. ss.101 et seq.) (the "Bankruptcy Code"), of the
application of Section 1111(b)(2) of the Bankruptcy Code; (vi) any borrowing or
grant of a security interest to any Holder by the Company as
debtor-in-possession, or extension of credit, under Section 364 of
2
the Bankruptcy Code; (vii) the disallowance or avoidance of all or any portion
of any Holder's claim(s) for repayment of the Guarantied Obligations under the
Bankruptcy Code or any similar state law or the avoidance, invalidity or
unenforceability of any Lien securing the Guarantied Obligations or the
liability of any Guarantor hereunder or of the Company or any other guarantor of
all or any part of the Guarantied Obligations; (viii) any amendment to, waiver
or modification of, or consent, extension, indulgence or other action or
inaction under or in respect of the Note Agreement, the Notes or any other
agreements, documents, certificates and instruments now or hereafter executed or
delivered by the Company or any Guarantor or any other guarantor in connection
with the Note Agreement (including, without limitation, any increase in the
interest rate on the Notes); (ix) any change in any provision of any applicable
law or regulation; to the extent the same may be waived under any such
applicable law or regulation; (x) any order, judgment, writ, award or decree of
any court, arbitrator or governmental authority, domestic or foreign, binding on
or affecting any Guarantor, the Company or any other guarantor or any of their
assets; (xi) the certificate of incorporation or articles of organization (as
the case may be), or the by-laws or limited liability company agreement (as the
case may be) of any Guarantor or the Company or any other guarantor; (xii) any
mortgage, indenture, lease, contract, or other agreement (including without
limitation any agreement with stockholders), instrument or undertaking to which
any Guarantor or the Company is a party or which purports to be binding on or
affect any such Person or any of its assets; (xiii) any bankruptcy, insolvency,
readjustment, composition, liquidation or similar proceeding with respect to the
Company, any Guarantor or any other guarantor of all or any portion of any
Guarantied Obligations or any such Person's property and any failure by any
Holder to file or enforce a claim against the Company, any Guarantor or any such
other Person in any such proceeding; (xiv) any failure on the part of the
Company for any reason to comply with or perform any of the terms of any other
agreement with any Guarantor; or (xv) any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor
(other than a defense of payment, unless the payment on which such defense is
based was or is subsequently invalidated, declared to be fraudulent or
preferential, otherwise avoided and/or required to be repaid to the Company or a
Guarantor, as the case may be, or the estate of any such party, a trustee,
receiver or any other Person under any bankruptcy law, state or federal law,
common law or equitable cause, in which case there shall be no defense of
payment with respect to such payment).
2C. Obligations Unimpaired. Each Guarantor agrees that each Holder is
authorized, without demand or notice, which demand and notice are hereby waived,
and without discharging or otherwise affecting the obligations of any Guarantor
hereunder (which shall remain absolute and unconditional notwithstanding any
such action or omission to act), from time to time to (i) renew, extend,
accelerate or otherwise change the time for payment of, or other terms relating
to, the Guarantied Obligations or any portion thereof, or otherwise modify,
amend or change the terms of the Note Agreement, the Notes or any other
agreements, documents, certificates and instruments now or hereafter executed or
delivered by the Company or any Guarantor in connection with the Note Agreement;
(ii) accept partial payments on the Guarantied Obligations; (iii) take and hold
security for the Guarantied Obligations or any portion thereof or any other
liabilities of the Company, the obligations of any Guarantor under this Guaranty
and the obligations under any other guaranties and sureties of all or any of the
Guarantied Obligations, and exchange, enforce, waive, release, sell, transfer,
assign, abandon, fail to perfect, subordinate or otherwise deal with any such
security; (iv) apply such security and direct the order or manner of sale
thereof as any Holder may determine in its sole discretion; (v)
3
settle, release, compromise, collect or otherwise liquidate the Guarantied
Obligations or any portion thereof and any security therefor or guaranty thereof
in any manner; (vi) extend additional loans, credit and financial accommodations
to the Company and otherwise create additional Guarantied Obligations; (vii)
waive strict compliance with the terms of the Note Agreement, the Notes or any
other agreements, documents, certificates and instruments now or hereafter
executed or delivered by the Company or any Guarantor in connection with the
Note Agreement and otherwise forbear from asserting any Holder's rights and
remedies thereunder; (viii) take and hold additional guaranties or sureties and
enforce or forbear from enforcing any guaranty or surety of any other guarantor
or surety of the Guarantied Obligations, any portion thereof or release or
otherwise take any action (or omit to take any action) with respect to any such
guarantor or surety; (ix) assign this Guaranty in part or in whole in connection
with any assignment of the Guarantied Obligations or any portion thereof; (x)
exercise or refrain from exercising any of its rights against the Company or any
Guarantor; and (xi) apply any sums, by whomsoever paid or however realized, to
the payment of the Guarantied Obligations as any Holder in its sole discretion
may determine.
2D. Waivers of Guarantors. Each Guarantor waives for the benefit of
the Holders:
(i) any right to require any Holder, as a condition of payment or
performance by such Guarantor or otherwise to (a) proceed against the Company,
any other Guarantor, any other guarantor of the Guarantied Obligations or any
other Person, (b) proceed against or exhaust any security given to or held by
any Holder in connection with the Guarantied Obligations or any other guaranty,
or (c) pursue any other remedy available to any Holder whatsoever;
(ii) any defense arising by reason of (a) the incapacity, lack of
authority or any disability of the Company, including, without limitation, any
defense based on or arising out of the lack of validity or the unenforceability
of the Guarantied Obligations or any agreement or instrument relating thereto
(other than a defense of payment, unless the payment on which such defense is
based was or is subsequently invalidated, declared to be fraudulent or
preferential, otherwise avoided and/or required to be repaid to the Company or a
Guarantor, as the case may be, or the estate of any such party, a trustee,
receiver or any other Person under any bankruptcy law, state or federal law,
common law or equitable cause, in which case there shall be no defense of
payment with respect to such payment), (b) the cessation of the liability of the
Company from any cause other than indefeasible payment in full of the Guarantied
Obligations in cash or (c) any act or omission of any Holder or any other Person
which directly or indirectly, by operation of law or otherwise, results in or
aids the discharge or release of the Company or any security given to or held by
any Holder in connection with the Guarantied Obligations or any other guaranty;
(iii) any defense based upon any Holder's errors or omissions in the
administration of the Guarantied Obligations;
(iv) (a) any principles or provisions of law, statutory or otherwise,
which are or might be in conflict with the terms of this Guaranty and any legal
or equitable discharge of such Guarantor's obligations thereunder except to the
extent any such principle, provision or discharge may not be waived under
applicable law, (b) the benefit of any statute of limitations affecting the
Guarantied Obligations or such Guarantor's liability hereunder or the
enforcement
4
hereof, (c) any rights to set-offs, recoupments and counterclaims, and (d)
promptness, diligence and any requirement that any Holder protect, maintain,
secure, perfect or insure any Lien or any property subject thereto;
(v) notices (a) of nonperformance or dishonor, (b) of acceptance of
this Guaranty by any Holder or by any Guarantor, (c) of default in respect of
the Guarantied Obligations or any other guaranty, (d) of the existence, creation
or incurrence of new or additional indebtedness, arising either from additional
loans extended to the Company or otherwise, (e) that the principal amount, or
any portion thereof, and/or any interest on any document or instrument
evidencing all or any part of the Guarantied Obligations is due, (f) of any and
all proceedings to collect from the Company, any Guarantor or any other
guarantor of all or any part of the Guarantied Obligations, or from anyone else,
(g) of exchange, sale, surrender or other handling of any security or collateral
given to any Holder to secure payment of the Guarantied Obligations or any
guaranty therefor, (h) of renewal, extension or modification of any of the
Guarantied Obligations, (i) of assignment, sale or other transfer of any Note to
a Transferee, or (j) of any of the matters referred to in paragraph 2B and any
right to consent to any thereof;
(vi) presentment, demand for payment or performance and protest and
notice of protest with respect to the Guarantied Obligations or any guaranty
with respect thereto; and
(vii) any defenses or benefits that may be derived from or afforded by
law which limit the liability of or exonerate guarantors or sureties, or which
may conflict with the terms of this Guaranty.
Each Guarantor agrees that no Holder shall be under any obligation to
marshall any assets in favor of such Guarantor or against or in payment of any
or all of the Guarantied Obligations.
No Guarantor will exercise any rights which it may have acquired by
way of subrogation under this Guaranty, by any payment made hereunder or
otherwise, or accept any payment on account of such subrogation rights, or any
rights of reimbursement or indemnity or contribution or any rights or recourse
to any security for the Guarantied Obligations or this Guaranty unless at the
time of such Guarantor's exercise of any such right there shall have been
performed and indefeasibly paid in full in cash all of the Guarantied
Obligations.
2E. Revival. Each Guarantor agrees that, if any payment made by the
Company or any other Person is applied to the Guarantied Obligations and is at
any time annulled, set aside, rescinded, invalidated, declared to be fraudulent
or preferential or otherwise required to be refunded or repaid, or the proceeds
of any security are required to be returned by any Holder to the Company, its
estate, trustee, receiver or any other Person, including, without limitation,
any Guarantor, under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, such
Guarantor's liability hereunder (and any lien, security interest or other
collateral securing such liability) shall be and remain in full force and
effect, as fully as if such payment had never been made, or, if prior thereto
this Guaranty shall have been canceled or surrendered (and if any lien, security
interest or other collateral securing such Guarantor's liability hereunder shall
have been released or
5
terminated by virtue of such cancellation or surrender), this Guaranty (and such
lien, security interest or other collateral) shall be reinstated and returned in
full force and effect, and such prior cancellation or surrender shall not
diminish, release, discharge, impair or otherwise affect the obligations of such
Guarantor in respect of the amount of such payment (or any lien, security
interest or other collateral securing such obligation).
2F. Obligation to Keep Informed. Each Guarantor shall be responsible
for keeping itself informed of the financial condition of the Company and any
other Persons primarily or secondarily liable on the Guarantied Obligations or
any portion thereof, and of all other circumstances bearing upon the risk of
nonpayment of the Guarantied Obligations or any portion thereof, and each
Guarantor agrees that no Holder shall have any duty to advise such Guarantor of
information known to such Holder regarding such condition or any such
circumstance. If any Holder, in its discretion, undertakes at any time or from
time to time to provide any such information to any Guarantor, such Holder shall
not be under any obligation (i) to undertake any investigation, whether or not a
part of its regular business routine, (ii) to disclose any information which
such Holder wishes to maintain confidential, or (iii) to make any other or
future disclosures of such information or any other information to any
Guarantor.
2G. Bankruptcy. If any Event of Default specified in clauses (vii) or
(viii) of paragraph 7A of the Note Agreement shall occur and be continuing, then
each Guarantor agrees to immediately pay to the Holders the full outstanding
amount of the Guarantied Obligations without notice.
No waiver by any Guarantor in this Guaranty shall, in and of itself, be deemed a
waiver by the Company of any right of, or benefit afforded to, the Company under
the Note Agreement.
3. REPRESENTATIONS AND WARRANTIES.
Each Guarantor represents, covenants and warrants as follows:
3A. Organization. Such Guarantor is a corporation or limited liability
company (as the case may be) duly organized and existing in good standing under
the laws of the state of its organization and is qualified to do business and in
good standing in every jurisdiction where the ownership of its property or the
nature of the business conducted by it makes such qualification necessary and in
which the failure to be so qualified or licensed could be reasonably likely to
have a Material Adverse Effect.
3B. Power and Authority. Such Guarantor has all requisite power to
conduct its business as currently conducted and as currently proposed to be
conducted. Such Guarantor has all requisite power to execute, deliver and
perform its obligations under this Guaranty. The execution, delivery and
performance of this Guaranty have been duly authorized by all requisite action
and this Guaranty has been duly executed and delivered by authorized officers of
such Guarantor and is the valid obligation of such Guarantor, legally binding
upon and enforceable against such Guarantor in accordance with its terms, except
as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
6
3C. Conflicting Agreements and Other Matters. The execution and
delivery of this Guaranty and the fulfillment of or the compliance with the
terms and provisions hereof will not conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, or result in
any violation of, or result in the creation of any Lien upon any of the
properties or assets of such Guarantor or any of its Subsidiaries pursuant to,
the certificate of incorporation or articles of organization (as the case may
be), the by-laws or limited liability company agreement (as the case may be) of
such Guarantor or any of its Subsidiaries any award of any arbitrator or any
agreement (including any agreement with stockholders or holders of membership
interests (as the case may be) of such Guarantor or Persons with direct or
indirect ownership interests in stockholders or holders of membership interests
(as the case may be) of such Guarantor), instrument, order, judgment, decree,
statute, law, rule or regulation to which such Guarantor or any of its
Subsidiaries is subject. Neither such Guarantor nor any of its Subsidiaries is a
party to, or otherwise subject to any provision contained in, any instrument
evidencing any Indebtedness of such Guarantor or such Subsidiary any agreement
relating thereto or any other contract or agreement (including its charter)
which limits the amount of, or otherwise imposes restrictions on the incurring
of, obligations of such Guarantor of the type to be evidenced by this Guaranty.
3D. ERISA. The execution and delivery of this Guaranty will be exempt
from, or will not involve any transaction which is subject to, the prohibitions
of section 406 of ERISA and will not involve any transaction in connection with
which a penalty could be imposed under section 502(i) of ERISA or a tax could be
imposed pursuant to section 4975 of the Code.
3E. Governmental Consent. Neither the nature of such Guarantor or of
any Subsidiary of such Guarantor nor any of their respective businesses or
properties, nor any relationship between such Guarantor or any Subsidiary of
such Guarantor and any other Person, nor any circumstance in connection with the
execution, delivery and performance of this Guaranty, is such as to require any
authorization, consent, approval, exemption or other action by or notice to or
filing with any court or administrative or governmental body (including, without
limitation, notifications required by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, but excluding routine filings after the date of
closing with the Securities and Exchange Commission and/or state Blue Sky
authorities).
3F. Regulatory Status. Neither such Guarantor nor any Subsidiary of
the Guarantor is (i) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, (ii) a "holding company" or a "subsidiary company" or an "affiliate"
of a "holding company" or a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended, or
(iii) a "public utility" within the meaning of the Federal Power Act, as
amended.
4. MISCELLANEOUS.
4A. Successors, Assigns and Participants. This Guaranty shall be
binding upon each Guarantor and its successors and assigns and shall inure to
the benefit of each Holder and its successors, transferees and assigns; all
references herein to a Guarantor shall be deemed
7
to include its successors and assigns, and all references herein to any Holder
shall be deemed to include its successors and assigns. This Guaranty shall be
enforceable by each Holder and any of such Holder's successors, assigns and
participants, and any such successors and assigns shall have the same rights and
benefits with respect to each Guarantor under this Guaranty as such Holder
hereunder.
4B. Consent to Amendments. This Guaranty may be amended, and a
Guarantor may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, if such Guarantor shall obtain the
written consent to such amendment, action or omission to act, of the Required
Holder(s) of the Notes, except that, without the written consent of all of the
holders of the Notes, (i) no amendment to or waiver of the provisions of this
Guaranty shall change or affect the provisions of this paragraph 4B insofar as
such provisions relate to proportions of the principal amount of the Notes, or
the rights of any individual holder of the Notes, required with respect to any
consent, (ii) no Guarantor shall be released from this Guaranty, and (iii) no
amendment, consent or waiver with respect to paragraph 2A or the definition of
"Guarantied Obligations" (except to add additional obligations of the Company)
shall be effective. Each Holder at the time or thereafter outstanding shall be
bound by any consent authorized by this paragraph 4B, whether or not the Note
held by such Holder shall have been marked to indicate such consent, but any
Notes issued thereafter may bear a notation referring to any such consent. No
course of dealing between any Guarantor and any Holder nor any delay in
exercising any rights hereunder or under any Note shall operate as a waiver of
any rights of any Holder. As used herein, the term "this Guaranty" and
references thereto shall mean this Guaranty as it may from time to time be
amended or supplemented. Notwithstanding the foregoing, this Guaranty may be
amended by the addition of additional Guarantors pursuant to a Guaranty Joinder
in the form of Exhibit A hereto.
4C. Survival of Representations and Warranties; Entire Agreement. All
representations and warranties contained herein or made in writing by or on
behalf of each Guarantor in connection herewith shall survive the execution and
delivery of this Guaranty, the transfer by any Holder of any Note or portion
thereof or interest therein and the payment of any Note, and may be relied upon
by any Transferee, regardless of any investigation made at any time by or on
behalf of any Holder or any Transferee. Subject to the preceding sentence, this
Guaranty embodies the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings relating to the subject matter hereof.
4D. Notices. All written communications provided for hereunder shall
be sent by first class mail or telegraphic notice or nationwide overnight
delivery service (with charges prepaid) or by hand delivery or telecopy and
addressed:
(i) in the case of each Guarantor, to:
c/o Oil-Dri Corporation of America
410 North Michigan Avenue
Chicago, Illinois, 60611
Attention: Chief Financial Officer
Phone: (312) 706-3209
8
Fax: (312) 706-1223
(ii) in the case of any Holder, to the address specified for notices
to such Holder under the Note Agreement;
or, in either case, at such other address as shall be designated by such Person
in a written notice to the other parties hereto.
4E. Descriptive Headings. The descriptive headings of the several
paragraphs of this Guaranty are inserted for convenience only and do not
constitute a part of this Guaranty.
4F. Satisfaction Requirement. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Guaranty
required to be satisfactory to any Holder or the Required Holder(s) of the
Notes, the determination of such satisfaction shall be made by such Holder or
such Required Holder(s), as the case may be, in the sole and exclusive judgment
(exercised in good faith) of the Person or Persons making such determination.
4G. Governing Law. THIS GUARANTY SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF ILLINOIS (EXCLUDING ANY CONFLICTS OF LAW RULES WHICH WOULD
OTHERWISE CAUSE THIS GUARANTY TO BE CONSTRUED OR ENFORCED IN ACCORDANCE WITH, OR
THE RIGHTS OF THE PARTIES TO BE GOVERNED BY, THE LAWS OF ANY OTHER
JURISDICTION).
4H. Counterparts. This Guaranty may be executed simultaneously in two
or more counterparts, each of which shall be an original and constitute one and
the same agreement. It shall not be necessary in making proof of this Guaranty
to produce or account for more than one such counterpart. Delivery of an
executed counterpart of a signature page hereto by facsimile shall be effective
as delivery of a manually executed counterpart of this Guaranty.
4I. SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS GUARANTY OR THE OTHER TRANSACTION DOCUMENTS MAY BE BROUGHT IN
THE COURTS OF THE STATE OF ILLINOIS IN COOK COUNTY, ILLINOIS, OR OF THE UNITED
STATES FOR THE NORTHERN DISTRICT OF ILLINOIS AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS, UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS WITH RESPECT TO ANY SUCH ACTION OR
PROCEEDING. EACH GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO IT AT ITS ADDRESS PROVIDED IN SECTION 4D(i), SUCH SERVICE TO BECOME
EFFECTIVE UPON RECEIPT. EACH GUARANTOR AGREES THAT A FINAL AND NON-APPEALABLE
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN ANY OTHER JURISDICTION
9
BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY GUARANTOR IN ANY OTHER JURISDICTION. EACH GUARANTOR HEREBY IRREVOCABLY
WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION
WITH THIS GUARANTY BROUGHT IN ANY OF THE AFORESAID COURTS AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
4J. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is prohibited by
any one of such covenants, the fact that it would be permitted by an exception
to, or otherwise be in compliance within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or such condition exists.
4K. Severability. Any provision of this Guaranty which 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 not invalidate or render
unenforceable such provision in any other jurisdiction.
[signature page follows]
10
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty Agreement
to be duly executed as of the date first above written.
OIL-DRI CORPORATION OF GEORGIA, a
Georgia corporation
By:
--------------------------------
Title:
--------------------------
OIL-DRI PRODUCTION COMPANY, a
Mississippi corporation
By:
--------------------------------
Title:
--------------------------
OIL-DRI CORPORATION OF NEVADA, a
Nevada corporation
By:
--------------------------------
Title:
--------------------------
MOUNDS PRODUCTION COMPANY, LLC,
an Illinois limited liability company
By: MOUNDS MANAGEMENT, INC., Its
Managing Member
By:
--------------------------------
Title:
--------------------------
MOUNDS MANAGEMENT, INC., a Delaware
corporation
By:
--------------------------------
Title:
--------------------------
11
BLUE MOUNTAIN PRODUCTION
COMPANY, a Mississippi corporation
By:
--------------------------------
Title:
--------------------------
TAFT PRODUCTION COMPANY, a Delaware
corporation
By:
--------------------------------
Title:
--------------------------
12
EXHIBIT A
[FORM OF JOINDER AGREEMENT TO GUARANTY AGREEMENT]
JOINDER AGREEMENT NO. TO GUARANTY AGREEMENT
----
Re: OIL-DRI CORPORATION OF AMERICA
This Joinder Agreement is made as of , in favor of the
--------------
Holders (as such terms are defined in the Oil-Dri Guaranty, as hereinafter
defined).
A. Reference is made to the Guaranty Agreement made as of December 16, 2005
(as such Guarantee may be supplemented, amended, restated or consolidated from
time to time, the "Oil-Dri Guaranty") by certain Persons in favor of the Holders
(as defined in the Oil-Dri Guaranty), under which such Persons have guaranteed
to the Holders the due payment and performance by Oil-Dri Corporation of
America, a Delaware corporation ("Oil-Dri") of the Guarantied Obligations (as
defined in the Oil-Dri Guaranty).
B. Capitalized terms used but not otherwise defined in this Joinder
Agreement have the respective meanings given to such terms in the Oil-Dri
Guaranty, including the definitions of terms incorporated in the Oil-Dri
Guaranty by reference to other agreements.
C. Section 4B of the Oil-Dri Guaranty provides that additional Persons may
from time to time after the date of the Oil-Dri Guaranty become Guarantors under
the Oil-Dri Guaranty by executing and delivering to the Holders a supplemental
agreement to the Oil-Dri Guaranty in the form of this Joinder Agreement.
For valuable consideration, each of the undersigned (each a "New
Guarantor") severally (and not jointly, or jointly and severally) agrees as
follows:
1. Each of the New Guarantors has received a copy of, and has reviewed, the
Oil-Dri Guaranty and the Transaction Documents in existence on the date of this
Joinder Agreement and is executing and delivering this Joinder Agreement to the
Holders pursuant to Section 4B of the Oil-Dri Guaranty.
2. Effective from and after the date this Joinder Agreement is executed and
delivered to the Holders by any one of the New Guarantors (and irrespective of
whether this Joinder Agreement has been executed and delivered by any other
Person), such New Guarantor is, and shall be deemed for all purposes to be, a
Guarantor under the Oil-Dri Guaranty with the same force and effect, and subject
to the same agreements, representations, guarantees, indemnities, liabilities
and obligations, as if such New Guarantor was, effective as of the date of this
Joinder Agreement, an original signatory to the Oil-Dri Guaranty as a Guarantor.
In furtherance of the foregoing, each of the New Guarantors jointly and
severally guarantees to Holders in accordance with the provisions of the Oil-Dri
Guaranty the due and punctual payment and performance in full of each of the
Guarantied Obligations as each such Guarantied Obligation becomes due from time
to time (whether because of maturity, default, demand, acceleration or
otherwise) and understands, agrees and confirms that the Holders may enforce the
Oil-Dri Guaranty and this Joinder Agreement against such New Guarantor for the
benefit of the Holders up to the full
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amount of the Guarantied Obligations without proceeding against any other
Guarantor, Oil-Dri, any other Person or any collateral securing the Guarantied
Obligations. The terms and provisions of the Oil-Dri Guaranty are incorporated
by reference in this Joinder Agreement.
3. Upon this Joinder Agreement bearing the signature of any Person having
authority to bind any New Guarantor being delivered to any Holder, and
irrespective of whether this Joinder Agreement has been executed by any other
Person, this Joinder Agreement will be deemed to be finally and irrevocably
executed and delivered by, and be effective and binding on, and enforceable
against, such New Guarantor free from any promise or condition affecting or
limiting the liabilities of such New Guarantor and such New Guarantor shall be,
and shall be deemed for all purposes to be, a Guarantor under the Oil-Dri
Guaranty. No statement, representation, agreement or promise by any officer,
employee or agent of any Holder forms any part of this Joinder Agreement or the
Oil-Dri Guaranty or has induced the making of this Joinder Agreement or the
Oil-Dri Guaranty by any of the New Guarantors or in any way affects any of the
obligations or liabilities of any of the New Guarantors in respect of the
Guarantied Obligations.
4. This Joinder Agreement may be executed in counterparts. Each executed
counterpart shall be deemed to be an original and all counterparts taken
together shall constitute one and the same Joinder Agreement. Delivery of an
executed signature page to this Joinder Agreement by any New Guarantor by
facsimile transmission shall be as effective as delivery of a manually executed
copy of this Joinder Agreement by such New Guarantor.
5. This Joinder Agreement is a contract made under, and will for all
purposes be governed by and interpreted and enforced according to, the internal
laws of the State of Illinois excluding any conflict of laws rule or principle
which might refer these matters to the laws of another jurisdiction.
6. This Joinder Agreement and the Oil-Dri Guaranty shall be binding upon
each of the New Guarantors and the successors of each of the New Guarantors.
None of the New Guarantors may assign any of its obligations or liabilities in
respect of the Guarantied Obligations.
IN WITNESS OF WHICH this Joinder Agreement has been duly executed and
delivered by each of the New Guarantors as of the date indicated on the first
page of this Joinder Agreement.
[NEW GUARANTOR]
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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