Exhibit 4.6
================================================================================
PATTERSON DENTAL COMPANY
ABILITYONE PRODUCTS CORP.
ABILITYONE CORPORATION
PATTERSON DENTAL SUPPLY, INC.
WEBSTER VETERINARY SUPPLY, INC.
WEBSTER MANAGEMENT, LP
$350,000,000 Senior Notes
$70,000,000 3.14% Senior Notes, Series A-1, due November 25, 2006
$50,000,000 3.65% Senior Notes, Series A-2, due November 25, 2007
$30,000,000 4.14% Senior Notes, Series A-3, due November 25, 2008
$135,000,000 Floating Rate Senior Notes, Series B-1, due November 25, 2008
$65,000,000 Floating Rate Senior Notes, Series B-2, due November 25, 2010
----------
NOTE PURCHASE AGREEMENT
----------
Dated as of November 15, 2003
================================================================================
SERIES A-1 PPN: 70341 @ AA 7
SERIES A-2 PPN: 70341 @ AB 5
SERIES A-3 PPN: 70341 @ AC 3
SERIES B-1 PPN: 70341 @ AD 1
SERIES B-2 PPN: 70341 @ AE 9
TABLE OF CONTENTS
Section Page
- ------- ----
1. AUTHORIZATION OF NOTES.....................................................1
1.1. The Notes...........................................................1
1.2. Floating Interest Rate Provisions for Series B Notes................2
2. SALE AND PURCHASE OF NOTES.................................................3
3. CLOSING....................................................................3
4. CONDITIONS TO CLOSING......................................................4
4.1. Representations and Warranties......................................4
4.2. Performance; No Default.............................................4
4.3. Compliance Certificates.............................................4
4.4. Opinions of Counsel.................................................4
4.5. Purchase Permitted By Applicable Law, etc...........................4
4.6. Sale of Other Notes.................................................5
4.7. Payment of Special Counsel Fees.....................................5
4.8. Private Placement Number............................................5
4.9. Changes in Corporate Structure......................................5
4.10. Credit Agreement....................................................5
4.11. Proceedings and Documents...........................................5
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............................6
5.1. Organization; Power and Authority...................................6
5.2. Authorization, etc..................................................6
5.3. Disclosure..........................................................6
5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates....7
5.5. Financial Statements................................................7
5.6. Compliance with Laws, Other Instruments, etc........................8
5.7. Governmental Authorizations, etc....................................8
5.8. Litigation; Observance of Agreements, Statutes and Orders...........8
5.9. Taxes...............................................................8
5.10. Title to Property; Leases...........................................9
5.11. Licenses, Permits, etc..............................................9
5.12. Compliance with ERISA...............................................9
5.13. Private Offering by the Company....................................10
5.14. Use of Proceeds; Margin Regulations................................11
5.15. Existing Debt; Future Liens........................................11
5.16. Foreign Assets Control Regulations, Anti-Terrorism Order, etc......11
5.17. Status under Certain Statutes......................................12
5.18. Environmental Matters..............................................12
5.19. Solvency of Obligors...............................................12
6. REPRESENTATIONS OF THE PURCHASERS.........................................13
6.1. Purchase for Investment............................................13
i
6.2. Source of Funds....................................................13
7. INFORMATION AS TO COMPANY.................................................14
7.1. Financial and Business Information.................................14
7.2. Officer's Certificate..............................................17
7.3. Inspection.........................................................17
8. PREPAYMENT OF THE NOTES...................................................18
8.1. No Scheduled Prepayments...........................................18
8.2. Optional Prepayments...............................................18
8.3. Allocation of Partial Prepayments..................................20
8.4. Maturity; Surrender, etc...........................................20
8.5. Purchase of Notes..................................................21
8.6. Make-Whole Amount..................................................21
8.7. LIBOR Breakage Amount..............................................22
9. AFFIRMATIVE COVENANTS.....................................................23
9.1. Compliance with Law................................................23
9.2. Insurance..........................................................23
9.3. Maintenance of Properties..........................................23
9.4. Payment of Taxes and Claims........................................23
9.5. Corporate Existence, etc...........................................24
9.6. Ranking of Notes...................................................24
9.7. Subsidiary Guaranties..............................................24
10. NEGATIVE COVENANTS........................................................24
10.1. Consolidated Net Worth.............................................24
10.2. Consolidated Debt..................................................25
10.3. Interest Coverage..................................................25
10.4. Priority Debt......................................................25
10.5. Liens..............................................................25
10.6. Subsidiary Debt....................................................26
10.7. Mergers, Consolidations, etc.......................................27
10.8. Sale of Assets.....................................................28
10.9. Nature of Business.................................................28
10.10. Transactions with Affiliates.......................................29
11. EVENTS OF DEFAULT.........................................................29
12. REMEDIES ON DEFAULT, ETC..................................................31
12.1. Acceleration.......................................................31
12.2. Other Remedies.....................................................32
12.3. Rescission.........................................................32
12.4. No Waivers or Election of Remedies, Expenses, etc..................32
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.............................33
13.1. Registration of Notes..............................................33
13.2. Transfer and Exchange of Notes.....................................33
13.3. Replacement of Notes...............................................33
ii
14. PAYMENTS ON NOTES.........................................................34
14.1. Place of Payment...................................................34
14.2. Home Office Payment................................................34
15. EXPENSES, ETC.............................................................35
15.1. Transaction Expenses...............................................35
15.2. Survival...........................................................35
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..............35
17. AMENDMENT AND WAIVER......................................................36
17.1. Requirements.......................................................36
17.2. Solicitation of Holders of Notes...................................36
17.3. Binding Effect, etc................................................36
17.4. Notes held by Obligors, etc........................................37
18. NOTICES...................................................................37
19. REPRODUCTION OF DOCUMENTS.................................................37
20. CONFIDENTIAL INFORMATION..................................................38
21. SUBSTITUTION OF PURCHASER.................................................39
22. RELEASE OF OBLIGOR OR SUBSIDIARY GUARANTOR................................39
23. MISCELLANEOUS.............................................................40
23.1. Successors and Assigns.............................................40
23.2. Payments Due on Non-Business Days..................................40
23.3. Severability.......................................................40
23.4. Construction.......................................................40
23.5. Counterparts.......................................................40
23.6. Governing Law; Submission to Jurisdiction..........................40
SCHEDULE B -- Defined Terms
EXHIBIT 1(a) -- Form of Series A-1 Senior Note
EXHIBIT 1(b) -- Form of Series A-2 Senior Note
EXHIBIT 1(c) -- Form of Series A-3 Senior Note
EXHIBIT 1(d) -- Form of Series B-1 Senior Note
EXHIBIT 1(e) -- Form of Series B-2 Senior Note
iii
PATTERSON DENTAL COMPANY
ABILITYONE PRODUCTS CORP.
ABILITYONE CORPORATION
PATTERSON DENTAL SUPPLY, INC.
WEBSTER VETERINARY SUPPLY, INC.
WEBSTER MANAGEMENT, LP
1031 Mendota Heights Road
St. Paul, MN 55120
(651) 686-8984
Fax: (651) 686-[__]
$350,000,000 Senior Notes
$70,000,000 3.14% Senior Notes, Series A-1, due November 25, 2006
$50,000,000 3.65% Senior Notes, Series A-2, due November 25, 2007
$30,000,000 4.14% Senior Notes, Series A-3, due November 25, 2008
$135,000,000 Floating Rate Senior Notes, Series B-1, due November 25, 2008
$65,000,000 Floating Rate Senior Notes, Series B-2, due November 25, 2010
Dated as of November 15, 2003
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
PATTERSON DENTAL COMPANY, a Minnesota corporation (the "Company"),
ABILITYONE PRODUCTS CORP., a Delaware corporation ("AbilityOne"), ABILITYONE
CORPORATION, a Michigan corporation ("AbilityOne Corporation"), PATTERSON DENTAL
SUPPLY, INC., a Minnesota corporation ("PDSI"), WEBSTER VETERINARY SUPPLY, INC.,
a Minnesota corporation ("Webster"), and WEBSTER MANAGEMENT, LP, a Minnesota
limited partnership ("Webster Management" and, collectively with the Company,
AbilityOne, AbilityOne Corporation, PDSI and Webster, the "Obligors"), jointly
and severally agree with you as follows:
1. AUTHORIZATION OF NOTES.
1.1. The Notes.
The Obligors have authorized the issue and sale of $350,000,000
aggregate principal amount of its Senior Notes consisting of (i) $70,000,000
aggregate principal amount of their 3.14% Senior Notes, Series A-1, due November
25, 2006 (the "Series A-1 Notes");
(ii) $50,000,000 aggregate principal amount of their 3.65% Senior Notes, Series
A-2, due November 25, 2007 (the "Series A-2 Notes"); (iii) $30,000,000 aggregate
principal amount of their 4.14% Senior Notes, Series A-3, due November 25, 2008
(the "Series A-3 Notes" and, collectively with the Series A-1 Notes and the
Series A-2 Notes, the "Series A Notes"); (iv) $135,000,000 aggregate principal
amount of their Floating Rate Senior Notes, Series B-1, due November 25, 2008
(the "Series B-1 Notes"); and (v) $65,000,000 Floating Rate Senior Notes, Series
B-2, due November 25, 2010 (the "Series B-2 Notes" and, together with Series B-1
Notes, the "Series B Notes" and, the Series B Notes together with the Series A
Notes, the "Notes", such term to include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement). The Notes shall be
substantially in the forms set out in Exhibits 1(a) through 1(e), with such
changes therefrom, if any, as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined in Schedule B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
1.2. Floating Interest Rate Provisions for Series B Notes.
(a) Adjusted LIBOR Rate. "Adjusted LIBOR Rate" means, for each
Interest Period, the rate per annum equal to .75% plus LIBOR for such
Interest Period. For purposes of determining Adjusted LIBOR Rate, the
following terms have the following meanings:
"LIBOR" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) for deposits in U.S.
Dollars for a 3-month period that appears on the Bloomberg Financial
Markets Service Page BBAM-1 (or if such page is not available, the
Reuters Screen LIBO Page) as of 11:00 a.m. (London, England time) on
the date two Business Days before the commencement of such Interest
Period (or three Business Days before the commencement of the first
Interest Period).
"Reuters Screen LIBO Page" means the display designated as the
"LIBO" page on the Reuters Monitory Money Rates Service (or such
other page as may replace the LIBO page on that service) or such
other service as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying
British Bankers' Association Interest Settlement Rates for U.S.
Dollar deposits.
(b) Determination of the Adjusted LIBOR Rate. The Adjusted LIBOR
Rate shall be determined by the Company, and notice thereof shall be
given to the holders of the Series B Notes, within two Business Days
after the beginning of each Interest Period, together with (i) a copy of
the relevant screen used for the determination of LIBOR, (ii) a
calculation of the Adjusted LIBOR Rate for such Interest Period, (iii)
the number of days in such Interest Period, (iv) the date on which
interest for such Interest Period will be paid and (v) the amount of
interest to be paid to each holder of Series B Notes on such date. If the
holders of a majority in principal amount of the Series B Notes
outstanding do not concur with such determination by the Company, as
evidenced by a single written
2
notice delivered to the Company within 10 Business Days after receipt by
such holders of the notice delivered by the Company pursuant to the
immediately preceding sentence, the determination of the Adjusted LIBOR
Rate shall be made by such holders of the Notes, and any such
determination made in accordance with the provisions of this Agreement
shall be conclusive and binding absent manifest error.
(c) Interest Period. "Interest Period" means, for any period for
which interest is to be calculated or paid on the Series B Notes, the
period commencing on the Interest Payment Date on the Series B Notes and
continuing up to, but not including, the next February 25, May 25, August
25 or November 25, as the case may be; provided, however, that the first
Interest Period shall commence on the date of Closing and continue up to,
but not include, February 25, 2004.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Obligors
will issue and sell to you and each of the other purchasers named in Schedule A
(the "Other Purchasers"), and you and the Other Purchasers will purchase from
the Obligors, at the Closing provided for in Section 3, Notes in the principal
amount and series specified opposite your names in Schedule A at the purchase
price of 100% of the principal amount thereof. Your obligation hereunder and the
obligations of the Other Purchasers are several and not joint obligations and
you shall have no liability to any Person for the performance or non-performance
by any Other Purchaser hereunder.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you and the
Other Purchasers shall occur at the offices of Gardner Carton & Douglas LLP, 191
N. Wacker Drive, Suite 3700, Chicago, Illinois 60606 at 9:00 a.m., Chicago time,
at a closing (the "Closing") on November 25, 2003 or on such other Business Day
thereafter on or prior to December 15, 2003 as may be agreed upon by the Company
and you and the Other Purchasers. At the Closing the Obligors will deliver to
you the Notes to be purchased by you in the form of a single Note (or such
greater number of Notes in denominations of at least $100,000 as you may
request) dated the date of the Closing and registered in your name (or in the
name of your nominee), against delivery by you to the Obligors or their order of
immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company (for the
benefit of the Obligors) to account number 1731 0172 5153 at US Bank National
Association, Minneapolis Office, 601 2nd Avenue South, Minneapolis, MN 55402,
ABA No. 091000022. If at the Closing any Obligor fails to tender such Notes to
you as provided above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to your satisfaction, you shall, at your
election, be relieved of all further obligations under this Agreement, without
thereby waiving any rights you may have by reason of such failure or such
nonfulfillment.
3
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you
at the Closing is subject to the fulfillment to your satisfaction, prior to or
at the Closing, of the following conditions:
4.1. Representations and Warranties.
The representations and warranties of the Obligors in this Agreement
shall be correct when made and at the time of the Closing.
4.2. Performance; No Default.
The Obligors shall have performed and complied with all agreements
and conditions contained in this Agreement required to be performed or complied
with by them prior to or at the Closing and after giving effect to the issue and
sale of the Notes (and the application of the proceeds thereof as contemplated
by Section 5.14) no Default or Event of Default shall have occurred and be
continuing. Neither any Obligor nor any other Subsidiary shall have entered into
any transaction since the date of the Memorandum that would have been prohibited
by Section 10 had such Section applied since such date.
4.3. Compliance Certificates.
(a) Officer's Certificate. Each Obligor shall have delivered to you
an Officer's Certificate, dated the date of the Closing, certifying that
the conditions specified in Sections 4.1, 4.2 and 4.9 have been
fulfilled.
(b) Secretary's Certificate. Each Obligor shall have delivered to
you a certificate certifying as to the resolutions attached thereto and
other corporate proceedings relating to the authorization, execution and
delivery of the Notes and the Agreement.
4.4. Opinions of Counsel.
You shall have received opinions in form and substance satisfactory
to you, dated the date of the Closing (a) from Briggs and Morgan and from
Matthew L. Levitt, Esq., counsel to the Obligors, covering the matters set forth
in Exhibit 4.4(a) and covering such other matters incident to the transactions
contemplated hereby as you or your counsel may reasonably request (and the
Obligors instruct their counsel to deliver such opinion to you) and (b) from
Gardner Carton & Douglas LLP, your special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b) and covering
such other matters incident to such transactions as you may reasonably request.
4.5. Purchase Permitted By Applicable Law, etc.
On the date of the Closing your purchase of Notes shall (i) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by
4
insurance companies without restriction as to the character of the particular
investment, (ii) not violate any applicable law or regulation (including,
without limitation, Regulation U, T or X of the Board of Governors of the
Federal Reserve System) and (iii) not subject you to any tax, penalty or
liability under or pursuant to any applicable law or regulation, which law or
regulation was not in effect on the date hereof. If requested by you, you shall
have received an Officer's Certificate certifying as to such matters of fact as
you may reasonably specify to enable you to determine whether such purchase is
so permitted.
4.6. Sale of Other Notes.
Contemporaneously with the Closing the Obligors shall sell to the
Other Purchasers and the Other Purchasers shall purchase the Notes to be
purchased by them at the Closing as specified in Schedule A.
4.7. Payment of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the Obligors shall
have paid on or before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4, to the extent reflected in a
statement of such counsel rendered to the Obligors at least one Business Day
prior to the Closing.
4.8. Private Placement Number.
A Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained by Gardner
Carton & Douglas for each series of the Notes.
4.9. Changes in Corporate Structure.
Except as specified in Schedule 4.9, no Obligor shall have changed
its jurisdiction of organization or been a party to any merger or consolidation
and shall not have succeeded to all or any substantial part of the liabilities
of any other entity, at any time following the date of the most recent financial
statements referred to in Schedule 5.5.
4.10. Credit Agreement.
You shall have received a copy of the executed Credit Agreement.
4.11. Proceedings and Documents.
All corporate or partnership and other proceedings in connection
with the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be satisfactory to you and your
special counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
5
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Each Obligor represents and warrants to you that:
5.1. Organization; Power and Authority.
Each Obligor is a corporation or limited partnership duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or foreign limited
partnership and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each
Obligor has the corporate or partnership power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact
the business it transacts and proposes to transact, to execute and deliver this
Agreement and the Notes and to perform the provisions hereof and thereof.
5.2. Authorization, etc.
This Agreement and the Notes have been duly authorized by all
necessary corporate or partnership action on the part of each Obligor, and this
Agreement constitutes, and upon execution and delivery thereof each Note will
constitute, a legal, valid and binding obligation of each Obligor enforceable
against each Obligor in accordance with its terms, except as such enforceability
may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
5.3. Disclosure.
The Obligors, through their agents, Banc One Capital Markets, Inc.
and Banc of America Securities LLC, have delivered to you and each Other
Purchaser a copy of a Confidential Private Placement Memorandum, dated October
2003, including the Company's Annual Reports on Form 10-K for the fiscal years
ended April 26, 2003 and April 27, 2002, the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended July 26, 2003 and its Current Report on Form
8-K dated September 12, 2003 (the "Memorandum"), relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of the Company and
its Subsidiaries. Except as disclosed in Schedule 5.3, this Agreement, the
Memorandum, the documents, certificates or other writings delivered to you by or
on behalf of the Obligors in connection with the transactions contemplated
hereby and the financial statements listed in Schedule 5.5, taken as a whole, do
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made. Except as disclosed in the
Memorandum or as expressly described in Schedule 5.3, or in one of the
documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since April 26, 2003, there has
been no change in
6
the financial condition, operations, business or properties of the Company or
any Subsidiary except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact known
to any Obligor that could reasonably be expected to have a Material Adverse
Effect that has not been set forth herein or in the Memorandum or in the other
documents, certificates and other writings delivered to you by or on behalf of
the Obligors specifically for use in connection with the transactions
contemplated hereby.
5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete and
correct lists of: (i) the Company's Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its capital
stock or similar equity interests outstanding owned by the Company and
each other Subsidiary, (ii) the Company's Affiliates, other than
Subsidiaries, and (iii) the Company's directors and senior officers.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being owned
by the Company and its Subsidiaries have been validly issued, are fully
paid and nonassessable and are owned by the Company or another Subsidiary
free and clear of any Lien (except as otherwise disclosed in Schedule
5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly qualified
as a foreign corporation or other legal entity and is in good standing in
each jurisdiction in which such qualification is required by law, other
than those jurisdictions as to which the failure to be so qualified or in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each such Subsidiary has the
corporate or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement (other than this Agreement, the agreements
listed on Schedule 5.4 and customary limitations imposed by corporate or
limited partnership law statutes) restricting the ability of such
Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Company or any of its Subsidiaries that
owns outstanding shares of capital stock or similar equity interests of
such Subsidiary.
5.5. Financial Statements.
The Company has delivered to you and each Other Purchaser copies of
the financial statements of the Company and its Subsidiaries listed on Schedule
5.5. All of said financial statements (including in each case the related
schedules and notes) fairly present in all material respects the consolidated
financial position of the Company and its Subsidiaries as of the respective
dates specified in such Schedule and the consolidated results of their
operations
7
and cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
5.6. Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by each Obligor of this
Agreement and the Notes will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of any Obligor or any other Subsidiary under, any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate
charter or by-laws, or any other agreement or instrument to which any Obligor or
any other Subsidiary is bound or by which any Obligor or any other Subsidiary or
any of their respective properties may be bound or affected, (ii) conflict with
or result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or Governmental
Authority applicable to any Obligor or any other Subsidiary or (iii) violate any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to any Obligor or any other Subsidiary.
5.7. Governmental Authorizations, etc.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by any Obligor of this Agreement or the
Notes.
5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 5.8, there are no actions,
suits or proceedings pending or, to the knowledge of any Obligor,
threatened against or affecting any Obligor or any other Subsidiary or
any property of any Obligor or any other Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental
Authority that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(b) Neither any Obligor nor any other Subsidiary is in default
under any term of any agreement or instrument to which it is a party or
by which it is bound, or any order, judgment, decree or ruling of any
court, arbitrator or Governmental Authority or is in violation of any
applicable law, ordinance, rule or regulation (including Environmental
Laws and the USA Patriot Act) of any Governmental Authority, which
default or violation, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
5.9. Taxes.
The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before
8
they have become delinquent, except for any taxes and assessments (i) the amount
of which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company and its subsidiaries have been determined
by the Internal Revenue Service and paid for all fiscal years up to and
including the fiscal year ended April 25, 1998.
5.10. Title to Property; Leases.
The Company and its Subsidiaries have good and sufficient title to
their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.
5.11. Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in
the aggregate are Material, without known conflict with the rights of
others;
(b) to the best knowledge of each Obligor, no product of any
Obligor or any other Subsidiary infringes in any material respect any
license, permit, franchise, authorization, patent, copyright, service
mark, trademark, trade name or other right owned by any other Person; and
(c) to the best knowledge of each Obligor, there is no Material
violation by any Person of any right of any Obligor or any other
Subsidiary with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the any Obligor or
any other Subsidiary.
5.12. Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for
such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the
9
Code relating to employee benefit plans (as defined in Section 3 of
ERISA), and no event, transaction or condition has occurred or exists
that could reasonably be expected to result in the incurrence of any such
liability by the Company or any ERISA Affiliate, or in the imposition of
any Lien on any of the rights, properties or assets of the Company or any
ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to
such penalty or excise tax provisions or to Section 401(a)(29) or 412 of
the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under
each of the Plans (other than Multiemployer Plans), determined as of the
end of such Plan's most recently ended plan year on the basis of the
actuarial assumptions specified for funding purposes in such Plan's most
recent actuarial valuation report, did not exceed the aggregate current
value of the assets of such Plan allocable to such benefit liabilities.
The term "benefit liabilities" has the meaning specified in section 4001
of ERISA and the terms "current value" and "present value" have the
meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as
of the last day of the Company's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the Company and its
Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance
and sale of the Notes hereunder will not involve any transaction that is
subject to the prohibitions of section 406 of ERISA or in connection with
which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the
Code. The representation by the Company in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the accuracy of
your representation in Section 6.2 as to the sources of the funds used to
pay the purchase price of the Notes to be purchased by you.
5.13. Private Offering by the Company.
Neither any Obligor nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any person other than you and the Other Purchasers and not more than [_] other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither any Obligor nor anyone acting on its behalf has
taken, or will take, any action that would subject the issuance or sale of the
Notes to the registration requirements of Section 5 of the Securities Act.
10
5.14. Use of Proceeds; Margin Regulations.
The Obligors will apply the proceeds of the sale of the Notes to
refinance Debt of the Company as set forth in Schedule 5.14 and for general
corporate purposes. No part of the proceeds from the sale of the Notes will be
used, directly or indirectly, for the purpose of buying or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve any Obligor in
a violation of Regulation X of said Board (12 CFR 224) or to involve any broker
or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin
stock does not constitute more than 1% of the value of the consolidated assets
of the Company and its Subsidiaries and the Obligors do not have any present
intention that margin stock will constitute more than 1% of the value of such
assets. As used in this Section, the terms "margin stock" and "purpose of buying
or carrying" shall have the meanings assigned to them in said Regulation U.
5.15. Existing Debt; Future Liens.
(a) Except as described therein, Schedule 5.15 sets forth a
complete and correct list of all outstanding Debt of the Company and its
Subsidiaries as of November 15, 2003, since which date there has been no
Material change in the amounts, interest rates, sinking funds,
installment payments or maturities of the Debt of the Company or its
Subsidiaries. Neither any Obligor nor any other 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 any Obligor or any other Subsidiary
and no event or condition exists with respect to any Debt of any Obligor
or any other Subsidiary that would permit (or that with notice or the
lapse of time, or both, would permit) one or more Persons to cause such
Debt to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither any Obligor nor
any other Subsidiary has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a
Lien not permitted by Section 10.5.
5.16. Foreign Assets Control Regulations, Anti-Terrorism Order, etc.
Neither the sale of the Notes by the Obligors hereunder nor their
use of the proceeds thereof will violate (a) the Trading with the Enemy Act, as
amended, (b) 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, (c) the Anti-Terrorism Order or
(d) the United States Foreign Corrupt Practices Act of 1997, as amended. Without
limiting the foregoing, neither any Obligor nor any other Subsidiary (i) is a
blocked person described in Section 1 of the Anti-Terrorism Order or (ii)
engages in any dealings or transactions, or is otherwise associated, with any
such person.
11
5.17. Status under Certain Statutes.
Neither any Obligor nor any other Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended, the Public
Utility Holding Company Act of 1935, as amended, the ICC Termination Act, as
amended, or the Federal Power Act, as amended.
5.18. Environmental Matters.
Neither any Obligor nor any other Subsidiary has knowledge of any
claim or has received any notice of any claim, and no proceeding has been
instituted raising any claim against any Obligor or any other Subsidiary or any
of their respective real properties now or formerly owned, leased or operated by
any of them or other assets, alleging any damage to the environment or violation
of any Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise disclosed
to you in writing,
(a) neither any Obligor nor any other Subsidiary has knowledge of
any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably be expected
to result in a Material Adverse Effect;
(b) neither any Obligor nor any other Subsidiary has stored any
Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them and has not disposed of any Hazardous Materials
in a manner contrary to any Environmental Laws in each case in any manner
that could reasonably be expected to result in a Material Adverse Effect;
and
(c) all buildings on all real properties now owned, leased or
operated by any Obligor or any other Subsidiary are in compliance with
applicable Environmental Laws, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect.
5.19. Solvency of Obligors.
After giving effect to the transactions contemplated herein, (i) the
present value of the assets of each Obligor, at a fair valuation, is in excess
of the amount that will be required to pay its probable liability on its
existing debts as said debts become absolute and matured, (ii) each Obligor has
received reasonably equivalent value for issuing and selling the Notes, (iii)
the property remaining in the hands of each Obligor is not an unreasonably small
capital, and (iv) each Obligor is able to pay its debts as they mature.
12
6. REPRESENTATIONS OF THE PURCHASERS.
6.1. Purchase for Investment.
You represent that you are purchasing the Notes for your own account
or for one or more separate accounts maintained by you or for the account of one
or more pension or trust funds and not with a view to the distribution thereof,
provided that the disposition of your or their property shall at all times be
within your or their control. You understand that the Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Obligors are
not required to register the Notes. You represent that you are an "accredited
investor" within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
of Regulation D under the Securities Act
6.2. Source of Funds.
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an "insurance company general account" (as the
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
(b) 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
(c) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or
(ii) a bank collective investment fund, within the meaning of PTE 91-38
(issued July 12, 1991) and, except as you have disclosed to the Company
in writing pursuant to this paragraph (c), no employee benefit plan or
group of plans maintained by the same employer or employee
13
organization beneficially owns more than 10% of all assets allocated to
such pooled separate account or collective investment fund; or
(d) 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 (i) the identity
of such QPAM and (ii) the names of all employee benefit plans whose
assets are included in such investment fund have been disclosed to the
Company in writing pursuant to this clause (d); or
(e) 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 (i) the identity of such INHAM and (ii) 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 (e); or
(f) the Source is a governmental plan; or
(g) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans,
each of which has been identified to the Company in writing pursuant to
this paragraph (g); or
(h) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
7.1. Financial and Business Information
The Company will deliver to each holder of Notes that is an
Institutional Investor:
14
(a) Quarterly Statements -- within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than
the last quarterly fiscal period of each such fiscal year), duplicate
copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter,
(ii) consolidated statements of income 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, and
(iii) consolidated statements of cash flows of the Company and
its Subsidiaries for such quarter or (in the case of the second and
third quarters) for the portion of the fiscal year ending with such
quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified
above of copies of the Company's Quarterly Report on Form 10-Q prepared
in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a);
(b) Annual Statements -- within 105 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by an opinion of independent certified public
accountants of recognized national standing, which opinion shall state
that such financial statements present fairly, in all material respects,
the financial position of the companies being reported upon and their
results of operations and cash flows and have been prepared in conformity
with GAAP, and that the examination of such accountants in connection
with such financial statements has been made in accordance with generally
accepted auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances, provided that the delivery
within the time period specified above of the Company's Annual Report on
Form 10-K for such fiscal year (together with the Company's annual report
to shareholders, if any, prepared pursuant to Rule 14a-3 under the
Exchange Act) prepared
15
in accordance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by any Obligor or any other Subsidiary to public
securities holders generally, and (ii) each regular or periodic report,
each registration statement other than registration statements on Form
S-8 (without exhibits except as expressly requested by such holder), and
each prospectus and all amendments thereto filed by any Obligor or any
other Subsidiary with the Securities and Exchange Commission and of all
press releases and other statements made available generally by any
Obligor or any other Subsidiary to the public concerning developments
that are Material;
(d) Notice of Default or Event of Default -- promptly, and in any
event within five Business Days after a Responsible Officer becoming
aware of the existence of any Default or Event of Default or that any
Person has given any notice or taken any action with respect to a claimed
default hereunder or that any Person has given notice or taken any action
with respect to a claimed default of the type referred to in Section
11(f), a written notice specifying the nature and period of existence
thereof and what action the Obligors are taking or propose to take with
respect thereto;
(e) ERISA Matters -- promptly, and in any event within five
Business Days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(i) with respect to any Plan, any reportable event, as
defined in section 4043(b) of ERISA and the regulations thereunder,
for which notice thereof has not been waived pursuant to such
regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by the PBGC with respect to such Multiemployer
Plan; or
(iii) any event, transaction or condition that could result in
the incurrence of any liability by the Company or any ERISA
Affiliate pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit
plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax provisions,
if such liability or Lien, taken together with any other such
liabilities or Liens then existing, could reasonably be expected to
have a Material Adverse Effect;
16
(f) Notices from Governmental Authority -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to any
Obligor or any other Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect; and
(g) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs,
financial condition, assets or properties of any Obligor or any other
Subsidiary or relating to the ability of any Obligor to perform its
obligations hereunder and under the Notes as from time to time may be
reasonably requested by any such holder of Notes.
7.2. Officer's Certificate.
Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or (b) shall be accompanied by a certificate of a
Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.1 through Section 10.10,
inclusive, during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such
Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and
(b) Event of Default -- a statement that such officer has reviewed
the relevant terms hereof and has made, or caused to be made, under his
or her supervision, a review of the transactions and conditions of the
Company and its Subsidiaries from the beginning of the quarterly or
annual period covered by the statements then being furnished to the date
of the certificate and that such review shall not have disclosed the
existence during such period of any condition or event that constitutes a
Default or an Event of Default or, if any such condition or event existed
or exists (including any such event or condition resulting from the
failure of any Obligor or any other 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.
7.3. Inspection.
The Company will 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
17
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.
8. PREPAYMENT OF THE NOTES.
8.1. No Scheduled Prepayments.
No regularly scheduled prepayments are due on the Notes prior to
their stated maturity.
8.2. Optional Prepayments.
(a) Series A Notes. The Obligors may, at their option, upon notice
as provided below, prepay at any time all, or from time to time any part
of, one or more series of the Series A Notes in an amount not less than
$1,000,000 in the aggregate in the case of a partial prepayment, at 100%
of the principal amount so prepaid, plus the Make-Whole Amount determined
for the prepayment date with respect to such principal amount. The
Company will give each holder of each series of the Series A Notes to be
prepaid written notice of each optional prepayment under this Section
8.2(a) not less than 30 days and not more than 60 days prior to the date
fixed for such prepayment. Each such notice shall specify such date, the
aggregate principal amount of each series of the Series A Notes to be
prepaid on such date, the principal amount of each Series A Note held by
such holder to be prepaid (determined in accordance with Section 8.3),
and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid, and shall be accompanied by a certificate
of a Senior Financial Officer as to the estimated Make-Whole Amount due
in connection with such prepayment (calculated as if the date of such
notice were the date of the prepayment), setting forth the details of
such computation. Two Business Days prior to such prepayment, the Company
shall deliver to each holder of Series A Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as
of the specified prepayment date.
(b) Series B Notes. The Series B Notes may not be prepaid prior to
November 25, 2004. At any time on or after November 25, 2004, the
Obligors may, at their option, upon notice as provided below, prepay all,
or from time to time any part of, one or both series of the Series B
Notes in an amount not less than $1,000,000 in the
18
aggregate in the case of a partial prepayment, at 100% of the principal
amount so prepaid and if such prepayment is to occur on any date other
than an Interest Payment Date, the LIBOR Breakage Amount, if any. The
Company will give each holder of each series of Series B Notes to be
prepaid written notice of each optional prepayment under this Section
8.2(b) not less than 30 days and not more than 60 days prior to the date
fixed for such prepayment. Each such notice shall specify such date, the
aggregate principal amount of each series of the Series B Notes to be
prepaid on such date, the principal amount of each Series B Note held by
such holder to be prepaid (determined in accordance with Section 8.3),
and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid.
(c) Offer to Prepay at Par Upon Certain Sales of Assets.
(i) Notice and Offer. In the event of any Debt Prepayment
Application under Section 10.8 of this Agreement, the Obligors will,
within 10 days of the occurrence of the Transfer (a "Debt Prepayment
Transfer") in respect of which an offer to prepay the Notes (the
"Prepayment Offer") is being made to comply with the requirements
for a Debt Prepayment Application (as set forth in the definition
thereof), give notice of such Debt Prepayment Transfer to each
holder of Notes. Such notice shall contain, and shall constitute, an
irrevocable offer to prepay, at the election of each holder, a
portion of the Notes held by such holder equal to such holder's
Ratable Portion of the Net Proceeds Amount in respect of such Debt
Prepayment Transfer on a date specified in such notice (the
"Transfer Prepayment Date") that is not less than 30 days and not
more than 60 days after the date of such notice.
(ii) Acceptance and Payment. To accept such Prepayment Offer,
a holder of Notes shall cause a notice of such acceptance to be
delivered to the Company not later than 10 days prior to the
Transfer Prepayment Date. Failure to accept such offer in writing
within 10 days prior to the Transfer Prepayment Date shall be deemed
to be rejection of the Prepayment Offer. If so accepted by any
holder of a Note, such Prepayment Offer equal to not less than such
holder's Ratable Portion of the Net Proceeds Amount in respect of
such Debt Prepayment Transfer, together with any additional amount
offered to and accepted by such holder pursuant to the following
sentence shall be due and payable on the Transfer Prepayment Date.
If any holder of Notes fails to accept such Prepayment Offer, such
holder's Ratable Portion of the Net Proceeds Amount shall be offered
pro rata to each holder of Notes that has accepted such Prepayment
Offer. A Prepayment Offer pursuant to this Section 8.2(c) shall be
made at 100% of the principal amount of such Notes being so prepaid,
together with interest on such principal amount then being prepaid
accrued to the Transfer Prepayment Date, plus the LIBOR Breakage
Amount, if any.
(iii) Officer's Certificate. Each offer to prepay the Notes
pursuant to this Section 8.2(c) shall be accompanied by a
certificate, executed by a Senior Financial Officer and dated the
date of such offer, specifying:
19
(A) the Transfer Prepayment Date and the Net Proceeds
Amount in respect of the applicable Debt Prepayment Transfer;
(B) that such offer is being made pursuant to Section
8.2(c) and Section 10.8 of this Agreement;
(C) the principal amount of each Note offered to be
prepaid;
(D) the interest that would be due on each such Note
offered to be prepaid, accrued to the date fixed for payment;
(E) whether any LIBOR Breakage Amount will be payable;
and
(F) in reasonable detail, the nature of the Transfer
giving rise to such Debt Prepayment Transfer.
(d) Prepayments During Defaults or Events of Defaults. Anything in
Section 8.2(a) and (b) to the contrary notwithstanding, during the
continuance of a Default or Event of Default the Obligors may prepay less
than all of the outstanding Notes pursuant to Sections 8.2(a) and 8.2(b)
only if such prepayment is allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof not theretofore called for prepayment.
(e) Notice Concerning Status of Holders of Notes. Promptly after
each prepayment date under Section 8.2(a) or (b) or Transfer Prepayment
Date under Section 8.2(c) and the making of all prepayments contemplated
thereunder (and, in any event, within 30 days thereafter), the Company
will deliver to each holder of Notes a certificate signed by a Senior
Financial Officer containing a list of the then current holders of Notes
(together with their addresses) and setting forth as to each such holder
the outstanding principal amount of Notes held by such holder at such
time.
8.3. Allocation of Partial Prepayments.
In the case of each partial prepayment of Notes of a series pursuant
to Section 8.2(a) or (b), the principal amount of the Notes of the series to be
prepaid shall be allocated among all of the Notes of such series at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment.
8.4. Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this Section 8,
the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any, and LIBOR Breakage Amount, if any. From and after such date, unless the
Obligors shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, or LIBOR Breakage
20
Amount, if any, as aforesaid, interest on such principal amount shall cease to
accrue. Any Note paid or prepaid in full shall be surrendered to the Company and
canceled and shall not be reissued, and no Note shall be issued in lieu of any
prepaid principal amount of any Note.
8.5. Purchase of Notes.
The Obligors will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by any Obligor or any Affiliate pursuant to
any payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.
8.6. Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any Series A
Note, an amount equal to the excess, if any, of the Discounted Value of the
Remaining Scheduled Payments with respect to the Called Principal of such Series
A Note over the amount of such Called Principal, provided that the Make-Whole
Amount may in no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:
"Called Principal" means, with respect to any Series A Note, the
principal of such Series A Note that is to be prepaid pursuant to Section
8.2(a) or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal of
any Series A Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their
respective scheduled due dates to the Settlement Date with respect to
such Called Principal, in accordance with accepted financial practice and
at a discount factor (applied on the same periodic basis as that on which
interest on the Series A Notes is payable) equal to the Reinvestment
Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal of
any Series A Note, .50% over the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City time) on the second
Business Day preceding the Settlement Date with respect to such Called
Principal, on the display designated as the "PX1 Screen" on the Bloomberg
Financial Market Service (or such other display as may replace the PX1
Screen on Bloomberg Financial Market Service) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date, or (ii) if such
yields are not reported as of such time or the yields reported as of such
time are not ascertainable, the Treasury Constant Maturity Series Yields
reported, for the latest day for which such yields have been so reported
as of the second Business Day preceding the Settlement Date with respect
to such Called Principal, in Federal Reserve Statistical Release H.15
(519) (or any
21
comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date. Such implied yield
will be determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the maturity closest to and
greater than the Remaining Average Life and (2) the actively traded U.S.
Treasury security with the maturity closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum of
the products obtained by multiplying (a) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (b)
the number of years (calculated to the nearest one-twelfth year) that
will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Series A Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with respect
to such Called Principal if no payment of such Called Principal were made
prior to its scheduled due date, provided that if such Settlement Date is
not a date on which interest payments are due to be made under the terms
of the Series A Notes, then the amount of the next succeeding scheduled
interest payment will be reduced by the amount of interest accrued to
such Settlement Date and required to be paid on such Settlement Date
pursuant to Section 8.2(a) or 12.1.
"Settlement Date" means, with respect to the Called Principal of any
Series A Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2(a) or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
8.7. LIBOR Breakage Amount.
The term "LIBOR Breakage Amount" means any loss, cost or expense
reasonably incurred by any holder of a Series B Note as a result of any payment
or prepayment of such Note (whether voluntary, mandatory, automatic, by reason
of acceleration or otherwise) on a day other than an Interest Payment Date or at
scheduled maturity thereof, and any loss or expense arising from the liquidation
or reemployment of funds obtained by such holder or from fees payable to
terminate the deposits from which such funds were obtained. Any such loss, cost
or expense shall be limited to the time period from the date of such prepayment
through the earlier of the next Interest Payment Date or the maturity of such
Series B Note. Each holder of a Series B Note shall determine the LIBOR Breakage
Amount with respect to the principal amount of its Series B Notes then being
paid or prepaid (or required to be paid or prepaid) by written notice to the
Company setting forth such determination in reasonable detail not less than two
Business Days prior to the date of prepayment. Each such determination shall be
conclusive absent manifest error.
22
9. AFFIRMATIVE COVENANTS.
The Obligors, jointly and severally, covenant that so long as any of
the Notes are outstanding:
9.1. Compliance with Law.
The Obligors will, and will cause each other Subsidiary 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.
9.2. Insurance.
The Obligors will, and will cause each other Subsidiary to,
maintain, with financially sound and reputable insurers, insurance with respect
to their respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated.
9.3. Maintenance of Properties.
The Obligors will, and will cause each other Subsidiary to, maintain
and keep, or cause to be maintained and kept, their respective properties in
good repair, working order and condition (other than ordinary wear and tear), so
that the business carried on in connection therewith may be properly conducted
at all times, provided that this Section shall not prevent any Obligor or any
other 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.
9.4. Payment of Taxes and Claims.
The Obligors will, and will cause each other Subsidiary to, file all
income tax or similar tax returns required to be filed in any jurisdiction and
to pay and discharge all taxes shown to be due and payable on such returns and
all other taxes, assessments, governmental charges, or levies 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 any Obligor or any other
Subsidiary, provided that neither any Obligor nor any other Subsidiary need pay
any such tax or assessment or claims if
23
(i) the amount, applicability or validity thereof is contested by such Obligor
or such Subsidiary on a timely basis in good faith and in appropriate
proceedings, and an Obligor or another Subsidiary has established adequate
reserves therefor in accordance with GAAP on its books or (ii) the nonpayment of
all such taxes and assessments in the aggregate could not reasonably be expected
to have a Material Adverse Effect.
9.5. Corporate Existence, etc.
Subject to Sections 10.7 and 10.8, each Obligor will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Sections 10.7 and 10.8, the Company will at all times preserve and keep in full
force and effect the corporate existence of each of its Subsidiaries (unless
merged into the Company or a Subsidiary) and all rights and franchises of the
Company and its Subsidiaries unless, in the good faith judgment of the Company,
the termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.
9.6. Ranking of Notes.
The Notes and the Obligors' obligations under this Agreement will
rank at least pari passu with all of the Obligors' outstanding unsecured Senior
Debt.
9.7. Subsidiary Guaranties.
The Obligors will not permit any other Subsidiary to become a
borrower under, or to directly or indirectly guarantee any obligations of any
Obligor under, the Credit Agreement unless such Subsidiary, concurrently
therewith, (i) executes and delivers a guaranty in substantially the form of
Exhibit 9.7 (the "Subsidiary Guaranty"), or, if such Subsidiary Guaranty has
previously been delivered, becomes a party to the Subsidiary Guaranty and (ii)
provides an opinion of counsel to the holders of Notes that the Subsidiary
Guaranty is enforceable against such Subsidiary in accordance with its terms,
except to the extent that enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application relating to or affecting the enforcement of the rights of creditors
or by equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
10. NEGATIVE COVENANTS.
The Obligors, jointly and severally, covenant that so long as any of
the Notes are outstanding:
10.1. Consolidated Net Worth.
The Company will not permit Consolidated Net Worth at any time to be
less than $500,000,000 plus the cumulative sum of 25% of Consolidated Net Income
(but only if a positive number) for each fiscal quarter ending after October 25,
2003.
24
10.2. Consolidated Debt.
The Company will not permit the ratio of Consolidated Debt (as of
any date) to Consolidated Operating Cash Flow (for the Company's then most
recently completed four fiscal quarters) to be greater than 3.50 to 1.00 at any
time.
10.3. Interest Coverage.
The Company will not permit the ratio of Consolidated Income
Available for Interest Charges to Consolidated Interest Charges (in each case
for the Company's then most recently completed four fiscal quarters) to be less
than 2.50 to 1.00 at any time.
10.4. Priority Debt.
The Company will not permit Priority Debt to exceed 20% of
Consolidated Net Worth (as of the end of the Company's then most recently
completed fiscal quarter) at any time.
10.5. Liens.
The Company will not, and will not permit any Subsidiary to, permit
to exist, create, assume or incur, directly or indirectly, any Lien on its
properties or assets, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments or governmental charges not then
due and delinquent or the nonpayment of which is permitted by Section
9.4;
(b) any attachment or judgment Lien, unless the judgment it secures
has not, within 60 days after the entry thereof, been discharged or
execution thereof stayed pending appeal, or has not been discharged
within 60 days after the expiration of any such stay;
(c) Liens incidental to the conduct of business or the ownership of
properties and assets (including landlords', lessors', carriers',
warehousemen's, mechanics', materialmen's and other similar Liens) and
Liens to secure the performance of bids, tenders, leases or trade
contracts, or to secure statutory obligations (including obligations
under workers compensation, unemployment insurance and other social
security legislation), surety or appeal bonds or other Liens of like
general nature incurred in the ordinary course of business and not in
connection with the borrowing of money;
(d) encumbrances in the nature of leases, subleases, zoning
restrictions, easements, rights of way, minor survey exceptions and other
rights and restrictions of record on the use of real property and defects
in title arising or incurred in the ordinary course of business, which,
individually and in the aggregate, do not materially impair the use of
the property or assets subject thereto by the Company or such Subsidiary
in their business or which relate only to assets that in the aggregate
are not Material;
(e) Liens securing Debt existing on property or assets of the
Company or any Subsidiary as of the date of this Agreement that are
described in Schedule 10.5;
25
(f) Liens (i) existing on property at the time of its acquisition
by the Company or a Subsidiary and not created in contemplation thereof,
whether or not the Debt secured by such Lien is assumed by the Company or
a Subsidiary; or (ii) on property (including (Capital Leases) created
contemporaneously with its acquisition or within 180 days of the
acquisition or completion of construction or improvements thereof to
secure or provide for all or a portion of the acquisition price or cost
of construction or improvements of such property after the date of
Closing; or (iii) existing on property of a Person at the time such
Person is merged or consolidated with, or becomes a Subsidiary of, or
substantially all of its assets are acquired by, the Company or a
Subsidiary and not created in contemplation thereof; provided that such
Liens do not extend to additional property of the Company or any
Subsidiary (other than property that is an improvement to or is acquired
for specific use in connection with the subject property) and that the
aggregate principal amount of Debt secured by each such Lien does not
exceed the lesser of cost of acquisition or construction or the fair
market value (determined in good faith by one or more officers of the
Company to whom authority to enter into the transaction has been
delegated by the board of directors of the Company) of the property
subject thereto;
(g) Liens resulting from extensions, renewals or replacements of
Liens permitted by paragraphs (e) and (f), provided that (i) there is no
increase in the principal amount or decrease in maturity of the Debt
secured thereby at the time of such extension, renewal or replacement,
(ii) any new Lien attaches only to the same property theretofore subject
to such earlier Lien and (iii) immediately after such extension, renewal
or replacement no Default or Event of Default would exist;
(h) Liens securing Debt of a Subsidiary owed to the Company or to
another Subsidiary;
(i) Liens arising in connection with a Contract Purchase Facility
or a Permitted Receivables Securitization Transaction on the assets
transferred in connection therewith, including proceeds and cash;
(j) Liens securing Debt not otherwise permitted by paragraphs (a)
through (i) above, provided that, after giving effect to the incurrence
of the Debt so secured, Priority Debt does not exceed 20% of Consolidated
Net Worth as of the end of the Company's then most recently completed
fiscal quarter.
10.6. Subsidiary Debt.
The Company will not at any time permit any Subsidiary, directly or
indirectly, to create, incur, assume, guarantee, have outstanding, or otherwise
become or remain directly or indirectly liable for, any Debt other than:
(a) Debt outstanding on the date hereof that is described on
Schedule 10.6;
(b) Debt owed to the Company or a Wholly Owned Subsidiary;
(c) Debt of the Obligors outstanding under the Credit Agreement;
26
(d) The Notes;
(e) Debt of a Subsidiary outstanding at the time of its acquisition
by the Company, provided that (i) such Debt was not incurred in
contemplation of becoming a Subsidiary, and (ii) at the time of such
acquisition and after giving effect thereto, no Default or Event of
Default exists or would exist;
(f) Debt not otherwise permitted by the preceding clauses (a)
through (e), provided that immediately before and after giving effect
thereto and to the application of the proceeds thereof,
(i) no Default or Event of Default exists, and
(ii) Priority Debt does not exceed 20% of Consolidated Net
Worth as of the end of the Company's then most recently completed
fiscal quarter.
10.7. Mergers, Consolidations, etc.
(a) The Company will not consolidate with or merge with any other
Person or convey, transfer, sell or lease all or substantially all of its
assets in a single transaction or series of transactions to any Person
unless:
(i) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by conveyance,
transfer, sale or lease all or substantially all of the assets of
the Company as an entirety, as the case may be, is a solvent
corporation organized and existing under the laws of the United
States or any state thereof (including the District of Columbia),
and, if the Company is not such corporation, such corporation (A)
shall have executed and delivered to each holder of any Notes its
assumption of the due and punctual performance and observance of
each covenant and condition of this Agreement and the Notes and (B)
shall have caused to be delivered to each holder of any Notes an
opinion of nationally recognized independent counsel or other
independent counsel reasonably satisfactory to the Required Holders,
to the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and comply
with the terms hereof; and
(ii) immediately before and after giving effect to such
transaction, no Default or Event of Default shall have occurred and
be continuing.
No such conveyance, transfer, sale or lease of all or substantially all
of the assets of the Company shall have the effect of releasing the
Company or any successor corporation that shall theretofore have become
such in the manner prescribed in this Section 10.7 from its liability
under this Agreement or the Notes.
(b) The Company will not permit any Subsidiary that is an Obligor
to consolidate with or merge with any other Subsidiary that is not an
Obligor (a "Non-Obligor Subsidiary") if such Non-Obligor Subsidiary is
the successor or survivor, or
27
convey, transfer, sell or lease all or substantially all of its assets in
a single transaction or series of transactions to any Non-Obligor
Subsidiary, unless:
(i) such Non-Obligor Subsidiary (A) is a solvent corporation
organized and existing under the laws of the United States or any
state thereof (including the District of Columbia), (B) shall have
executed and delivered to each holder of any Notes its assumption of
the due and punctual performance and observance of each covenant and
condition of this Agreement and the Notes and (C) shall have caused
to be delivered to each holder of any Notes an opinion of nationally
recognized independent counsel or other independent counsel
reasonably satisfactory to the Required Holders, to the effect that
all agreements or instruments effecting such assumption are
enforceable in accordance with their terms and comply with the terms
hereof; and
(ii) immediately before and after giving effect to such
transaction, no Default or Event of Default shall have occurred and
be continuing.
10.8. Sale of Assets.
Except as permitted by Section 10.7, the Company will not, and will
not permit any Subsidiary to, make any Asset Disposition unless:
(a) in the good faith opinion of the Company, the Asset Disposition
is in exchange for consideration having a fair market value at least
equal to that of the property exchanged and is in the best interest of
the Company or such Subsidiary;
(b) immediately after giving effect to the Asset Disposition, no
Default or Event of Default would exist; and
(c) immediately after giving effect to the Asset Disposition, the
Disposition Value of all property that was the subject of any Asset
Disposition occurring in the then current fiscal year of the Company
would not exceed 15% of Consolidated Total Assets as of the end of the
then most recently completed fiscal year of the Company; and
If the Net Proceeds Amount for any Transfer is applied to a Debt Prepayment
Application or a Property Reinvestment Application within 365 days after such
Transfer, then such Transfer, only for the purpose of determining compliance
with paragraph (c) of this Section 10.8 as of any date, shall be deemed not to
be an Asset Disposition.
10.9. Nature of Business.
The Company will not, and will not permit any Subsidiary to, engage
in any business if, as a result, the general nature of the business in which the
Company and its Subsidiaries, taken as a whole, would then be engaged would be
substantially changed from the general nature of the business in which the
Company and its Subsidiaries, taken as a whole, are engaged on the date of this
Agreement as described in the Memorandum.
28
10.10. Transactions with Affiliates.
The Company will not and will not permit any Subsidiary to enter
into directly or indirectly any Material transaction or Material group of
related transactions (including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than the Company or another Subsidiary), except in the ordinary
course of the Company's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than would
be obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions
or events shall occur and be continuing:
(a) the Obligors default in the payment of any principal,
Make-Whole Amount, if any, or LIBOR Breakage Amount, if any, on any Note
when the same becomes due and payable, whether at maturity or at a date
fixed for prepayment or by declaration or otherwise; or
(b) the Obligors default in the payment of any interest on any Note
for more than five Business Days after the same becomes due and payable;
or
(c) the Obligors default in the performance of or compliance with
any term contained in Section 7.1(d) or in Sections 10.1 through 10.10;
or
(d) the Obligors default in the performance of or compliance with
any term contained herein (other than those referred to in paragraphs
(a), (b) and (c) of this Section 11) and such default is not remedied
within 30 days after the earlier of (i) a Responsible Officer obtaining
actual knowledge of such default or (ii) the Company receiving written
notice of such default from any holder of a Note; or
(e) any representation or warranty made in writing by or on behalf
of the Obligors or by any officer of any Obligor in this Agreement or in
any writing furnished in connection with the transactions contemplated
hereby or thereby proves to have been false or incorrect in any material
respect on the date as of which made; or
(f) (i) any Obligor or any other 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 libor-breakage amount or
interest on any Debt that is outstanding in an aggregate principal amount
of at least $10,000,000 beyond any period of grace provided with respect
thereto, or (ii) any Obligor or any other Subsidiary is in default in the
performance of or compliance with any term of any evidence of any Debt
that is outstanding in an aggregate principal amount of at least
$10,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such
default or condition such Debt has become, or has been declared (or one
or more Persons are entitled to declare such Debt to be), due and payable
before its
29
stated maturity or before its regularly scheduled dates of payment, or
(iii) as a consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the holder of
Debt to convert such Debt into equity interests), (A) any Obligor or any
other Subsidiary has become obligated to purchase or repay Debt before
its regular maturity or before its regularly scheduled dates of payment
in an aggregate outstanding principal amount of at least $10,000,000 or
(B) one or more Persons have the right to require any Obligor or any
other Subsidiary so to purchase or repay such Debt; or
(g) any Obligor or any other Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they
become due, (ii) files, or consents by answer or otherwise to the filing
against it of, a petition for relief or reorganization or arrangement or
any other petition in bankruptcy, for liquidation or to take advantage of
any bankruptcy, insolvency, reorganization, moratorium or other similar
law of any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by any Obligor or any other
Subsidiary, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for
relief or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency law of
any jurisdiction, or ordering the dissolution, winding-up or liquidation
of any Obligor or any other Subsidiary, or any such petition shall be
filed against any Obligor or any other Subsidiary and such petition shall
not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating more than $10,000,000 are rendered against one or more of the
Obligors and any other Subsidiaries, which judgments are not, within 60
days after entry thereof, bonded, discharged or stayed pending appeal, or
are not discharged within 60 days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (ii) a notice of intent
to terminate any Plan shall have been or is reasonably expected to be
filed with the PBGC or the PBGC shall have instituted proceedings under
ERISA section 4042 to terminate or appoint a trustee to administer any
Plan or the PBGC shall have notified the Company or any ERISA Affiliate
that a Plan may become a subject of any such proceedings, (iii) the
aggregate "amount of unfunded benefit liabilities" (within the meaning of
section 4001(a)(18) of ERISA) under all Plans determined in accordance
with Title IV of ERISA, shall be greater than $10,000,000, (iv) the
Company or any ERISA Affiliate shall have incurred or is reasonably
expected to incur any liability
30
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, (v) the
Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or
(vi) the Company or any Subsidiary establishes or amends any employee
welfare benefit plan that provides post-employment welfare benefits in a
manner that would increase the liability of the Company or any Subsidiary
thereunder; and any such event or events described in clauses (i) through
(vi) above, either individually or together with any other such event or
events, could reasonably be expected to have a Material Adverse Effect;
or
(k) any Subsidiary Guarantor defaults in the performance of or
compliance with any term contained in the Subsidiary Guaranty or the
Subsidiary Guaranty ceases to be in full force and effect as a result of
acts taken by the Company or any Subsidiary Guarantor, except as provided
in Section 22, or is declared to be null and void in whole or in material
part by a court or other governmental or regulatory authority having
jurisdiction or the validity or enforceability thereof shall be contested
by any of the Company or any Subsidiary Guarantor or any of them
renounces any of the same or denies that it has any or further liability
thereunder.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1. Acceleration.
(a) If an Event of Default with respect to any Obligor described in
paragraph (g) or (h) of Section 11 (other than an Event of Default
described in clause (i) of paragraph (g) or described in clause (vi) of
paragraph (g) by virtue of the fact that such clause encompasses clause
(i) of paragraph (g)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing,
holders of at least 51% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices
to the Obligors, declare all the Notes then outstanding to be immediately
due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes
at the time outstanding affected by such Event of Default may at any
time, at its or their option, by notice or notices to the Company,
declare all the Notes held by it or them to be immediately due and
payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (w) all accrued and
unpaid interest thereon, (x) any applicable Make-Whole Amount determined in
respect of such principal amount (to the full extent permitted by applicable
law), and (y) any LIBOR Breakage Amount determined in respect of such principal
31
amount, shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby waived.
The Obligors acknowledge, and the parties hereto agree, that each holder of a
Note has the right to maintain its investment in the Notes free from repayment
by the Obligors (except as herein specifically provided for) and that the
provision for payment of a Make-Whole Amount by the Obligors in the event that
the Series A 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.
12.2. Other Remedies.
If any Default or Event of Default has occurred and is continuing,
and irrespective of whether any Notes have become or have been declared
immediately due and payable under Section 12.1, the holder of any Note at the
time outstanding may proceed to protect and enforce the rights of such holder by
an action at law, suit in equity or other appropriate proceeding, whether for
the specific performance of any agreement contained herein or in any Note, or
for an injunction against a violation of any of the terms hereof or thereof, or
in aid of the exercise of any power granted hereby or thereby or by law or
otherwise.
12.3. Rescission.
At any time after any Notes have been declared due and payable
pursuant to clause (b) or (c) of Section 12.1, the holders of at least 51% in
principal amount of the Notes then outstanding, by written notice to the
Obligors, may rescind and annul any such declaration and its consequences if (a)
the Obligors have paid all overdue interest on the Notes, all principal of and
any Make-Whole Amount and LIBOR Breakage Amount on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and any Make-Whole Amount and LIBOR Breakage
Amount and (to the extent permitted by applicable law) any overdue interest in
respect of the Notes, at the Default Rate, (b) all Events of Default and
Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 17, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment
under this Section 12.3 will extend to or affect any subsequent Event of Default
or Default or impair any right consequent thereon.
12.4. No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder of any
Note in exercising any right, power or remedy shall operate as a waiver thereof
or otherwise prejudice such holder's rights, powers or remedies. No right, power
or remedy conferred by this Agreement or by any Note or the Subsidiary Guaranty
upon any holder thereof shall be exclusive of any other right, power or remedy
referred to herein or therein or now or hereafter available at law, in equity,
by statute or otherwise. Without limiting the obligations of the Obligors under
Section 15, the Obligors will pay to the holder of each Note on demand such
further amount as shall be sufficient to cover all costs and expenses of such
holder incurred in any enforcement or collection under this Section 12,
including, without limitation, reasonable attorneys' fees, expenses and
disbursements.
32
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. Registration of Notes.
The Company shall keep at its principal executive office a register
for the registration and registration of transfers of Notes. The name and
address of each holder of one or more Notes, each transfer thereof and the name
and address of each transferee of one or more Notes shall be registered in such
register. Prior to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated as the owner
and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor, promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.
13.2. Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Obligors shall
execute and deliver within five Business Days, at the Obligors' expense (except
as provided below), one or more new Notes (as requested by the holder thereof)
of the same series in exchange therefor, in an aggregate principal amount equal
to the unpaid principal amount of the surrendered Note. Each such new Note shall
be payable to such Person as such holder may request and shall be substantially
in the form of Exhibit 1(a), (b), (c), (d) or (e) as appropriate. Each such new
Note shall be dated and bear interest from the date to which interest shall have
been paid on the surrendered Note or dated the date of the surrendered Note if
no interest shall have been paid thereon. The Company may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect
of any such transfer of Notes. Notes shall not be transferred in denominations
of less than $100,000, provided that if necessary to enable the registration of
transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than $100,000. Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be deemed to have
made the representation set forth in Section 6.2.
13.3. Replacement of Notes.
Upon receipt by the Company of evidence reasonably satisfactory to
it of the ownership of and the loss, theft, destruction or mutilation of any
Note (which evidence shall be, in the case of an Institutional Investor, notice
from such Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another Institutional
Investor holder of a Note with a minimum net
33
worth of at least $50,000,000, such Person's own unsecured agreement of
indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Obligors at their own expense shall execute and deliver within five Business
Days, in lieu thereof, a new Note of the same series, dated and bearing interest
from the date to which interest shall have been paid on such lost, stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid thereon.
14. PAYMENTS ON NOTES.
14.1. Place of Payment.
Subject to Section 14.2, payments of principal, Make-Whole Amount,
if any, Libor-Breakage Amount, if any, and interest becoming due and payable on
the Notes shall be made in Chicago, Illinois at the principal office of Bank
One, NA in such jurisdiction. The Obligors may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
14.2. Home Office Payment.
So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Obligors will pay all sums becoming due on such Note for
principal, Make-Whole Amount, if any, LIBOR Breakage Amount, if any, and
interest by the method and at the address specified for such purpose below your
name in Schedule A, or by such other method or at such other address as you
shall have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the making of any
notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, you shall surrender such Note for cancellation, reasonably promptly
after any such request, to the Company at its principal executive office or at
the place of payment most recently designated by the Company pursuant to Section
14.1. Prior to any sale or other disposition of any Note held by you or your
nominee you will, at your election, either endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid thereon
or surrender such Note to the Company in exchange for a new Note or Notes
pursuant to Section 13.2. The Obligors will afford the benefits of this Section
14.2 to any Institutional Investor that is the direct or indirect transferee of
any Note purchased by you under this Agreement and that has made the same
agreement relating to such Note as you have made in this Section 14.2.
34
15. EXPENSES, ETC.
15.1. Transaction Expenses.
Whether or not the transactions contemplated hereby are consummated,
the Obligors will pay all costs and expenses (including reasonable attorneys'
fees of a special counsel and, if reasonably required, local or other counsel)
incurred by you and each Other Purchaser or holder of a Note in connection with
such transactions and in connection with any amendments, waivers or consents
under or in respect of this Agreement or the Notes (whether or not such
amendment, waiver or consent becomes effective), including: (a) the costs and
expenses incurred in enforcing or defending (or determining whether or how to
enforce or defend) any rights under this Agreement or the Notes, or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement or the Notes, or by reason of
being a holder of any Note, (b) the costs and expenses, including financial
advisors' fees, incurred in connection with the insolvency or bankruptcy of any
Obligor or any other Subsidiary or in connection with any work-out or
restructuring of the transactions contemplated hereby and by the Notes, and (c)
the costs and expenses incurred in connection with the initial filing of this
Agreement and all related documents and financial information, and all
subsequent annual and interim filings of documents and financial information
related to this Agreement, with the Securities Valuation Office of the National
Association of Insurance Commissioners or any successor organization succeeding
to the authority thereof. The Obligors will pay, and will save you and each
other holder of a Note harmless from, all claims in respect of any fees, costs
or expenses if any, of brokers and finders (other than those retained by you).
15.2. Survival.
The obligations of the Obligors under this Section 15 will survive
the payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive
the execution and delivery of this Agreement and the Notes, the purchase or
transfer by you of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of you or any
other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of any Obligor pursuant to this Agreement
shall be deemed representations and warranties of such Obligor under this
Agreement. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between you and the Obligors and
supersede all prior agreements and understandings relating to the subject matter
hereof.
35
17. AMENDMENT AND WAIVER.
17.1. Requirements.
This Agreement, the Notes and the Subsidiary Guaranty may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Obligors and the Required Holders, except that (a) no amendment
or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or
any defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount or LIBOR Breakage Amount on, the Notes,
(ii) change the percentage of the principal amount of the Notes the holders of
which are required to consent to any such amendment or waiver, or (iii) amend
any of Sections 8, 11(a), 11(b), 12, 17 or 20.
17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is
required, to enable such holder to make an informed and considered
decision with respect to any proposed amendment, waiver or consent in
respect of any of the provisions hereof or of the Notes. The Company will
deliver executed or true and correct copies of each amendment, waiver or
consent effected pursuant to the provisions of this Section 17 to each
holder of outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the
requisite holders of Notes.
(b) Payment. The Obligors will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any
holder of Notes as consideration for or as an inducement to the entering
into by any holder of Notes or any waiver or amendment of any of the
terms and provisions hereof unless such remuneration is concurrently
paid, or security is concurrently granted, on the same terms, ratably to
each holder of Notes then outstanding even if such holder did not consent
to such waiver or amendment.
17.3. Binding Effect, etc.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Obligors without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Obligors and the holder of any Note
nor any delay in exercising any rights hereunder or under any Note shall operate
as a
36
waiver of any rights of any holder of such Note. As used herein, the term "this
Agreement" or "the Agreement" and references thereto shall mean this Agreement
as it may from time to time be amended or supplemented.
17.4. Notes held by Obligors, etc.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by any Obligor or any of its
Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by facsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the
Company in writing, or
(iii) if to the Company or to the Obligors, to the Company at
its address set forth at the beginning hereof to the attention of
the Chief Financial Officer, or at such other address as the Company
shall have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may hereafter
be executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Obligors agree and stipulate that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
37
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Obligors or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information"
means information delivered to you by or on behalf of any Obligor or any other
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by you as
being confidential information of such Obligor or such Subsidiary, provided that
such term does not include information that (a) was publicly known or otherwise
known to you prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by you or any person acting on your
behalf, (c) otherwise becomes known to you other than through disclosure by any
Obligor or any other Subsidiary or (d) constitutes financial statements
delivered to you under Section 7.1 that are otherwise publicly available. You
will maintain the confidentiality of such Confidential Information in accordance
with procedures adopted by you in good faith to protect confidential information
of third parties delivered to you, provided that you may deliver or disclose
Confidential Information to (i) your directors, trustees, officers, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by your Notes), (ii)
your financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 20), (v) any Person from which you offer to purchase any security
of any Obligor (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to you, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which you are a party or (z) if an Event of Default has occurred
and is continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to have agreed to
be bound by and to be entitled to the benefits of this Section 20 as though it
were a party to this Agreement. On reasonable request by the Obligors in
connection with the delivery to any holder of a Note of information required to
be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Obligors embodying the provisions
of this Section 20.
38
Notwithstanding anything to the contrary set forth herein or in any
other written or oral understanding or agreement to which the parties hereto are
parties or by which they are bound, the parties acknowledge and agree that (i)
any obligations of confidentiality contained herein and therein do not apply and
have not applied from the commencement of discussions between the parties to the
tax treatment and tax structure of the Notes (and any related transactions or
arrangements), and (ii) each party (and each of its employees, representatives,
or other agents) may disclose to any and all persons, without limitation of any
kind, the tax treatment and tax structure of the Notes and all materials of any
kind (including opinions or other tax analyses) that are provided to such party
relating to such tax treatment and tax structure, all within the meaning of
Treasury Regulations Section 1.6011-4.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Obligors, which notice shall be signed by both you and
such Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
22. RELEASE OF OBLIGOR OR SUBSIDIARY GUARANTOR.
You and each subsequent holder of a Note agree to release in writing
any Obligor, other than the Company, from its obligations under this Agreement
and the Notes, or any Subsidiary Guarantor from the Subsidiary Guaranty, (i) if
such Obligor or Subsidiary Guarantor ceases to be a Subsidiary as a result of an
Asset Disposition permitted by Section 10.8 or (ii) at such time as the banks
party to the Credit Agreement release such Subsidiary Guarantor from any
Guaranties thereunder; provided, however, that you and each subsequent holder
will not be required to release a Subsidiary Guarantor from the Subsidiary
Guaranty upon such Subsidiary's release by the banks party to the Credit
Agreement if (A) a Default or Event of Default has occurred and is continuing,
(B) such Subsidiary Guarantor is to become a borrower under the Credit Agreement
or (C) such release is part of a plan of financing that contemplates such
Subsidiary Guarantor guaranteeing any other Debt of any Obligor. Your obligation
to release an Obligor, other than the Company, from its obligations under this
Agreement and the Notes or a Subsidiary Guarantor from the Subsidiary Guaranty
is conditioned upon your prior receipt of a certificate from a Senior Financial
Officer of the Company stating that none of the circumstances described in
clauses (A), (B) and (C) above are true. Upon receipt of such certificate, you
agree to provide your written release to the Company and such Obligor or
Subsidiary Guarantor.
39
23. MISCELLANEOUS.
23.1. Successors and Assigns.
All covenants and other agreements contained in this Agreement by or
on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.
23.2. Payments Due on Non-Business Days.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-Whole Amount or LIBOR
Breakage 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.
23.3. Severability.
Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
23.4. Construction.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
23.5. Counterparts.
This Agreement may be executed in any number of counterparts, each
of which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
23.6. Governing Law; Submission to Jurisdiction.
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 choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
40
Each Obligor irrevocably submits to the jurisdiction of the courts
of the State of Illinois and of the courts of the United States of America
having jurisdiction in the State of Illinois for the purpose of any legal action
or proceeding in any such court with respect to, or arising out of, this
Agreement or the Notes. Each Obligor consents to process being served in any
suit, action or proceeding by mailing a copy thereof by registered or certified
mail, postage prepaid, return receipt requested, to the address of such Obligor
specified in or designated pursuant to this Agreement. Each Obligor agrees that
such service upon receipt (i) shall be deemed in every respect effective service
of process upon it in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to such Obligor.
41
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Obligors.
Very truly yours,
PATTERSON DENTAL COMPANY
By: /s/ R. Stephen Armstrong
------------------------------------
Name: R. Stephen Armstrong
Title: Executive Vice President & Chief
Financial Officer
ABILITYONE PRODUCTS CORP.
ABILITYONE CORPORATION
PATTERSON DENTAL SUPPLY, INC.
WEBSTER VETERINARY SUPPLY, INC.
By: /s/ R. Stephen Armstrong
------------------------------------
Name: R. Stephen Armstrong
Title: Vice President and Treasurer
WEBSTER MANAGEMENT, LP
By: WEBSTER VETERINARY SUPPLY, INC., its
General Partner
By: /s/ R. Stephen Armstrong
--------------------------------
Name: R. Stephen Armstrong
Title: Vice President and Treasurer
S-1
The foregoing is agreed
to as of the date thereof.
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Timothy L. Powell
------------------------------------
Name: Timothy L. Powell
----------------------------------
Title: Director
---------------------------------
S-2
GENERAL ELECTRIC CAPITAL ASSURANCE
COMPANY
By: /s/ Morian C. Mooers
------------------------------------
Name: Morian C. Mooers
----------------------------------
Title: Vice President - Private
Investments
---------------------------------
S-3
HARTFORD LIFE AND ACCIDENT INSURANCE
COMPANY
BY
HARTFORD INVESMENT SERVICES, INC.
its agent and attorney in fact
By: /s/ Ronald Mendel
------------------------------------
Name: Ronald Mendel
----------------------------------
Title: Senior Vice President
---------------------------------
S-4
HARTFORD LIFE INSURANCE COMPANY
By
HARTFORD INVESTMENT SERVICES, INC.
its agent and attorney in fact
By: /s/ Ronald Mendel
------------------------------------
Name: Ronald Mendel
----------------------------------
Title: Senior Vice President
---------------------------------
S-5
BY: PPM AMERICA, INC., AS ATTORNEY IN
FACT, ON BEHALF OF JACKSON NATIONAL LIFE
INSURANCE COMPANY
By: /s/ Chris Raub
------------------------------------
Name: Chris Raub
----------------------------------
Title: Senior Managing Director
---------------------------------
S-6
BY: PPM AMERICA, INC., AS ATTORNEY IN
FACT, ON BEHALF OF JACKSON NATIONAL LIFE
INSURANCE COMPANY OF NEW YORK
By: /s/ Chris Raub
------------------------------------
Name: Chris Raub
----------------------------------
Title: Senior Managing Director
---------------------------------
S-7
AMERITAS LIFE INSURANCE CORP.
BY AMERITAS INVESTMENT ADVISORS INC.,
AS AGENT
By: /s/ Andrew S. White
------------------------------------
Name: Andrew S. White
----------------------------------
Title: Vice President - Fixed Income
Securities
---------------------------------
S-8
PRINCIPAL LIFE INSURANCE COMPANY
By: Principal Global Investors, LLC
a Delaware limited liability
company, its authorized signatory
By: /s/ Christopher J. Henderson
------------------------------------
Its: Counsel
------------------------------------
By: /s/ Elizabeth D. Swanson
------------------------------------
Its: Counsel
------------------------------------
S-9
CALHOUN & CO., AS NOMINEE FOR COMERICA
BANK & TRUST, NATIONAL ASSOCIATION,
TRUSTEE TO THE TRUST CREATED BY TRUST
AGREEMENT DATED OCTOBER 1, 2002
By: /s/ Tim Madigan
------------------------------------
Title: First Level Officer
---------------------------------
(Scottish - Lincoln)
S-10
CALHOUN & CO., AS NOMINEE FOR COMERICA
BANK & TRUST, NATIONAL ASSOCIATION,
TRUSTEE TO THE TRUST CREATED BY TRUST
AGREEMENT DATED OCTOBER 1, 2002
By: /s/ Tim Madigan
------------------------------------
Title: First Level Officer
---------------------------------
(Scottish - 5YR)
S-11
CALHOUN & CO., AS NOMINEE FOR COMERICA
BANK & TRUST, NATIONAL ASSOCIATION,
TRUSTEE TO THE TRUST CREATED BY TRUST
AGREEMENT DATED OCTOBER 1, 2002
By: /s/ Tim Madigan
------------------------------------
Title: First Level Officer
---------------------------------
(Scottish - 1YR)
S-12
SCOTTISH ANNUITY & LIFE INSURANCE
COMPANY (CAYMAN) LTD
BY: PRINCIPAL GLOBAL INVESTORS, LLC
A DELAWARE LIMITED LIABILITY
COMPANY, ITS AUTHORIZED SIGNATORY
By: /s/ Christopher J. Henderson
------------------------------------
Its: Counsel
------------------------------------
By: /s/ Elizabeth D. Swanson
------------------------------------
Its: Counsel
------------------------------------
S-13
RELIASTAR LIFE INSURANCE COMPANY
BY: ING INVESTMENT MANAGEMENT LLC,
AS AGENT
By: /s/ James V. Wittich
------------------------------------
Name: James V. Wittich
----------------------------------
Title: Senior Vice President
---------------------------------
S-14
ING LIFE INSURANCE AND ANNUITY COMPANY
BY: ING INVESTMENT MANAGEMENT LLC,
AS AGENT
By: /s/ James V. Wittich
------------------------------------
Name: James V. Wittich
----------------------------------
Title: Senior Vice President
---------------------------------
S-15
GOLDEN AMERICAN LIFE INSURANCE COMPANY
BY: ING INVESTMENT MANAGEMENT LLC,
AS AGENT
By: /s/ James V. Wittich
------------------------------------
Name: James V. Wittich
----------------------------------
Title: Senior Vice President
---------------------------------
S-16
PACIFIC LIFE INSURANCE COMPANY
(Nominee: Mac & Co.)
By: /s/ Diane W. Dales
------------------------------------
Name: Diane W. Dales
----------------------------------
Title: Assistant Vice President
---------------------------------
By: /s/ Peter S. Fiek
------------------------------------
Name: Peter S. Fiek
----------------------------------
Title: Assistant Secretary
---------------------------------
S-17
MASSMUTUAL ASIA LIMITED
By: David L. Babson & Company Inc.
as Investment Adviser
By: /s/ Emeka O. Onukwugha
------------------------------------
Name: Emeka O. Onukwugha
----------------------------------
Title: Managing Director
---------------------------------
C.M. LIFE INSURANCE COMPANY
c/o MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: David L. Babson & Company Inc.
as Investment Sub-Adviser
By: /s/ Emeka O. Onukwugha
------------------------------------
Name: Emeka O. Onukwugha
----------------------------------
Title: Managing Director
---------------------------------
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: David L. Babson & Company Inc.
as Investment Adviser
By: /s/ Emeka O. Onukwugha
------------------------------------
Name: Emeka O. Onukwugha
----------------------------------
Title: Managing Director
---------------------------------
S-18
GREAT-WEST LIFE & ANNUITY INSURANCE
COMPANY
By: /s/ Eve Hampton
------------------------------------
Name: Eve Hampton
----------------------------------
Title: Vice President
---------------------------------
By: /s/ B. G. Masters
------------------------------------
Name: B. G. Masters
----------------------------------
Title: Assistant Vice President
---------------------------------
S-19
LONDON LIFE AND CASUALTY REINSURANCE
CORPORATION
By: Orchard Capital Management, LLC, as
Investment Advisor
By: /s/ Eve Hampton
------------------------------------
Name: Eve Hampton
----------------------------------
Title: Vice President
---------------------------------
By: /s/ J. G. Lowery
------------------------------------
Name: J. G. Lowery
----------------------------------
Title: Assistant Vice President
---------------------------------
S-20
ALLIED IRISH BANKS, P.L.C.
(In Name of Hare & Co)
By: /s/ Grace Gilligan /s/ Conor Mallen
------------------------------------
Name: Grace Gilligan Conor Mallen
----------------------------------
Title: Senior Vice President
---------------------------------
S-21
THE TRAVELERS INSURANCE COMPANY
By: /s/ Allen Cantrell
------------------------------------
Name: Allen Cantrell
----------------------------------
Title: Investment Officer
---------------------------------
S-22
CITICORP INSURANCE AND INVESTMENT TRUST
By: /s/ Allen Cantrell
------------------------------------
Name: Allen Cantrell
----------------------------------
Title: Investment Officer
---------------------------------
S-23
THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Mark E. Kishler
------------------------------------
Name: Mark E. Kishler
----------------------------------
Title: Its Authorized Representative
---------------------------------
S-24
PHOENIX LIFE INSURANCE COMPANY
By: /s/ Christopher M. Wilkos
------------------------------------
Name: Christopher M. Wilkos
----------------------------------
Title: Senior Vice President
---------------------------------
S-25
PHL VARIABLE INSURANCE COMPANY
By: /s/ Christopher M. Wilkos
------------------------------------
Name: Christopher M. Wilkos
----------------------------------
Title: Senior Vice President
---------------------------------
S-26
UNITED OF OMAHA LIFE INSURANCE COMPANY
By: /s/ Edwin H. Garrison, Jr.
------------------------------------
Name: Edwin H. Garrison, Jr.
----------------------------------
Title: First Vice President
---------------------------------
S-27
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Kent R. Adams
------------------------------------
Name: Kent R. Adams
----------------------------------
Title: V.P. Fixed Income Securities
---------------------------------
S-28
PIONEER MUTUAL LIFE INSURANCE COMPANY
By: /s/ Kent R. Adams
------------------------------------
Name: Kent R. Adams
----------------------------------
Title: V.P. Fixed Income Securities
---------------------------------
S-29
THE STATE LIFE INSURANCE COMPANY
By: /s/ Kent R. Adams
------------------------------------
Name: Kent R. Adams
----------------------------------
Title: V.P. Fixed Income Securities
---------------------------------
S-30
SCHEDULE B
----------
DEFINED TERMS
-------------
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Adjusted LIBOR Rate" is defined in Section 1.2(a).
"Affiliate" means, at any time, and with respect to any Person, (a)
any other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company. Notwithstanding anything in the
foregoing to the contrary, a Person that (i) would be an Affiliate of the
Company solely by virtue of its ownership of voting or equity interests of the
Company and (ii) is eligible pursuant to Rule 13d-1(b) under the Exchange Act to
file a statement with the Securities and Exchange Commission on Schedule 13G,
shall not be deemed to be an Affiliate.
"Anti-Terrorism Order" means Executive Order 13224 of September 23,
2001 Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)).
"Asset Disposition" means any Transfer except:
(a) any
(i) Transfer from a Subsidiary to the Company or a Wholly Owned
Subsidiary;
(ii) Transfer from the Company to a Wholly Owned Subsidiary; and
(iii) Transfer from the Company to a Subsidiary (other than a
Wholly Owned Subsidiary) or from a Subsidiary to another Subsidiary
(other than a Wholly Owned Subsidiary), which in either case is for
fair market value,
so long as immediately before and immediately after the consummation of any
such Transfer and after giving effect thereto, no Default or Event of
Default exists;
Schedule B
(b) any Transfer made in the ordinary course of business; or
(c) any Transfer by the Company or a Subsidiary pursuant to a
Contract Purchase Facility or as part of a Permitted Receivables
Securitization Transaction.
"Business Day" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Chicago, Illinois, St. Paul, Minnesota or New
York City are required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time.
"Company" means Patterson Dental Company, a Minnesota corporation.
"Confidential Information" is defined in Section 20.
"Consolidated Debt" means, as of any date, the outstanding Debt of the
Company and its Subsidiaries on such date, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Income Available for Interest Charges" means, for any
period, Consolidated Net Income for such period, plus, to the extent deducted in
determining Consolidated Net Income, (i) provisions for income taxes and (ii)
Consolidated Interest Charges.
"Consolidated Interest Charges" means, for any period, the
consolidated interest expense of the Company and its Subsidiaries for such
period (including capitalized interest and the interest component of Capital
Leases) determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income or
loss of the Company and its Subsidiaries for such period (including, without
duplication, income attributed to minority interests) determined on a
consolidated basis in accordance with GAAP, provided that there shall be
excluded therefrom (i) extraordinary gains or losses and (ii) any equity
interest of the Company or any Subsidiary in the unremitted earnings of a Person
that is not a Subsidiary.
2
Schedule B
"Consolidated Net Worth" means, as of any date, consolidated
stockholders' equity of the Company and its Subsidiaries on such date,
determined in accordance with GAAP.
"Consolidated Operating Cash Flow" means, for any period, Consolidated
Net Income for such period, plus, to the extent deducted in determining
Consolidated Net Income, (i) all provisions for federal, state and other income
taxes, (ii) interest expense, and (iii) depreciation and amortization expense.
If, during the period for which Consolidated Operating Cash Flow is being
calculated, the Company or a Subsidiary has acquired or disposed of one or more
Persons (or the assets thereof), Consolidated Operating Cash Flow shall be
calculated on a pro forma basis as if all of such acquisitions and dispositions
had occurred on the first day of such period.
"Consolidated Total Assets" means, as of any date, the total assets of
the Company and its Subsidiaries as of such date, determined on a consolidated
basis in accordance with GAAP.
"Contract Purchase Facility" means (a) the Receivables Sale Agreement
dated as of May 10, 2002, among the originators named therein and PDC Funding
Company, LLC, as buyer and the Receivables Purchase Agreement dated as of May
10, 2002, among PDC Funding Company, LLC, the Company, Preferred Receivables
Funding Corporation, the financial institutions party thereto and Bank One, as
agent, as such agreements may be amended, restated, extended or otherwise
modified from time to time, (b) the Third Amended and Restated Contract Purchase
Agreement, dated as of June 19, 2002, among the Company, Patterson Dental
Supply, Inc., Webster Veterinary Supply, Inc., U.S. Bank National Association,
individually and as agent, and certain buyers identified therein, as such Third
Amended and Restated Contract Purchase Agreement may be amended, restated,
extended or otherwise modified from time to time, (c) any comparable additional
or replacement facility made available to the Company or any Subsidiary,
provided that any of such facilities: (i) provides for the sale by the Company
or such Subsidiary of rights to payment arising under Customer Installment
Contracts; (ii) provides for a purchase price in an amount that represents the
reasonably equivalent value of the assets subject thereto (determined as of the
date of such sale); (iii) evidences the intent of the parties that for
accounting and all other purposes, such sale is to be treated as a sale by the
Company or a Subsidiary, as the case may be, and a purchase by such
institution(s) or special purpose entity (and not as a lending transaction);
(iv) provides for the delivery of opinions of outside counsel to the effect
that, under, applicable bankruptcy, insolvency and similar laws (subject to
assumptions and qualifications customary for opinions of such type), such
transaction will be treated as a true sale and not as a lending transaction and
that the assets of any purchasing special purpose entity will not be
consolidated with the assets of the selling entity, the Company or any Affiliate
of the Company; (v) provides for the parties to such transaction to, and such
parties do, treat such transaction as a sale for all other accounting purposes;
and (vi) provides that such sale is without recourse to the Company or such
Subsidiary, except to the extent of normal and customary conditions and rights
of limited recourse that are consistent with the opinions referred to in clause
(iv) and with the treatment of such sale as a true sale for accounting purposes.
3
Schedule B
"Credit Agreement" means the Credit Agreement dated as of November 25,
2003 among the Company and the other Obligors, the lenders from time to time
party thereto, Bank One, NA (Main Office Chicago), as administrative agent, and
Bank of America, N.A., as syndication agent, as such agreement may be amended,
restated, supplemented, refinanced, increased or reduced from time to time, and
any successor credit agreement or similar facility.
"Customer Installment Contract" means a contract between the Company
or any Subsidiary and a customer providing for the installment sale, licensing
or secured financing of equipment, furnishings or computer software.
"Debt" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption obligations
in respect of mandatorily redeemable preferred stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable and other accrued
liabilities arising in the ordinary course of business but including all
liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);
(e) all of 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;
(g) any recourse liability of such Person under or in connection with
a Contract Purchase Facility or Permitted Receivables Securitization
Transaction; and
(h) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (g) hereof.
"Debt Prepayment Application" means, with respect to any Transfer of
property, the application by the Company or a Subsidiary of cash in an amount
equal to the Net Proceeds Amount with respect to such Transfer to pay Senior
Debt other than (i) Senior Debt owing to the Company, any Subsidiary or any of
their respective Affiliates and (ii) Senior Debt in respect of any revolving
credit or similar credit facility providing the Company or any Subsidiary with
the right to obtain loans or other extensions of credit from time to time
(except
4
Schedule B
to the extent that in connection with such payment of Senior 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
extensions of credit from time to time); provided that, in the course of making
such application, the Company shall offer to prepay each outstanding Note at
par, in accordance with Section 8.2(c), in a principal amount that equals the
Ratable Portion of the holder of such Note in respect of such Transfer. If any
holder of a Note fails to accept such offer of prepayment, then, for purposes of
the preceding sentence only, the Company nevertheless will be deemed to have
paid Senior Debt in an amount equal to the Ratable Portion of the holder of such
Note in respect of such Transfer.
"Debt Prepayment Transfer" is defined in Section 8.2(c)(i).
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" means that rate of interest that is the greater of (i)
2% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 2% over the rate of interest publicly announced
by Bank One, NA in Chicago, Illinois as its "base" or "prime" rate.
"Disposition Value" means, at any time, with respect to any property:
(a) in the case of property that does not constitute Subsidiary
Stock, the book value thereof, valued at the time of such disposition in
good faith by the Company; and
(b) in the case of property that constitutes Subsidiary Stock, an
amount equal to that percentage of book value of the assets of the
Subsidiary that issued such stock as is equal to the percentage that the
book value of such Subsidiary Stock represents of the book value of all of
the outstanding capital stock of such Subsidiary (assuming, in making such
calculations, that all securities convertible into such capital stock are
so converted and giving full effect to all transactions that would occur or
be required in connection with such conversion) determined at the time of
the disposition thereof, in good faith by the Obligors.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
5
Schedule B
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof.
6
Schedule B
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polycholorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
Section 13.1.
"INHAM Exemption" is defined in Section 6.2(e).
"Institutional Investor" means (a) any original purchaser of a Note,
(b) any holder of more than $2,000,000 in aggregate principal amount of the
Notes at the time outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Interest Payment Date" means, with respect to any Series B Note, the
dates specified in Exhibit 1(c).
"Interest Period" is defined in Section 1.2(c).
"LIBOR" is defined in Section 1.2(a).
"LIBOR Breakage Amount" is defined in Section 8.7.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.6.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Subsidiaries taken as a whole.
7
Schedule B
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of any Obligor
to perform its obligations under this Agreement and the Notes, or (c) the
ability of any Subsidiary Guarantor to perform its obligation under the
Subsidiary Guaranty, or (d) the validity or enforceability of this Agreement,
the Notes or the Subsidiary Guaranty.
"Memorandum" is defined in Section 5.3.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"NAIC Annual Statement" is defined in Section 6.2(a).
"Net Proceeds Amount" means, with respect to any Transfer of any
property by any Person, an amount equal to:
(a) the aggregate amount of the consideration (valued at the fair
market value of such consideration at the time of the consummation of such
Transfer) received by such Person in respect of such Transfer, minus
(b) all ordinary and reasonable out-of-pocket costs and expenses
actually incurred by such Person in connection with such Transfer.
"Non-Obligor Subsidiary" is defined in Section 10.7(b).
"Notes" is defined in Section 1.
"Obligors" means the Company and its Wholly Owned Subsidiaries,
AbilityOne Products Corp., a Delaware corporation, AbilityOne Corporation, a
Michigan Corporation, Patterson Dental Supply, Inc., a Minnesota Corporation,
Webster Veterinary Supply, Inc., a Minnesota Corporation, and Webster
Management, LP, a Minnesota Limited Partnership, and any other Subsidiary that
assumes the obligations of an Obligor pursuant to Section 10.7(b).
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Permitted Receivables Securitization Transaction" means a transaction
or series of transactions in which the Company or any Subsidiary sells
receivables, other than those
8
Schedule B
derived from Customer Installment Contracts, directly or indirectly to a special
purpose entity, satisfying the following criteria: (i) such sale is pursuant to
an agreement or agreements evidencing the intent of the parties that for
accounting and all other purposes, such sale is to be treated as a sale by the
Company or a Subsidiary, as the case may be, and a purchase by such special
purpose entity (and not as a lending transaction); (ii) the agreement(s)
referred to in clause (i) provide for the delivery of opinions of outside
counsel to the effect that, under, applicable bankruptcy, insolvency and similar
laws (subject to assumptions and qualifications customary for opinions of such
type), such transaction will be treated as a true sale and not as a lending
transaction and that the assets of any purchasing special purpose entity will
not be consolidated with the assets of the selling entity, the Company or any
Affiliate of the Company; (iii) the parties to such transaction shall treat such
transaction as a sale for all other accounting purposes; (iv) the purchase price
shall be an amount that represents the reasonably equivalent value of the
receivables or other assets subject thereto (determined as of the date of such
sale); (v) such sale shall be without recourse to the Company or such
Subsidiary, except to the extent of normal and customary conditions that are
consistent with the opinion referred to in clause (ii); and (vi) the aggregate
principal amount outstanding in connection with all such transactions does not
exceed $100,000,000 at any time.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"Prepayment Offer" is defined in Section 8.2(c)(i).
"Prepayment Premium" is defined in Section 8.2(b).
"Priority Debt" means, as of any date, the sum (without duplication)
of (a) outstanding unsecured Debt of Subsidiaries not otherwise permitted by
Sections 10.6(a) through (e) and (b) Debt of the Company and its Subsidiaries
secured by Liens not otherwise permitted by Sections 10.5(a) through (i).
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"Property Reinvestment Application" means, with respect to any
Transfer of property, the application of an amount equal to the Net Proceeds
Amount with respect to such Transfer to the acquisition by the Company or any
Subsidiary of operating assets of the Company or such Subsidiary to be used in
the principal business of such Person as conducted immediately prior to such
Transfer.
9
Schedule B
"Purchaser" means each purchaser listed in Schedule A.
"QPAM Exemption" is defined in Section 6.2(d).
"Ratable Portion" means, in respect of any holder of any Note and any
Transfer contemplated by the definition of Debt Prepayment Application, an
amount equal to the product of (x) the Net Proceeds Amount being applied to the
payment of Senior Debt in connection with such Transfer multiplied by (y) a
fraction the numerator of which is the outstanding principal amount of such Note
at the time of such Transfer and the denominator of which is the aggregate
principal amount of Senior Debt of the Company and its Subsidiaries at the time
of such Transfer determined on a consolidated basis in accordance with GAAP, but
including as Senior Debt in respect of any revolving credit or similar credit
facility providing the Company or any Subsidiary with the right to obtain loans
or other extensions of credit from time to time only the amount by which such
credit facility will be permanently reduced by such Debt Prepayment Application.
"Required Holders" means, at any time, the holders of at least 51% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by any Obligor or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Reuters Screen LIBO Page" is defined in Section 1.2(a).
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Senior Debt" means (a) any Debt of any Obligor, other than any Debt
that is in any manner subordinated in right of payment or security in any
respect to the Notes, and (b) any Debt of any Subsidiary.
"Senior Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
"Series A Notes" is defined in Section 1.1.
"Series A-1 Notes" is defined in Section 1.1.
"Series A-2 Notes" is defined in Section 1.1.
"Series A-3 Notes" is defined in Section 1.1.
"Series B Notes" is defined in Section 1.1.
10
Schedule B
"Series B-1 Notes" is defined in Section 1.1.
"Series B-2 Notes" is defined in Section 1.1.
"Source" is defined in Section 6.2.
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership, limited liability
company or joint venture if more than a 50% interest in the profits or capital
thereof is owned by such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries (unless such partnership, limited
liability company or joint venture can and does ordinarily take major business
actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"Subsidiary Guarantor" means any Subsidiary of the Company that
executes and delivers, or becomes a party to, the Subsidiary Guaranty.
"Subsidiary Guaranty" is defined in Section 9.7.
"Subsidiary Stock" means, with respect to any Person, the capital
stock (or any options or warrants to purchase stock, shares or other securities
exchangeable for or convertible into stock or shares) of any Subsidiary of such
Person.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"this Agreement" or "the Agreement" is defined in Section 17.3.
"Transfer" means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its property,
including Subsidiary Stock. For purposes of determining the application of the
Net Proceeds Amount in respect of any Transfer, the Company may designate any
Transfer as one or more separate Transfers each
11
Schedule B
yielding a separate Net Proceeds Amount. In any such case, (a) the Disposition
Value of any property subject to each such separate Transfer and (b) the amount
of Consolidated Total Assets attributable to any property subject to each such
separate Transfer shall be determined by ratably allocating the aggregate
Disposition Value of, and the aggregate Consolidated Total Assets attributable
to, all property subject to all such separate Transfers to each such separate
Transfer on a proportionate basis.
"Transfer Prepayment Date" is defined in Section 8.2(c)(i).
"USA Patriot Act" means Public Law 107-56 of the United States of
America, United and Strengthening America by Providing Tools Required to
Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001.
"Wholly Owned Subsidiary" means, at any time, any Subsidiary 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 Subsidiaries at such time.
12
Schedule B
EXHIBIT 1(a)
------------
[FORM OF SERIES A-1 SENIOR NOTE]
PATTERSON DENTAL COMPANY
ABILITYONE PRODUCTS CORP.
ABILITYONE CORPORATION
PATTERSON DENTAL SUPPLY, INC.
WEBSTER VETERINARY SUPPLY, INC.
WEBSTER MANAGEMENT, LP
3.14% SENIOR NOTE, SERIES A-1
DUE NOVEMBER 25, 2006
No. A-1R-[_____] [Date]
$[_______] PPN: 70341 @ AA 7
FOR VALUE RECEIVED, the undersigned, PATTERSON DENTAL COMPANY, a
Minnesota corporation (the "Company"), ABILITYONE PRODUCTS CORP., a Delaware
corporation ("AbilityOne"), ABILITYONE CORPORATION, a Michigan corporation
("AbilityOne Corporation"), PATTERSON DENTAL SUPPLY, INC., a Minnesota
corporation ("PDSI"), WEBSTER VETERINARY SUPPLY, INC., a Minnesota corporation
("Webster"), and WEBSTER MANAGEMENT, LP, a Minnesota limited partnership
("Webster Management" and, collectively with the Company, AbilityOne, AbilityOne
Corporation, PDSI and Webster, the "Obligors"), jointly and severally, promise
to pay to [ ], or registered assigns, the principal sum of $[ ] on
November 25, 2006, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at the rate of 3.14% per
annum from the date hereof, payable semiannually, on May 25 and November 25, in
each year, commencing with the May 25 or November 25 next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 5.14% or (ii) 2% over the rate of interest publicly
announced by Bank One, NA, or its successor, from time to time in Chicago,
Illinois as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank One, NA in Chicago, Illinois or at such
other place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreement referred to below.
Exhibit 1(a)
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase Agreement dated as of November 15,
2003 (as from time to time amended, the "Note Purchase Agreement"), between the
Obligors and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representations set forth in Section 6.2 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Obligors may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Obligors will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
2
Exhibit 1(a)
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
PATTERSON DENTAL COMPANY
By:
------------------------------------
Name: R. Stephen Armstrong
Title: Executive Vice President & Chief
Financial Officer
ABILITYONE PRODUCTS CORP.
ABILITYONE CORPORATION
PATTERSON DENTAL SUPPLY, INC.
WEBSTER VETERINARY SUPPLY, INC.
By:
------------------------------------
Name: R. Stephen Armstrong
Title: Vice President and Treasurer
WEBSTER MANAGEMENT, LP
By: WEBSTER VETERINARY SUPPLY, INC., its
General Partner
By:
--------------------------------
Name: R. Stephen Armstrong
Title: Vice President and Treasurer
3
Exhibit 1(a)
EXHIBIT 1(b)
------------
[FORM OF SERIES A-2 SENIOR NOTE]
PATTERSON DENTAL COMPANY
ABILITYONE PRODUCTS CORP.
ABILITYONE CORPORATION
PATTERSON DENTAL SUPPLY, INC.
WEBSTER VETERINARY SUPPLY, INC.
WEBSTER MANAGEMENT, LP
3.65% SENIOR NOTE, SERIES A-2
DUE NOVEMBER 25, 2007
No. A-2R-[_____] [Date]
$[_______] PPN: 70341 @ AB 5
FOR VALUE RECEIVED, the undersigned, PATTERSON DENTAL COMPANY, a
Minnesota corporation (the "Company"), ABILITYONE PRODUCTS CORP., a Delaware
corporation ("AbilityOne"), ABILITYONE CORPORATION, a Michigan corporation
("AbilityOne Corporation"), PATTERSON DENTAL SUPPLY, INC., a Minnesota
corporation ("PDSI"), WEBSTER VETERINARY SUPPLY, INC., a Minnesota corporation
("Webster"), and WEBSTER MANAGEMENT, LP, a Minnesota limited partnership
("Webster Management" and, collectively with the Company, AbilityOne, AbilityOne
Corporation, PDSI and Webster, the "Obligors"), jointly and severally, promise
to pay to [____], or registered assigns, the principal sum of $[____] on
November 25, 2007, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at the rate of 3.65% per
annum from the date hereof, payable semiannually, on May 25 and November 25, in
each year, commencing with the May 25 or November 25 next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 5.65% or (ii) 2% over the rate of interest publicly
announced by Bank One, NA, or its successor, from time to time in Chicago,
Illinois as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank One, NA in Chicago, Illinois or at such
other place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreement referred to below.
Exhibit 1(b)
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase Agreement dated as of November 15,
2003 (as from time to time amended, the "Note Purchase Agreement"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representations set forth in Section 6.2 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
2
Exhibit 1(b)
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
PATTERSON DENTAL COMPANY
By:
------------------------------------
Name: R. Stephen Armstrong
Title: Executive Vice President & Chief
Financial Officer
ABILITYONE PRODUCTS CORP.
ABILITYONE CORPORATION
PATTERSON DENTAL SUPPLY, INC.
WEBSTER VETERINARY SUPPLY, INC.
By:
------------------------------------
Name: R. Stephen Armstrong
Title: Vice President and Treasurer
WEBSTER MANAGEMENT, LP
By: WEBSTER VETERINARY SUPPLY, INC., its
General Partner
By:
--------------------------------
Name: R. Stephen Armstrong
Title: Vice President and Treasurer
3
Exhibit 1(b)
EXHIBIT 1(c)
------------
[FORM OF SERIES A-3 SENIOR NOTE]
PATTERSON DENTAL COMPANY
ABILITYONE PRODUCTS CORP.
ABILITYONE CORPORATION
PATTERSON DENTAL SUPPLY, INC.
WEBSTER VETERINARY SUPPLY, INC.
WEBSTER MANAGEMENT, LP
4.14% SENIOR NOTE, SERIES A-3
DUE NOVEMBER 25, 2008
No. A-3R-[_____] [Date]
$[_______] PPN: 70341 @ AC 3
FOR VALUE RECEIVED, the undersigned, PATTERSON DENTAL COMPANY, a
Minnesota corporation (the "Company"), ABILITYONE PRODUCTS CORP., a Delaware
corporation ("AbilityOne"), ABILITYONE CORPORATION, a Michigan corporation
("AbilityOne Corporation"), PATTERSON DENTAL SUPPLY, INC., a Minnesota
corporation ("PDSI"), WEBSTER VETERINARY SUPPLY, INC., a Minnesota corporation
("Webster"), and WEBSTER MANAGEMENT, LP, a Minnesota limited partnership
("Webster Management" and, collectively with the Company, AbilityOne, AbilityOne
Corporation, PDSI and Webster, the "Obligors"), jointly and severally, promise
to pay to [____], or registered assigns, the principal sum of $[_____] on
November 25, 2008, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at the rate of 4.14% per
annum from the date hereof, payable semiannually, on May 25 and November 25, in
each year, commencing with the May 25 or November 25 next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 6.14% or (ii) 2% over the rate of interest publicly
announced by Bank One, NA, or its successor, from time to time in Chicago,
Illinois as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank One, NA in Chicago, Illinois or at such
other place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreement referred to below.
Exhibit 1(c)
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase Agreement dated as of November 15,
2003 (as from time to time amended, the "Note Purchase Agreement"), between the
Obligors and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representations set forth in Section 6.2 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Obligors may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Obligors will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
2
Exhibit 1(c)
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
PATTERSON DENTAL COMPANY
By:
------------------------------------
Name: R. Stephen Armstrong
Title: Executive Vice President & Chief
Financial Officer
ABILITYONE PRODUCTS CORP.
ABILITYONE CORPORATION
PATTERSON DENTAL SUPPLY, INC.
WEBSTER VETERINARY SUPPLY, INC.
By:
------------------------------------
Name: R. Stephen Armstrong
Title: Vice President and Treasurer
WEBSTER MANAGEMENT, LP
By: WEBSTER VETERINARY SUPPLY, INC., its
General Partner
By:
--------------------------------
Name: R. Stephen Armstrong
Title: Vice President and Treasurer
3
Exhibit 1(c)
EXHIBIT 1(d)
------------
[FORM OF SERIES B-1 SENIOR NOTE]
PATTERSON DENTAL COMPANY
ABILITYONE PRODUCTS CORP.
ABILITYONE CORPORATION
PATTERSON DENTAL SUPPLY, INC.
WEBSTER VETERINARY SUPPLY, INC.
WEBSTER MANAGEMENT, LP
FLOATING RATE SENIOR NOTE, SERIES B-1
DUE NOVEMBER 25, 2008
No. B-1R-[_____] [Date]
$[_______] PPN: 70341 @ AD 1
FOR VALUE RECEIVED, the undersigned, PATTERSON DENTAL COMPANY, a
Minnesota corporation (the "Company"), ABILITYONE PRODUCTS CORP., a Delaware
corporation ("AbilityOne"), ABILITYONE CORPORATION, a Michigan corporation
("AbilityOne Corporation"), PATTERSON DENTAL SUPPLY, INC., a Minnesota
corporation ("PDSI"), WEBSTER VETERINARY SUPPLY, INC., a Minnesota corporation
("Webster"), and WEBSTER MANAGEMENT, LP, a Minnesota limited partnership
("Webster Management" and, collectively with the Company, AbilityOne, AbilityOne
Corporation, PDSI and Webster, the "Obligors"), jointly and severally, promise
to pay to [____], or registered assigns, the principal sum of $[_______] on
November 25, 2008, with interest (computed on the basis of a 360-day year and
the actual number of days elapsed) (a) on the unpaid principal thereof at a
floating rate equal to the Adjusted LIBOR Rate from time to time, payable
quarterly on each February 25, May 25, August 25 or November 25, commencing with
the February 25, May 25, August 25 or November 25 next succeeding the date
hereof until the principal shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any LIBOR Breakage Amount at the Default Rate until paid.
Payments of principal of, interest on and any LIBOR Breakage Amount
with respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank One, NA in Chicago, Illinois or at such
other place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreement referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase Agreement dated as of November 15,
2003 (as from time to time amended, the "Note Purchase Agreement"), between the
Obligors and the respective Purchasers
Exhibit 1(d)
named therein and is entitled to the benefits thereof. Reference is made to the
Note Purchase Agreement for the definitions used herein and the method of
calculating the interest and other payments to be made on or in respect of this
Note. Each holder of this Note will be deemed, by its acceptance hereof, (i) to
have agreed to the confidentiality provisions set forth in Section 20 of the
Note Purchase Agreement and (ii) to have made the representations and agreement
set forth in Section 6.2 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Obligors may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Obligors will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable LIBOR Breakage Amount) and with the effect provided in the Note
Purchase Agreement.
2
Exhibit 1(d)
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
PATTERSON DENTAL COMPANY
By:
------------------------------------
Name: R. Stephen Armstrong
Title: Executive Vice President & Chief
Financial Officer
ABILITYONE PRODUCTS CORP.
ABILITYONE CORPORATION
PATTERSON DENTAL SUPPLY, INC.
WEBSTER VETERINARY SUPPLY, INC.
By:
------------------------------------
Name: R. Stephen Armstrong
Title: Vice President and Treasurer
WEBSTER MANAGEMENT, LP
By: WEBSTER VETERINARY SUPPLY, INC., its
General Partner
By:
--------------------------------
Name: R. Stephen Armstrong
Title: Vice President and Treasurer
3
Exhibit 1(d)
EXHIBIT 1(e)
------------
[FORM OF SERIES B-2 SENIOR NOTE]
PATTERSON DENTAL COMPANY
ABILITYONE PRODUCTS CORP.
ABILITYONE CORPORATION
PATTERSON DENTAL SUPPLY, INC.
WEBSTER VETERINARY SUPPLY, INC.
WEBSTER MANAGEMENT, LP
FLOATING RATE SENIOR NOTE, SERIES B-2
DUE NOVEMBER 25, 2010
No. B-2R-[_____] [Date]
$[_______] PPN: 70341 @ AE 9
FOR VALUE RECEIVED, the undersigned, PATTERSON DENTAL COMPANY, a
Minnesota corporation (the "Company"), ABILITYONE PRODUCTS CORP., a Delaware
corporation ("AbilityOne"), ABILITYONE CORPORATION, a Michigan corporation
("AbilityOne Corporation"), PATTERSON DENTAL SUPPLY, INC., a Minnesota
corporation ("PDSI"), WEBSTER VETERINARY SUPPLY, INC., a Minnesota corporation
("Webster"), and WEBSTER MANAGEMENT, LP, a Minnesota limited partnership
("Webster Management" and, collectively with the Company, AbilityOne, AbilityOne
Corporation, PDSI and Webster, the "Obligors"), jointly and severally, promise
to pay to [____], or registered assigns, the principal sum of $[_______] on
November 25, 2010, with interest (computed on the basis of a 360-day year and
the actual number of days elapsed) (a) on the unpaid principal thereof at a
floating rate equal to the Adjusted LIBOR Rate from time to time, payable
quarterly on each February 25, May 25, August 25 or November 25, commencing with
the February 25, May 25, August 25 or November 25 next succeeding the date
hereof until the principal shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any LIBOR Breakage Amount at the Default Rate until paid.
Payments of principal of, interest on and any LIBOR Breakage Amount
with respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank One, NA in Chicago, Illinois or at such
other place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreement referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase Agreement dated as of November 15,
2003 (as from time to time
Exhibit 1(e)
amended, the "Note Purchase Agreement"), between the Obligors and the respective
Purchasers named therein and is entitled to the benefits thereof. Reference is
made to the Note Purchase Agreement for the definitions used herein and the
method of calculating the interest and other payments to be made on or in
respect of this Note. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representations and agreement set forth in Section 6.2 of the Note Purchase
Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Obligors may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Obligors will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable LIBOR Breakage Amount) and with the effect provided in the Note
Purchase Agreement.
2
Exhibit 1(e)
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
PATTERSON DENTAL COMPANY
By:
------------------------------------
Name: R. Stephen Armstrong
Title: Executive Vice President & Chief
Financial Officer
ABILITYONE PRODUCTS CORP.
ABILITYONE CORPORATION
PATTERSON DENTAL SUPPLY, INC.
WEBSTER VETERINARY SUPPLY, INC.
By:
------------------------------------
Name: R. Stephen Armstrong
Title: Vice President and Treasurer
WEBSTER MANAGEMENT, LP
By: WEBSTER VETERINARY SUPPLY, INC., its
General Partner
By:
--------------------------------
Name: R. Stephen Armstrong
Title: Vice President and Treasurer
3
Exhibit 1(e)