EXHIBIT 4
INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES
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1. Note Agreement dated September 1, 1990 re: Senior Notes due September 15,
2000, which document is incorporated by reference to Annual Report on Form
10-K filed with the Commission for Registrant's fiscal year ended November
30, 1990.
2. Note Agreement dated November 15, 1991 re: Senior Notes due November 15,
1998, which document is incorporated by reference to Annual Report on Form
10-K filed with the Commission for Registrant's fiscal year ended November
30, 1991.
3. Note Purchase Agreement dated August 28, 1996 re: Senior Notes due
September 1, 2006, with form of Note attached.
The Company agrees to provide to the Securities and Exchange Commission, on
request, copies of instruments defining the rights of security holders of
long-term debt of the Company.
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AMERON INTERNATIONAL CORPORATION
$50,000,000 7.92% Senior Notes due September 1, 2006
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NOTE PURCHASE AGREEMENT
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Dated August 28, 1996
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TABLE OF CONTENTS
SECTION PAGE
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1. AUTHORIZATION OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . 1
2. SALE AND PURCHASE OF NOTES . . . . . . . . . . . . . . . . . . . . . . 1
3. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . 2
4.1. Representations and Warranties . . . . . . . . . . . . . . . . . 2
4.2. Performance; No Default. . . . . . . . . . . . . . . . . . . . . 2
4.3. Compliance Certificates. . . . . . . . . . . . . . . . . . . . . 2
4.4. Opinions of Counsel. . . . . . . . . . . . . . . . . . . . . . . 3
4.5. Purchase Permitted By Applicable Law, etc. . . . . . . . . . . . 3
4.6. Sale of Other Notes. . . . . . . . . . . . . . . . . . . . . . . 3
4.7. Payment of Special Counsel Fees. . . . . . . . . . . . . . . . . 4
4.8. Private Placement Number . . . . . . . . . . . . . . . . . . . . 4
4.9. Changes in Corporate Structure . . . . . . . . . . . . . . . . . 4
4.10. Company Documents . . . . . . . . . . . . . . . . . . . . . . . 4
4.11. Proceedings and Documents . . . . . . . . . . . . . . . . . . . 4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . . . . 5
5.1. Organization; Power and Authority. . . . . . . . . . . . . . . . 5
5.2. Authorization, etc. . . . . . . . . . . . . . . . . . . . . . . 5
5.3. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.4. Organization and Ownership of Shares of
Subsidiaries; Affiliates . . . . . . . . . . . . . . . . . . . . 6
5.5. Financial Statements . . . . . . . . . . . . . . . . . . . . . . 6
5.6. Compliance with Laws, Other Instruments, etc. . . . . . . . . . 7
5.7. Governmental Authorizations, etc. . . . . . . . . . . . . . . . 7
5.8. Litigation; Observance of Agreements, Statutes and Orders. . . . 7
5.9. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.10. Title to Property; Leases. . . . . . . . . . . . . . . . . . . . 8
5.11. Licenses, Permits, etc . . . . . . . . . . . . . . . . . . . . . 8
5.12. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . 8
5.13. Private Offering by the Company . . . . . . . . . . . . . . . . 9
5.14. Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . 10
5.15. Existing Debt; Future Liens . . . . . . . . . . . . . . . . . . 10
5.16. Foreign Assets Control Regulations, etc. . . . . . . . . . . . . 10
5.17. Status under Certain Statutes . . . . . . . . . . . . . . . . . 11
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5.18. Environmental Matters . . . . . . . . . . . . . . . . . . . . . 11
6. REPRESENTATIONS OF THE PURCHASER . . . . . . . . . . . . . . . . . . . 11
6.1. Purchase for Investment. . . . . . . . . . . . . . . . . . . . . 11
6.2. Source of Funds. . . . . . . . . . . . . . . . . . . . . . . . . 12
7. INFORMATION AS TO COMPANY . . . . . . . . . . . . . . . . . . . . . . 13
7.1. Financial and Business Information . . . . . . . . . . . . . . . 13
7.2. Officer's Certificate. . . . . . . . . . . . . . . . . . . . . . 16
7.3. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8. PREPAYMENT OF THE NOTES . . . . . . . . . . . . . . . . . . . . . . . 17
8.1. Required Prepayments . . . . . . . . . . . . . . . . . . . . . . 17
8.2. Optional Prepayments with Make-Whole Amount. . . . . . . . . . . 18
8.3. Allocation of Partial Prepayments. . . . . . . . . . . . . . . . 18
8.4. Maturity; Surrender, etc. . . . . . . . . . . . . . . . . . . . 18
8.5. Purchase of Notes. . . . . . . . . . . . . . . . . . . . . . . . 18
8.6. Make-Whole Amount. . . . . . . . . . . . . . . . . . . . . . . . 19
9. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 20
9.1. Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . 20
9.2. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.3. Maintenance of Properties. . . . . . . . . . . . . . . . . . . . 21
9.4. Payment of Taxes and Claims. . . . . . . . . . . . . . . . . . . 21
9.5. Corporate Existence, etc. . . . . . . . . . . . . . . . . . . . 21
9.6. Environmental and Safety Laws. . . . . . . . . . . . . . . . . . 22
9.7. Information Required by Rule 144A. . . . . . . . . . . . . . . . 22
10. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.1. Related Party Transactions . . . . . . . . . . . . . . . . . . . 22
10.2. Merger and Sale of Assets . . . . . . . . . . . . . . . . . . . 23
10.3. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.4. Financial Covenants . . . . . . . . . . . . . . . . . . . . . . 26
10.5. Limitation on Certain Investments . . . . . . . . . . . . . . . 27
10.6. Sale and Lease-back . . . . . . . . . . . . . . . . . . . . . . 28
10.7. Sale or Discount of Receivables . . . . . . . . . . . . . . . . 28
10.8. Subsidiary Restrictions . . . . . . . . . . . . . . . . . . . . 28
10.9. Restricted Leases . . . . . . . . . . . . . . . . . . . . . . . 29
11. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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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 . . . . . . . . . . . . . . . . . . . . . . 34
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. . . . . . . . . . . . . . . . . . . . . . . 37
17.4. Notes held by Company, etc. . . . . . . . . . . . . . . . . . . 37
18. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
19. REPRODUCTION OF DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . 38
20. CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 38
21. SUBSTITUTION OF PURCHASER . . . . . . . . . . . . . . . . . . . . . . 39
22. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
22.1. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 39
22.2. Payments Due on Non-Business Days . . . . . . . . . . . . . . . 40
22.3. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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22.4. Construction . . . . . . . . . . . . . . . . . . . . . . . . . . 40
22.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 40
22.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 40
SCHEDULE A -- INFORMATION RELATING TO PURCHASERS
SCHEDULE B -- DEFINED TERMS
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and
Ownership of Subsidiary Stock
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness
SCHEDULE 10.3 -- Existing Liens
EXHIBIT 1 -- Form of 7.92% Senior Note due September 1, 2006
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the Purchasers
EXHIBIT 5 -- Form of Subordination Agreement
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AMERON INTERNATIONAL CORPORATION
000 XXXXX XXX XXXXXX XXXXXX
XXXXXXXX, XXXXXXXXXX 00000-0000
$50,000,000 7.92% Senior Notes due September 1, 2006
August 28, 1996
TO EACH OF THE PURCHASERS LISTED ON
THE ATTACHED SIGNATURE PAGES:
Ladies and Gentlemen:
Ameron International Corporation, a Delaware corporation (the
"COMPANY"), agrees with you as follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $50,000,000 aggregate
principal amount of its 7.92% Senior Notes due September 1, 2006 (the "NOTES",
such term to include any such notes issued in substitution therefor pursuant to
Section 13 of this Agreement or the Other Agreements (as hereinafter defined)).
The Notes shall be substantially in the form set out in Exhibit 1, 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.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company
will issue and sell to you and you will purchase from the Company, at the
Closing provided for in Section 3, Notes in the principal amount specified
opposite your name in Schedule A at the purchase price of 100% of the principal
amount thereof. Contemporaneously with entering into this Agreement, the
Company is entering into separate Note Purchase Agreements (the "OTHER
AGREEMENTS") identical with this Agreement with each of the other purchasers
named in Schedule A (the "OTHER PURCHASERS"), providing for the sale at such
Closing to each of the Other Purchasers of Notes in the principal amount
specified opposite its name in Schedule A. Your obligation hereunder and the
obligations of the Other Purchasers under the Other Agreements are several and
not joint obligations and you shall have no obligation under any Other Agreement
and no liability to any Person for the performance or non-performance by any
Other Purchaser thereunder.
1
3. CLOSING.
The sale and purchase of the Notes to be purchased by you and the
Other Purchasers shall occur at the offices of O'Melveny & Xxxxx LLP, 000 Xxxxx
Xxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000, at 9:00 a.m., Los Angeles time,
at a closing (the "CLOSING") on August 28, 1996 or on such other Business Day
thereafter on or prior to August 29, 1996 as may be agreed upon by the Company
and you and the Other Purchasers. At the Closing the Company will deliver to you
the Notes to be purchased by you in the form of a single Note (or such greater
number of Notes in denominations of at least $500,000 as you may request) dated
the date of the Closing and registered in your name (or in the name of your
nominee), against delivery by you to the Company or its order of immediately
available funds in the amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company to Bank of America,
0000 Xxxxxxx Xxxx., Xxxxxxx, Xxxxxxxxxx 00000, ABA No. 000000000, Account Name:
Xxxxxx, Account Number: 1233650166. If at the Closing the Company shall fail to
tender such Notes to you as provided above in this Section 3, or any of the
conditions specified in Section 4 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
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 Company in this Agreement
shall be correct when made and at the time of the Closing.
4.2. PERFORMANCE; NO DEFAULT.
The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing and after giving effect to the issue and sale
of the Notes (and the application of the proceeds thereof as contemplated by
Schedule 5.14) no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction since May 31, 1996 that would have been prohibited by Section 10
hereof had such Section applied since such date.
2
4.3. COMPLIANCE CERTIFICATES.
(a) OFFICER'S CERTIFICATE. The Company shall have delivered to you
an Officer's Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) SECRETARY'S CERTIFICATE. The Company shall have delivered to you
a certificate of the Secretary of the Company certifying as to (i) the
resolutions of the Board of Directors of the Company approving the transactions
contemplated by this Agreement and the Notes and the execution, delivery and
performance thereof, and authorizing the officers of the Company to execute and
deliver this Agreement and the Notes in such form as they deem necessary and
appropriate, and (ii) the signatures and incumbency of the officers of the
Company executing this Agreement and the Notes.
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 Xxxxxx Xxxxx, General Counsel for
the Company, covering the matters set forth in Exhibit 4.4(a) and covering such
other matters incident to the transactions contemplated hereby as you or your
counsel may reasonably request (and the Company hereby instructs its counsel to
deliver such opinion to you) and (b) from O'Melveny & Xxxxx 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 insurance companies
without restriction as to the character of the particular investment, (ii) not
violate any applicable law or regulation (including, without limitation,
Regulation G, 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 Company shall sell to the Other
Purchasers and the Other Purchasers shall purchase the Notes to be purchased by
them at the Closing as specified in Schedule A.
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4.7. PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company shall
have paid on or before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4 to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.
4.8. PRIVATE PLACEMENT NUMBER.
A Private Placement number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for the Notes.
4.9. CHANGES IN CORPORATE STRUCTURE.
Except as specified in Schedule 4.9, the Company shall not have
changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Section 5.5.
4.10. COMPANY DOCUMENTS.
The Company shall have delivered to you the following, each dated the
date of the Closing unless otherwise indicated:
(a) copies of its Certificate of Incorporation, certified by the
Secretary of State of the State of Delaware;
(b) copies of the Bylaws of the Company, certified by the Secretary
of the Company;
(c) a good standing certificate from the Secretary of State of
Delaware and each other state in which the Company has major operations or
manufacturing facilities and, to the extent generally available, a certificate
or other evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such states, each
dated a recent date prior to the date of the Closing; and
(d) such other documents or certificates as you may reasonably
request.
4.11. PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special
4
counsel shall have received all such counterpart originals or certified or
other copies of such documents as you or they may reasonably request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1. ORGANIZATION; POWER AND AUTHORITY.
The Company is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Company has the corporate power and authority
to own or hold under lease the properties it purports to own or hold under
lease, to transact the business it transacts and proposes to transact, to
execute and deliver this Agreement and the Other Agreements and the Notes and
to perform the provisions hereof and thereof.
5.2. AUTHORIZATION, ETC.
This Agreement and the Other Agreements and the Notes have been
duly authorized by all necessary corporate action on the part of the Company,
and this Agreement constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (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.
Except as disclosed in Schedule 5.3, this Agreement, the documents,
certificates or other writings delivered to you by or on behalf of the
Company in connection with the transactions contemplated hereby and the
financial statements listed in Section 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 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 Section 5.5,
since November 30, 1995, there has been no change in the financial condition,
operations, business, properties or prospects of the Company or any
Subsidiary except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact
known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not
5
been set forth herein or in the other documents, certificates and other
writings delivered to you by or on behalf of the Company specifically for use
in connection with the transactions contemplated hereby.
5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES.
(a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its organization,
and the percentage of shares of each class of its capital stock or similar
equity interests outstanding owned by the Company and each other Subsidiary,
(ii) of the Company's Affiliates, other than Subsidiaries, and (iii) of the
Company's directors and senior officers.
(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 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 each Purchaser copies of (i) audited
financial statements of the Company and its Subsidiaries for the fiscal years
ended in 1993, 1994 and 1995 and (ii) unaudited financial statements of the
Company and its Subsidiaries for the fiscal quarter ended May 31, 1996 with
figures in comparative form for the corresponding period in the preceding
fiscal year. All such 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
6
Schedule and the consolidated results of their operations and cash flows for
the respective periods so specified and have been prepared in accordance with
GAAP consistently applied throughout the periods involved except as set forth
in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Company 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 the Company or any Subsidiary under, any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate
charter or by-laws, or any other agreement or instrument to which the Company
or any Subsidiary is bound or by which the Company or any Subsidiary or any
of their respective properties may be bound or affected, (ii) conflict with
or result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary or (iii) violate any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Company or any Subsidiary.
5.7. GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration, filing
or declaration with, any Governmental Authority is required in connection
with the execution, delivery or performance by the Company of this Agreement
or the Notes.
5.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any
term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance,
rule or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
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
7
on such returns and all other taxes and assessments levied upon them or their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (i) the amount of which is
not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which the Company or a
Subsidiary, as the case may be, has established adequate reserves in
accordance with GAAP. The Company knows of no basis for any other tax or
assessment that could reasonably be expected to have a Material Adverse
Effect. The charges, accruals and reserves on the books of the Company and
its Subsidiaries in respect of Federal, state or other taxes for all fiscal
periods are adequate. The Federal income tax liabilities of the 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 November
30, 1986.
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.
(a) The Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of others.
(b) To the best knowledge of the Company, no product of the Company
infringes in any material respect any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or
other right owned by any other Person.
(c) To the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Company or any
of its Subsidiaries.
5.12. COMPLIANCE WITH XXXXX.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for such
instances of
8
noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor any
ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in Section 3 of ERISA), and no event, transaction or condition
has occurred or exists that could reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate, or in
the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or
412 of the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) 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 (i) 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 and (ii) the
assumption, made solely for the purpose of making such representation, that
Department of Labor Interpretive Bulletin 75-2 with respect to prohibited
transactions remains valid in the circumstances of the transactions
contemplated herein.
5.13. PRIVATE OFFERING BY THE COMPANY.
Neither the Company 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
9
otherwise approached or negotiated in respect thereof with, any person other
than you and the Other Purchasers, each of which has been offered the Notes
at a private sale for investment. Neither the Company nor anyone acting on
its behalf has taken, or will take, any action that would subject the
issuance or sale of the Notes to the registration requirements of Section 5
of the Securities Act.
5.14. USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Notes as set
forth in Schedule 5.14. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 CFR 207), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board
(12 CFR 220). The Company and its Subsidiaries do not own any margin stock and
the Company does not have any present intention of acquiring margin stock. 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 G.
5.15. EXISTING DEBT; FUTURE LIENS.
(a) Schedule 5.15 sets forth a complete and correct list of all
outstanding Debt of the Company and its Subsidiaries as of the date of this
Agreement. Neither the Company nor any Subsidiary is in default and no waiver
of default is currently in effect, in the payment of any principal or interest
on any Debt of the Company or such Subsidiary and no event or condition exists
with respect to any Debt of the Company or any Subsidiary that would permit (or
that with notice or the lapse of time, or both, would permit) one or more
Persons to cause such 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 the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien.
5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
10
5.17. STATUS UNDER CERTAIN STATUTES.
Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act, as amended.
5.18. ENVIRONMENTAL MATTERS.
Neither the Company nor any Subsidiary has knowledge of any claim or
has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise disclosed
to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of any
facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets
or their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored,
transported or disposed of any Hazardous Materials on or from any real
properties now or formerly owned, leased or operated by any of them 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 the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse
Effect.
6. REPRESENTATIONS OF THE PURCHASER.
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
11
that the Notes have not been registered under the Securities Act and may be
resold only if registered pursuant to the provisions of the Securities Act or
if an exemption from registration is available, except under circumstances
where neither such registration nor such an exemption is required by law, and
that the Company is not required to register the Notes.
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) if you are an insurance company, the Source does not include
assets allocated to any separate account maintained by you in which any
employee benefit plan (or its related trust) has any interest, other than a
separate account that is maintained solely in connection with your fixed
contractual obligations under which the amounts payable, or credited, to
such plan and to any participant or beneficiary of such plan (including any
annuitant) are not affected in any manner by the investment performance of
the separate account; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of Prohibited Transaction Exemption ("PTE") 90-1
(issued January 29, 1990), or (ii) a bank collective investment fund,
within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as
you have disclosed to the Company in writing pursuant to this paragraph (b),
no employee benefit plan or group of plans maintained by the same employer
or employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment fund; or
(c) the Source is an insurance company general account in respect of
which the reserves and liabilities for the general account contract(s) held
by or on behalf of any Benefit Plan (as defined by the annual statement for
life insurance companies approved by the National Association of Insurance
Commissioners (the "NAIC Annual Statement")) together with the amount of the
reserves and liabilities for the general account contract(s) held by or on
behalf of any other Benefit Plans maintained by the same employer (or
affiliate thereof as defined in Prohibited Transaction Class
Exemption 95-60) or by the same employee organization (as defined by the
NAIC Annual Statement) 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 the state of domicile of the insurance
company; or
(d) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when
12
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 paragraph (d); or
(e) the Source is a governmental plan; or
(f) 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 (f); or
(g) 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", "PARTY IN INTEREST" 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 shall deliver to each holder of Notes that is an
Institutional Investor:
(a) QUARTERLY STATEMENTS -- as soon as practicable and in any event
within 45 days after the end of each quarterly period (other than the
last quarterly period) in each fiscal year, consolidated statements of
income, cash flows and stockholders' equity of the Company and its
Restricted Subsidiaries for the period from the beginning of the current
fiscal year to the end of such quarterly period, and a consolidated
balance sheet of the Company and its Restricted Subsidiaries as at the
end of such quarterly period, setting forth in each case in comparative
form figures for the corresponding period in the preceding fiscal year,
all in reasonable detail, prepared in accordance with GAAP, satisfactory
in form to the Required Holders 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
13
of operations and cash flows, subject to changes resulting from year-end
adjustments; PROVIDED, HOWEVER, that delivery pursuant to Section 7.1(d)
below of copies of the Quarterly Report on Form 10-Q of the Company for
such quarterly period filed with the Securities and Exchange Commission
shall be deemed to satisfy the requirements of this Section 7.1(a) if
such Quarterly Report contains consolidated financial statements only
with regard to the Company and its Restricted Subsidiaries;
(b) ANNUAL STATEMENTS -- as soon as practicable and in any event
within 90 days after the end of each fiscal year, consolidated statements
of income, cash flows and stockholders' equity of the Company and its
Restricted Subsidiaries for such year, and a consolidated balance sheet
of the Company and its Restricted Subsidiaries as at the end of such
year, setting forth in each case in comparative form corresponding
consolidated figures from the preceding annual audit, all in reasonable
detail, prepared in accordance with GAAP, satisfactory in form to the
Required Holders, and accompanied
(i) by an opinion thereon of independent certified public
accountants of recognized international standing, which opinion shall
state that such financial statements present fairly, in all material
respects, the financial position of the companies being reported upon
and their results of operations and cash flows and have been prepared
in conformity with GAAP, and that the examination of such accountants
in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances, and
(ii) a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making their
audit, they have become aware of any condition or event that then
constitutes a Default or an Event of Default, and, if they are aware
that any such condition or event then exists, specifying the nature
and period of the existence thereof (it being understood that such
accountants shall not be liable, directly or indirectly, for any
failure to obtain knowledge of any Default or Event of Default unless
such accountants should have obtained knowledge thereof in making an
audit in accordance with generally accepted auditing standards or did
not make such an audit)
; PROVIDED, HOWEVER, that delivery pursuant to Section 7.1(d) below of
copies of the Annual Report on Form 10-K of the Company for such fiscal
year filed with the Securities and Exchange Commission and Annual Report to
Stockholders shall be deemed to satisfy the requirements of this Section
7.1(b) if such Annual Reports contain consolidated financial statements
only with regard to the Company and its Restricted Subsidiaries;
14
(c) RESTRICTED SUBSIDIARY FINANCIAL STATEMENTS -- promptly upon
their becoming available, notice that the Company has, at its election,
arranged for the preparation of any independently audited consolidated
balance sheet and consolidated statements of income, cash flows and
stockholders' equity of a Restricted Subsidiary for any fiscal year, and
promptly following the Company's receipt from any holder of any Note of a
written request for copies of any such financial statements, copies
thereof together with any report thereon by the independent public
accountants auditing such financial statements;
(d) SEC AND OTHER REPORTS -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Restricted Subsidiary to
public securities holders generally, (ii) each regular or periodic
report, each registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all amendments thereto
filed by the Company or any Restricted Subsidiary with the Securities and
Exchange Commission and of all press releases and other statements made
available generally by the Company or any Restricted Subsidiary to the
public concerning developments that are Material, and (iii) each other
report submitted to the Company or any Restricted Subsidiary that is a
Significant Subsidiary by independent accountants in connection with any
material special audit made by them of the books of the Company or any
such Significant Subsidiary;
(e) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- promptly, and in any
event within five days after a Responsible Officer becoming aware of the
existence of any Default or Event of Default or that any Person has given
any notice or taken any action with respect to a claimed default
hereunder or that any Person has given any notice or taken any action
with respect to a claimed default of the type referred to in Section
11(f), a written notice specifying the nature and period of existence
thereof and what action the Company is taking or proposes to take with
respect thereto;
(f) ERISA MATTERS -- promptly, and in any event within five days
after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if any,
that the Company or an ERISA Affiliate proposes to take with respect
thereto:
(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
15
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;
(g) NOTICES FROM GOVERNMENTAL AUTHORITY -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect; and
(h) REQUESTED INFORMATION -- with reasonable promptness, such other
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or any of its
Subsidiaries or relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to time may be
reasonably requested by any such holder of Notes.
7.2. OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) COVENANT COMPLIANCE -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Sections 10.2(a)(i), 10.2(a)(ii),
10.3(i), 10.4, 10.5, 10.7 and 10.9 hereof 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 Restricted Subsidiaries from the beginning of the
quarterly or annual period covered by the statements then being furnished
to the date of the certificate and that such review shall not have
disclosed the existence during such period of any condition or
16
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company
or any Restricted Subsidiary to comply with the provisions of any
Environmental Laws where such non-compliance could reasonably be
expected to result in a Material Adverse Effect), 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 shall permit the representatives of each holder of Notes
that is an Institutional Investor:
(a) NO DEFAULT -- if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the
Company, to visit the principal executive office of the Company, to
discuss the affairs, finances and accounts of the Company and its
Restricted Subsidiaries with the Company's officers, and (with the
consent of the Company, which consent will not be unreasonably withheld)
its independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Restricted 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 Restricted Subsidiary, to examine all
their respective books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and
independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts
of the Company and its Restricted Subsidiaries), all at such times and as
often as may be requested.
8. PREPAYMENT OF THE NOTES.
8.1. REQUIRED PREPAYMENTS.
On September 1, 2001 and on each September 1 thereafter to and
including September 1, 2005 the Company will prepay $8,333,333 principal
amount (or such lesser principal amount as shall then be outstanding) of the
Notes at par and without payment of the Make-Whole Amount or any premium,
PROVIDED, that upon any partial prepayment of the Notes pursuant to Section 8.2,
the principal amount of each required prepayment of the Notes becoming due
under this Section 8.1 on and after the date of any such partial prepayment
shall be reduced in the same proportion as the aggregate unpaid principal
amount of the Notes is reduced as a result of such prepayment or purchase.
17
8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.
The Company may, at its option, upon notice as provided below,
prepay at any time all, or from time to time any part of, the Notes, in an
amount not less than $1,000,000 of the aggregate principal amount of the
Notes then outstanding in the case of a partial prepayment, at 100% of the
principal amount so prepaid, PLUS the Make-Whole Amount determined for the
prepayment date with respect to such principal amount. The Company will give
each holder of Notes written notice of each optional prepayment under this
Section 8.2 not less than 30 days and not more than 60 days prior to the date
fixed for such prepayment. Each such notice shall specify such date, the
aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid (determined
in accordance with Section 8.3), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and
shall be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the prepayment),
setting forth the details of such computation. Two Business Days prior to
such prepayment, the Company shall deliver to each holder of Notes a
certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
8.3. ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes, the principal
amount of the Notes to be prepaid shall be allocated 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.
8.4. MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this Section 8,
the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount,
if any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount
shall cease to accrue. Any Note paid or prepaid in full shall be surrendered
to the Company and cancelled and shall not be reissued, and no Note shall be
issued in lieu of any prepaid principal amount of any Note.
8.5. PURCHASE OF NOTES.
The Company will not and will not permit any Affiliate controlled
directly or indirectly by the Company or any of its Subsidiaries 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
18
the Notes. The Company will promptly cancel all Notes acquired by it or any
Affiliate controlled directly or indirectly by the Company or any of its
Subsidiaries 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 Note, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, PROVIDED that the Make-Whole Amount may in
no event be less than zero. For the purposes of determining the Make-Whole
Amount, the following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.2 or has become or
is declared to be immediately due and payable pursuant to Section 12.1,
as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called Principal of
any Note, 0.25% PLUS the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the second Business
Day preceding the Settlement Date with respect to such Called Principal,
on the display designated as "Page 678" on the Telerate Access Service
(or such other display as may replace Page 678 on Telerate Access
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 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 duration closest to and
greater than the Remaining
19
Average Life and (2) the actively traded U.S. Treasury security with
the duration closest to and less than the Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, PROVIDED that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
9.1. COMPLIANCE WITH LAW.
The Company will and will cause each of its Subsidiaries to comply
with all laws, ordinances or governmental rules or regulations to which each
of them is subject, including, without limitation, Environmental Laws, and
will obtain and maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the ownership
of their respective properties or to the conduct of their respective businesses,
in each case to the extent necessary to ensure that non-compliance with such
laws, ordinances or governmental rules or regulations or failures to obtain
or maintain in effect such licenses, certificates, permits, franchises and
other governmental authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
20
9.2. INSURANCE.
The Company will and will cause each of its Subsidiaries to maintain,
with financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated and
upon request of any holder of Notes, the Company will deliver an Officer's
Certificate specifying the details of such insurance in effect at that time.
9.3. MAINTENANCE OF PROPERTIES.
The Company will and will cause each of its Restricted Subsidiaries to
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith may be
properly conducted at all times, PROVIDED that this Section shall not prevent
the Company or any Restricted Subsidiary from discontinuing the operation and
the maintenance of any of its properties if such discontinuance is desirable in
the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
9.4. PAYMENT OF TAXES AND CLAIMS.
The Company will and will cause each of its Subsidiaries to file all
tax returns required to be filed in any jurisdiction and to pay and discharge
all taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, PROVIDED
that neither the Company nor any Subsidiary need pay any such tax or assessment
or claims if (i) the amount, applicability or validity thereof is contested by
the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.
9.5. CORPORATE EXISTENCE, ETC.
The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Section 10.2, the Company will at
all times preserve and keep in full force and effect the corporate existence of
each of its Restricted Subsidiaries
21
(unless merged into the Company or a Restricted Subsidiary) and all rights
and franchises of the Company and its Restricted Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to
preserve and keep in full force and effect such corporate existence, right
or franchise could not, individually or in the aggregate, have a Material
Adverse Effect.
9.6. ENVIRONMENTAL AND SAFETY LAWS.
The Company will, and will cause each Subsidiary to, deliver promptly
to each holder of Notes any notice of (a) any material enforcement, cleanup,
removal or other material governmental, regulatory or other actions instituted,
completed or, to the Company's or such Subsidiary's best knowledge, threatened
pursuant to any Environmental Laws; (b) all material Environmental Liabilities
and Costs against or in respect of any Property, the Company or any Subsidiary;
and (c) the Company's or any Subsidiary's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of any Property that
such Company or Subsidiary has reason to believe could cause any Property or any
material part thereof to be subject to any material restrictions on its
ownership, occupancy, transferability or use under any Environmental Laws.
9.7. INFORMATION REQUIRED BY RULE 144A.
The Company will, upon the request of the holder of any Note, provide
such holder, and any qualified institutional buyer designated by such holder,
such financial and other information as such holder may reasonably determine to
be necessary in order to permit compliance with the information requirements of
Rule 144A under the Securities Act in connection with the resale of Notes,
except at such times as the Company is subject to the reporting requirements of
section 13 or 15(d) of the Exchange Act. For the purpose of this Section 9.7,
the term "qualified institutional buyer" shall have the meaning specified in
Rule 144A under the Securities Act, but shall not include any Person who is
engaged in businesses of the type then being engaged in by the Company or any of
its Subsidiaries.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
10.1. RELATED PARTY TRANSACTIONS.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly engage in any transaction, including the purchase,
sale, exchange or other transfer of property or other assets or the rendering of
any services, or otherwise deal with, any Shareholder or any other Affiliate of
the Company (including Unrestricted Subsidiaries), except in the ordinary course
of business and upon terms that are materially no less favorable to the Company
or such Restricted Subsidiary, as the case may be, than those that might be
obtained in an arm's-length transaction with an unrelated third party.
22
10.2. MERGER AND SALE OF ASSETS.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, merge with or into or consolidate with any other Person or sell,
lease or transfer to any Person or otherwise dispose of assets, which together
with all other assets sold, leased, transferred or otherwise disposed of
(including deemed dispositions of assets as described in clause (b)(iii) of the
definition of "Unrestricted Subsidiary" set forth in Schedule B) during (i) the
immediately preceding 12 months, have an aggregate net book value exceeding 15%
of Consolidated Tangible Assets (measured as at the fiscal quarter end
immediately preceding such sale or disposition) or (ii) the period beginning on
the date hereof and ending on the date of any such proposed sale or disposition,
have an aggregate net book value exceeding 40% of Consolidated Tangible Assets
(measured as at the fiscal quarter end immediately preceding such sale or
disposition) and in each case, no Default or Event of Default would occur after
giving effect thereto, except that:
(A) any Restricted Subsidiary may merge with the Company (PROVIDED
that the Company shall be the continuing or surviving corporation) or with
any one or more wholly owned Restricted Subsidiaries organized in the
United States;
(B) any Restricted Subsidiary organized in the United States may
sell, lease, transfer or otherwise dispose of any of its assets to the
Company or to any wholly owned Restricted Subsidiary organized in the
United States;
(C) any Restricted Subsidiary organized outside the United States may
sell, lease, transfer or otherwise dispose of any of its assets on
arm's-length terms to the Company or to any wholly owned Restricted
Subsidiary;
(D) the Company may merge or consolidate with another Person so long
as (1) the Company will be the surviving corporation and (2) immediately
after such merger or consolidation and after giving effect thereto, no
Event of Default or Default shall have occurred; and
(E) the Company and any Restricted Subsidiary may engage in normal
sales or other dispositions of (1) inventory and (2) vehicles or equipment
with little or no remaining useful life in each case on arm's-length terms
and otherwise in the ordinary course of business.
(b) If the net amount of consideration received by the Company or any
Restricted Subsidiary pursuant to any sale or other disposition of assets
described in clauses (i) or (ii) of Section 10.2(a) is applied to the
acquisition by the Company or such Restricted Subsidiary, within 180 days after
such sale or disposition, of similar assets of the Company or such Restricted
Subsidiary to be used in the ordinary course of business of the Company or such
Restricted Subsidiary, then such sale or disposition shall not be deemed to be a
sale or disposition of assets for the purpose of determining compliance with
clauses (i) or (ii) of Section 10.2(a). Within 30 days of such acquisition of
similar assets (or, if earlier, at the
23
time an officer's compliance certificate is delivered pursuant to Sections
7.1(a) or (b)), the Company shall deliver to each holder of Notes an
Officer's Certificate certifying in reasonable detail as to such acquisition
of similar assets.
(c) For purposes of determining compliance by the Company with the
provisions of Section 10.2(a), sales or other dispositions of assets described
in clauses (B), (C) and (E) of Section 10.2(a) are not included in making the
calculations required for clauses (i) and (ii) of Section 10.2(a).
10.3. LIENS.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create, assume or permit to exist at any time any
Lien of any kind (unless prior written consent to the creation or assumption
thereof shall have been obtained pursuant to Section 17) on or with respect to
any of its property or assets, whether now owned or hereafter acquired, except
(a) Liens for taxes not yet due or which are being actively contested
in good faith by appropriate proceedings;
(b) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics and materialmen incurred in the ordinary course of business for
sums not yet due or being actively contested in good faith by appropriate
proceedings;
(c) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business (i) in connection with workers'
compensation, unemployment insurance and other types of social security or
(ii) to secure (or to obtain letters of credit that secure) the performance
of tenders, statutory obligations, surety and appeal bonds, bids, leases,
performance bonds, purchase, construction or sales contracts and other
similar obligations; PROVIDED, that in each case such Liens are not
incurred or made in connection with the borrowing of money, the obtaining
of advances or credit or the payment of the deferred purchase price of
property, and such Liens do not in the aggregate materially detract from
the value of the Company's or any Restricted Subsidiary's property or
assets or materially impair the use thereof in the operation of its
business;
(d) Liens on property or assets of a Restricted Subsidiary to secure
obligations of such Restricted Subsidiary to the Company or a wholly-owned
Restricted Subsidiary;
(e) Liens now or hereafter required by this Agreement;
(f) Liens existing on the date hereof as specified by the Company on
Schedule 10.3 attached hereto; PROVIDED, HOWEVER, that all Debt secured by
such Liens permitted by this Section 10.3(f) shall be permitted under
Section 10.4(c);
24
(g) any Lien created to secure all or any part of the purchase price,
or to secure Debt incurred or assumed to pay all or any part of the
purchase price, of property acquired by the Company or a Restricted
Subsidiary after the date hereof; PROVIDED, HOWEVER, that (i) any such Lien
shall be confined solely to the item or items of property so acquired and,
if expressly required by the terms of the instrument originally creating
such Lien, other property which is an improvement to or is acquired for
specific use in connection with such acquired property or which is real
property being improved by such acquired property, (ii) the principal
amount of the Debt secured by any such Lien shall (exclusive of capitalized
interest that is treated as Debt for purposes of Sections 10.4(b) or (c))
at no time exceed an amount equal to 100% of the lesser of (a) the cost to
the Company or such Restricted Subsidiary of the property so acquired and
(b) the fair market value of such property (as determined in good faith by
the Board of Directors of the Company) at the time of such acquisition,
(iii) any such Lien shall be created within six months after, in the case
of property, its acquisition, or, in the case of improvements, their
completion and (iv) all Debt secured by Liens created or existing pursuant
to this Section 10.3(g) shall be permitted under Section 10.4(c);
(h) any Lien existing on property of a Person immediately prior to
its being consolidated with or merged into the Company or a Restricted
Subsidiary or its becoming a Restricted Subsidiary, or any Lien existing on
any property acquired by the Company or any Restricted Subsidiary at the
time of such acquisition (whether or not the Debt secured thereby shall
have been assumed), PROVIDED, HOWEVER, that (i) no such Lien shall have
been created or assumed in contemplation of such consolidation or merger or
such Person's becoming a Restricted Subsidiary or such acquisition of
property, (ii) each such Lien shall at all times be confined solely to the
item or items of property so acquired and, if required by the terms of the
instrument originally creating such Lien, other property which is an
improvement to or is acquired for specific use in connection with such
acquired property and (iii) all Debt secured by Liens created or existing
pursuant to this Section 10.3(h) shall be permitted under Section 10.4(c);
(i) any other Liens securing Debt; PROVIDED, that all Debt secured by
Xxxxx created or existing pursuant to this Section 10.3(i) shall be
permitted under Section 10.4(c); and
(j) any Lien renewing, extending or refunding any Lien permitted by
clauses (d), (e), (f), (g), (h) and (i) of this Section 10.3; PROVIDED,
HOWEVER, that (i) the principal amount of Debt secured by such Lien
immediately prior thereto is not increased, the maturity thereof is not
shortened and such Lien is not extended to any other assets or property and
(ii) all Debt secured by Liens created or existing pursuant to this Section
10.3(j) shall be permitted under Section 10.4(c).
If, notwithstanding the prohibition contained herein, the Company
shall create, incur, or suffer to be incurred or to exist any Lien upon any of
its property or assets, or the
25
property or assets of any of its Restricted Subsidiaries, whether now owned
or hereafter acquired, or transfer any property for the purpose of subjecting
the same to the payment of obligations in priority to the payment of its or
their general creditors, or acquire or permit any Restricted Subsidiary to
acquire, any property or assets upon conditional sales agreements or other
title retention devices, other than as permitted by the provisions of clauses
(a) through (j) of this Section 10.3, then at the request of the Required
Holders, the Company shall make or cause to be made effective provision
whereby the Notes will be secured equally and ratably with any and all other
obligations thereby secured, such security to be pursuant to agreements
reasonably satisfactory to the Required Holders and, in any such case, the
Notes shall have the benefit, to the fullest extent that, and with such
priority as, the holders of the Notes may be entitled under applicable law,
of an equitable Lien on such property, and the holders of the Notes shall
receive an opinion of nationally recognized independent counsel selected by
the Company reasonably satisfactory to the Required Holders that the holders
of the Notes are so secured. Such violation of this Section 10.3 will
constitute an Event of Default, whether or not provision is made for an equal
and ratable Lien pursuant to this Section 10.3.
10.4. FINANCIAL COVENANTS.
(a) CONSOLIDATED TANGIBLE NET WORTH REQUIREMENT. The Company will
not, at any time, permit Consolidated Tangible Net Worth to be less than the sum
of (i) $110,000,000, PLUS (ii) an aggregate amount equal to 25% of its
Consolidated Net Earnings (but, in each case, only if a positive number) for
each completed fiscal year beginning with the fiscal year ended November 30,
1996.
(b) LIMITATION ON RATIO OF TOTAL DEBT TO TANGIBLE GROSS WORTH. The
Company will not, at any time, permit the ratio of Total Debt to Tangible Gross
Worth to exceed .60:1.00; PROVIDED, that (i) during the fiscal year beginning on
December 1, 1997 and ending on November 30, 1998, there shall have been a period
of at least 45 consecutive days during which the ratio of Total Debt to Tangible
Gross Worth does not exceed .575:1.00, and (ii) during each subsequent fiscal
year of the Company, there shall have been a period of at least 45 consecutive
days during which the ratio of Total Debt to Tangible Gross Worth does not
exceed .55:1.00.
(c) LIMITATION ON CERTAIN DEBT. The Company will not, at any time,
permit the sum (without duplication) of (i) Debt of Restricted Subsidiaries
(including, without limitation, Debt resulting from any Guaranty by a Restricted
Subsidiary of the obligations of the Company) PLUS (ii) Debt secured by Liens of
the type described in Sections 10.3(f), (g), (h), (i) and (j), to exceed the
greater of (a) $40,000,000 or (b) 20% of Consolidated Tangible Net Worth at such
time.
If any Restricted Subsidiary provides a Guaranty with respect to any
Debt of the Company other than the Notes, the Company will cause such Restricted
Subsidiary to provide a Guaranty with respect to the Notes equally and ratably
with such other Guaranty
26
for so long as such other Guaranty continues in effect; PROVIDED, that
compliance with the foregoing sentence will not cure a breach of Section
10.4(c).
10.5. LIMITATION ON CERTAIN INVESTMENTS.
The Company will not, and will not permit any Restricted Subsidiary
to, at any time, make or permit to remain outstanding any loan or advance to, or
own, purchase or acquire stock, obligations or securities of, or any other
interest in, or make or commit to make any capital contribution to, any Person,
except that the Company and its Restricted Subsidiaries may:
(a) permit to remain outstanding loans, investments and advances to
or in the Affiliated Companies as shown on the Company's consolidated
balance sheet at August 31, 1991;
(b) make loans, investments and advances in and to Restricted
Subsidiaries, including any investment in a corporation which, after giving
effect to such investment, will become a Restricted Subsidiary;
(c) make investments in any money market fund the aggregate asset
value of which is at least $200,000,000, which is managed by a fund manager
of recognized national standing, and the investment in which, in accordance
with GAAP, is classified as a current asset on the balance sheet of the
Company or a Restricted Subsidiary, as the case may be;
(d) own, purchase or acquire direct obligations of the United States
or any of its agencies or obligations fully guaranteed by the United
States, PROVIDED THAT such obligations mature within two years from the
date acquired;
(e) own, purchase or acquire certificates of deposit which mature
within one year from the date of purchase and are issued by any commercial
bank or trust company (i) organized under the laws of the United States or
any of its states, (ii) having consolidated capital, surplus and undivided
profits aggregating at least $500,000,000 and (iii) whose senior debt
securities are rated A or better by S&P or an equivalent rating from
another nationally recognized credit rating agency;
(f) own, purchase or acquire commercial paper given an "A-1" rating
or better by S&P or an equivalent rating by another nationally recognized
credit rating agency and maturing not more than 270 days from the date
acquired;
(g) make or permit to remain outstanding any other loans, advances or
investments, including additional investments in Affiliated Companies or
similar joint ventures or Unrestricted Subsidiaries, so long as the
aggregate original cost of or expenditures for all such additional loans,
advances or investments does not exceed at any time 15% of Consolidated
Tangible Net Worth; PROVIDED, HOWEVER, that
27
increases or decreases in the Company's or a Restricted Subsidiary's equity
in an Affiliated Company resulting from such company's earnings or losses
shall not be included in computing compliance with this clause (g); and
(h) make investments in life insurance policies maintained for the
benefit of members of its executive management.
10.6. SALE AND LEASE-BACK.
The Company will not, and will not permit any Restricted Subsidiary
to, enter into any arrangement providing for the leasing by the Company or
any Restricted Subsidiary of real or personal property which has been or is
to be sold or transferred by the Company or any Restricted Subsidiary to a
lender or investor or to any Person to whom funds have been or are to be
advanced by such lender or investor on the security of such property or
rental obligations of the Company or any Restricted Subsidiary; PROVIDED,
HOWEVER that the Company or any Restricted Subsidiary may enter into such
sale/lease-back transactions (other than in respect of assets sold to the
lessor by an Unrestricted Subsidiary) only if (a) the assets to be so sold
may be sold in compliance with Section 10.2 (PROVIDED, HOWEVER, that
compliance with Section 10.2 shall not be required with regard to assets
(other than any assets acquired upon the application of any consideration
received by the Company or any Restricted Subsidiary pursuant to a
disposition of assets as described in Section 10.2(b)) if the sale-leaseback
transaction occurs within 24 months of the date the property that is the
subject of such sale/lease-back transaction is acquired, or in the case of
improvements thereto, of the date completed, whichever event occurs later);
and (b) the rental obligations payable pursuant to such leaseback are
permitted under Section 10.8 (whether or not such lease is characterized as a
"true lease" in accordance with GAAP).
10.7. SALE OR DISCOUNT OF RECEIVABLES.
The Company will not, and will not permit any Restricted Subsidiary
to, sell with recourse, or discount or otherwise sell for less than the face
value thereof, more than $5,000,000 original principal amount of its notes
receivable or accounts receivable in any fiscal year; PROVIDED, HOWEVER, that
the Company's foreign Restricted Subsidiaries may sell their accounts or notes
receivable, so long as the discount applied does not exceed the net present
value of the receivables sold for the period of time equal to the estimated
collection period and using a discount factor no greater than prevailing market
rates.
10.8. SUBSIDIARY RESTRICTIONS.
The Company will not, and will not permit any Restricted Subsidiary
to, incur or permit to exist at any time any restriction on such Restricted
Subsidiary's ability to make (a) any dividend payments or other distributions of
cash, assets, properties, obligations or securities on account of any shares of
any class of such Restricted Subsidiary's capital stock (other than restrictions
on payments or distributions in connection with minority interests); or (b) any
repurchases, redemptions, retirement or other acquisitions of such Restricted
28
Subsidiary's capital stock or the establishment of any sinking fund or other
fund for any such purpose, to repay loans or advances, or to otherwise transfer
property or other assets, to the Company or any Restricted Subsidiary that is a
parent of such Restricted Subsidiary.
10.9. RESTRICTED LEASES.
The Company will not, and will not permit any Restricted Subsidiary
to, incur or permit to exist at any time any obligation, direct or indirect,
for rental payments under a Restricted Lease if, after giving effect thereto,
the aggregate amount of all minimum noncancellable rental payments under
Restricted Leases to which the Company and its Restricted Subsidiaries are
parties or otherwise obligated exceeds for any fiscal year 6% of Consolidated
Tangible Net Worth as at the end of the immediately preceding fiscal quarter.
11. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" shall exist if any of the following conditions
or events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any Note
for more than five Business Days after the same becomes due and payable;
or
(c) the Company defaults in the performance of or compliance with
any term contained in Section 10; or
(d) the Company defaults in the performance of or compliance with
any term contained herein (other than those referred to in paragraphs
(a), (b) and (c) of this Section 11) and such default is not remedied
within 30 days after the earlier of (i) a Responsible Officer obtaining
actual knowledge of such default and (ii) the Company receiving written
notice of such default from any holder of a Note (any such written notice
to be identified as a "notice of default" and to refer specifically to
this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or on behalf
of the Company or by any officer of the Company in this Agreement or in
any writing furnished in connection with the transactions contemplated
hereby proves to have been false or incorrect in any material respect on
the date as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal
of or premium or make-whole amount or interest on any Debt beyond any
period of grace provided
29
with respect thereto, or (ii) the Company or any Restricted Subsidiary is
in default in the performance of or compliance with any term of any
evidence of any Debt or of any mortgage, indenture or other agreement
relating thereto or any other condition exists, and as a consequence of
such default or condition such Debt has become, or has been declared (or
one or more Persons are entitled to declare such Debt to be), due and
payable before its stated maturity or before its regularly scheduled
dates of payment, or (iii) as a consequence of the occurrence or
continuation of any event or condition (other than the passage of time or
the right of the holder of Debt to convert such Debt into equity
interests), (X) the Company or any Restricted Subsidiary has become
obligated to purchase or repay Debt before its regular maturity or before
its regularly scheduled dates of payment, or (Y) one or more Persons have
the right to require the Company or any Restricted Subsidiary so to
purchase or repay such Debt; provided that the aggregate outstanding
principal amount of all Debt referred to in clauses (i) through (iii),
inclusive, is at least $5,000,000; or
(g) the Company or any Restricted Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they
become due, (ii) files, or consents by answer or otherwise to the filing
against it of, a petition for relief or reorganization or arrangement or
any other petition in bankruptcy, for liquidation or to take advantage of
any bankruptcy, insolvency, reorganization, moratorium or other similar
law of any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Restricted Subsidiaries, a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy or insolvency
law of any jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Company or any of its Restricted Subsidiaries, or any
such petition shall be filed against the Company or any of its Restricted
Subsidiaries and such petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 are rendered against one or more of
the Company and its Restricted Subsidiaries and which judgments are not,
within 60 days after entry thereof, bonded, discharged or stayed pending
appeal, or are not discharged within 60 days after the expiration of such
stay; or
30
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a
Plan may become a subject of any such proceedings, (iii) the aggregate
"amount of unfunded benefit liabilities" (within the meaning of
section 4001(a)(18) of ERISA) under all Plans, determined in accordance
with Title IV of ERISA, shall exceed $5,000,000, (iv) the Company or any
ERISA Affiliate shall have incurred or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, (v) the Company
or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the
Company or any Subsidiary establishes or amends any employee welfare
benefit plan that provides post-employment welfare benefits in a manner
that would increase the liability of the Company or any Subsidiary
thereunder; and any such event or events described in clauses (i) through
(vi) above, either individually or together with any other such event or
events, could reasonably be expected to have a Material Adverse Effect.
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 the Company described in
paragraph (g) or (h) of Section 11 (other than an Event of Default described in
clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause encompasses clause (i) of paragraph (g))
has occurred, all the Notes then outstanding shall automatically become
immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 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
Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at
the time outstanding affected by such Event of Default may at any time, at its
or their option, by notice or notices to the Company, declare all the Notes
held by it or them to be immediately due and payable.
31
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 (X) all accrued and
unpaid interest thereon and (Y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the
Company (except as herein specifically provided for) and that the provision for
payment of a Make-Whole Amount by the Company in the event that the Notes are
prepaid or are accelerated as a result of an Event of Default, is intended to
provide compensation for the deprivation of such right under such circumstances.
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 not less than 51%
in principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have 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
32
prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under Section 15,
the Company will pay to the holder of each Note on demand such further amount
as shall be sufficient to cover all costs and expenses of such holder
incurred in any enforcement or collection under this Section 12, including,
without limitation, reasonable attorneys' fees, expenses and disbursements.
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
Company shall execute and deliver, at the Company's expense (except as
provided below), one or more new Notes (as requested by the holder thereof)
in exchange therefor, in an aggregate principal amount equal to the unpaid
principal amount of the surrendered Note. Each such new Note shall be payable
to such Person as such holder may request and shall be substantially in the
form of Exhibit 1. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or
dated the date of the surrendered Note if no interest shall have been paid
thereon. The Company may require payment of a sum sufficient to cover any
stamp tax or governmental charge imposed in respect of any such transfer of
Notes. Notes shall not be transferred in denominations of less than
$500,000, PROVIDED that if necessary to enable the registration of transfer
by a holder of its entire holding of Notes, one Note may be in a denomination
of less than $500,000. Any transferee, by its acceptance of a Note
registered in its name (or
33
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 the
Company of the ownership of and the loss, theft, destruction or mutilation of
any Note (which evidence shall be, in the case of an Institutional Investor,
notice from such Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (PROVIDED that if the holder of such Note is,
or is a nominee for, an original Purchaser or another holder of a Note with
a minimum net worth of at least $100,000,000, such Person's own unsecured
agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a
new Note, 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, and interest becoming due and payable on the Notes shall be made in
the State of California at the principal office of the Company in such
jurisdiction. The Company may at any time, by notice to each holder of a
Note, change the place of payment of the Notes so long as such place of
payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
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 Company will pay all sums becoming due on such Note for
principal, Make-Whole Amount, if any, and interest by the method and at the
address specified for such purpose below your name in Schedule A, or by such
other method or at such other address as you shall have from time to time
specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after
34
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at
its principal executive office or at the place of payment most recently
designated by the Company pursuant to Section 14.1. Prior to any sale or
other disposition of any Note held by you or your nominee you will, at your
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to
the Company in exchange for a new Note or Notes pursuant to Section 13.2.
The Company will afford the benefits of this Section 14.2 to any
Institutional Investor that is the direct or indirect transferee of any Note
purchased by you under this Agreement and that has made the same agreement
relating to such Note as you have made in this Section 14.2.
15. EXPENSES, ETC.
15.1. TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including reasonable attorneys'
fees of a special counsel and, if reasonably required, local or other
counsel) incurred by you and each Other Purchaser or holder of a Note in
connection with such transactions and in connection with any amendments,
waivers or consents under or in respect of this Agreement or the Notes
(whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in
enforcing or defending (or determining whether or how to enforce or defend)
any rights under this Agreement or the Notes or in responding to any subpoena
or other legal process or informal investigative demand issued in connection
with this Agreement or the Notes, or by reason of being a holder of any Note,
and (b) the costs and expenses, including financial advisors' fees, incurred
in connection with the insolvency or bankruptcy of the Company or any
Subsidiary or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes. The Company will pay, and
will save you and each other holder of a Note harmless from, all claims in
respect of any fees, costs or expenses if any, of brokers and finders (other
than those retained by you).
15.2. SURVIVAL.
The obligations of the Company under this Section 15 will survive
the payment or transfer of any Note, the enforcement, amendment or waiver of
any provision of this Agreement 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
35
or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any subsequent holder of a Note, regardless of any
investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and supersede
all prior agreements and understandings relating to the subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1. REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it
is used therein), will be effective as to you unless consented to by you in
writing, and (b) no such amendment or waiver may, without the written consent of
the holder of each Note at the time outstanding affected thereby, (i) subject to
the provisions of Section 12 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of, or reduce the rate
or change the time of payment or method of computation of interest or of the
Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or
20.
17.2. SOLICITATION OF HOLDERS OF NOTES.
(a) SOLICITATION. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) PAYMENT. The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security
36
d
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 Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note
nor any delay in exercising any rights hereunder or under any Note shall operate
as a waiver of any rights of any holder of such Note. As used herein, the term
"THIS AGREEMENT" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
17.4. NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent to be
given under this Agreement or the Notes, or have directed the taking of any
action provided herein or in the Notes to be taken upon the direction of the
holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the Company or any of
its Restricted Subsidiaries and 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 telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address specified
for such communications in Schedule A, or at such other address as you or
it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set forth
at the beginning hereof to the attention of Chief Financial Officer, or at
such other address as the Company shall have specified to the holder of
each Note in writing.
37
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 Company agrees and stipulates that, to the
extent permitted by applicable law, any such reproduction shall be admissible
in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not
such reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing
evidence to demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "CONFIDENTIAL INFORMATION"
means information delivered to you by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by you as
being confidential information of the Company or such Subsidiary, PROVIDED
that such term does not include information that (a) was publicly known or
otherwise known to you prior to the time of such disclosure, (b) subsequently
becomes publicly known through no act or omission by you or any person acting
on your behalf, (c) otherwise becomes known to you other than through
disclosure by the Company or any Subsidiary or (d) constitutes financial
statements delivered to you under Section 7.1 that are otherwise publicly
available. You will maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by you in good faith to
protect confidential information of third parties delivered to you, PROVIDED
that you may deliver or disclose Confidential Information to (i) your
directors, officers, employees, agents, attorneys and affiliates (to the
extent such disclosure reasonably relates to the administration of the
investment represented by your Notes), (ii) your financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note, (iv) any Institutional Investor to which
you sell or offer to sell such Note or any part thereof or any participation
therein (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20),
(v) any
38
Person from which you offer to purchase any security of the Company (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (vi) any
federal or state regulatory authority having jurisdiction over you, (vii) the
National Association of Insurance Commissioners or any similar organization,
or any nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other Person to
which such delivery or disclosure may be necessary or appropriate (w) to
effect compliance with any law, rule, regulation or order applicable to you,
(X) in response to any subpoena or other legal process, (y) in connection
with any litigation to which you are a party or (z) if an Event of Default
has occurred and is continuing, to the extent you may reasonably determine
such delivery and disclosure to be necessary or appropriate in the
enforcement or for the 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 Company in connection with the delivery to any holder of a
Note of information required to be delivered to such holder under this
Agreement or requested by such holder (other than a holder that is a party to
this Agreement or its nominee), such holder will enter into an agreement with
the Company embodying the provisions of this Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and
such Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon
receipt of such notice, wherever the word "you" is used in this Agreement
(other than in this Section 21), such word shall be deemed to refer to such
Affiliate in lieu of you. In the event that such Affiliate is so substituted
as a purchaser hereunder and such Affiliate thereafter transfers to you all
of the Notes then held by such Affiliate, upon receipt by the Company of
notice of such transfer, wherever the word "you" is used in this Agreement
(other than in this Section 21), such word shall no longer be deemed to refer
to such Affiliate, but shall refer to you, and you shall have all the rights
of an original holder of the Notes under this Agreement.
22. MISCELLANEOUS.
22.1. SUCCESSORS AND ASSIGNS.
All covenants and other agreements contained in this Agreement by or
on behalf of any of the parties hereto bind and inure to the benefit of their
respective
39
successors and assigns (including, without limitation, any subsequent holder
of a Note) whether so expressed or not.
22.2. PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-whole Amount or interest
on any Note that is due on a date other than a Business Day shall be made on
the next succeeding Business Day without including the additional days
elapsed in the computation of the interest payable on such next succeeding
Business Day.
22.3. SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall (to the full extent permitted by law) not invalidate
or render unenforceable such provision in any other jurisdiction.
22.4. CONSTRUCTION.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall not (absent
such an express contrary provision) be deemed to excuse compliance with any
other covenant. Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by
such Person.
22.5. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each
of which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
22.6. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of
California 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
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 Company.
Very truly yours,
AMERON INTERNATIONAL CORPORATION
By: _________________________________
Title: ______________________________
By: _________________________________
Title: ______________________________
41
The foregoing is hereby
agreed to as of the
date thereof.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: _________________________________
Title: ______________________________
42
The foregoing is hereby
agreed to as of the
date thereof.
SUNAMERICA LIFE INSURANCE COMPANY
By: _________________________________
Title: ______________________________
42
The foregoing is hereby
agreed to as of the
date thereof.
ANCHOR NATIONAL LIFE INSURANCE COMPANY
By: _________________________________
Title: ______________________________
42
The foregoing is hereby
agreed to as of the
date thereof.
FORD LIFE INSURANCE COMPANY
By: _________________________________
Title: ______________________________
42
The foregoing is hereby
agreed to as of the
date thereof.
FIRST SUNAMERICA LIFE INSURANCE COMPANY
By: _________________________________
Title: ______________________________
42
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
Aggregate Principal Amount Note
Name and Address of Purchaser of Notes to be Purchased Denomination(s)
----------------------------- -------------------------- ---------------
THE PRUDENTIAL INSURANCE $35,000,000 $35,000,000
COMPANY OF AMERICA
(1) All payments on account of Notes held by such purchaser shall be made by
wire transfer of immediately available funds for credit to:
Account No. 000-00-000
Xxxxxx Guaranty Trust Company of New York
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(ABA No.: 021-000-238)
Each such wire transfer shall set forth the name of the Company, a
reference to "7.92% Senior Notes due September 1, 2006, Security No.
!INV5447!", and the due date and application (as among principal,
interest and Yield-Maintenance Amount) of the payment being made.
(2) Address for notices relating to payments:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Gateway Center Three
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Manager, Investment
Operations Group
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
1
Schedule A
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group-Corporate
Four Embarcadero Center
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Managing Director
Telecopy: (000) 000-0000
(4) Recipient of telephonic prepayment notices:
Manager, Investment Structure and Pricing
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(5) Tax Identification No.: 00-0000000
SUNAMERICA LIFE INSURANCE $4,000,000 $4,000,000
COMPANY
(1) All payments on or in respect of the Notes shall be by wire transfer of
Federal or other immediately available funds to:
Bankers Trust Company
ABA# 000-000-000
Account #00-000-000
For further credit to acct. #099530
Ref: Ameron International Corporation
PPN# ,P$ ,I$
2
Schedule A
(2) Address for all notices in respect of payment:
SunAmerica Investments
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attn: Investment Accounting, 36th floor
Telephone: 000-000-0000
Fax: 000-000-0000
(3) Address for all other communications:
SunAmerica Corporate Finance
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-6022
Attn: Xxxx Xxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
(4) Please issue notes in the nominee name
"OKGBD & CO."
Tax ID# 00-0000000
Tax ID# for SunAmerica Life Insurance
Company: 00-0000000
(5) Physical Delivery Instructions:
Bankers Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
4th floor, Window 44
Account #099530
(6) DTC PARTICIPATION
Participation #0903
Agent I.D. # 20903
Institution ID # 26540
Ref: SunAmerica Life Insurance
Company
Account # 099530
3
Schedule A
ANCHOR NATIONAL LIFE INSURANCE $4,000,000 $4,000,000
COMPANY
(1) All payments on or in respect of the Notes shall be by wire transfer of
Federal or other immediately available funds to:
Bankers Trust Company
ABA# 000-000-000
Account# 00-000-000
For further credit to acct. #099527
Ref: Ameron International Corporation
PPN# ,P$ ,I$
(2) Address for all notices in respect of payment:
SunAmerica Investments
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attn: Investment Accounting, 36th floor
Telephone: 000-000-0000
Fax: 000-000-0000
(3) Address for all other communications:
SunAmerica Corporate Finance
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-6022
Attn: Xxxx Xxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
(4) Please issue notes in the nominee name
"OKGBD & CO."
Tax ID# 00-0000000
Tax ID# for Anchor National Life
Insurance Company: 00-0000000
4
Schedule A
(5) Physical Delivery Instructions:
Bankers Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
4th floor, Window 44
Account #099527
(6) DTC Participant #0903
Agent Bank ID # 20903
Institution ID# 26540
Ref: Anchor National/MAIN
Account # 099527
FORD LIFE INSURANCE COMPANY $5,000,000 $5,000,000
(1) All payments on or in respect of the
Notes shall be by wire transfer of Federal
or other immediately available funds to:
Bankers Trust Company
ABA# 000-000-000
Account# 00-000-000
For further credit to acct. #099546
Ref: Ameron International Corporation
PPN# ,P$ ,I$
(2) Address for all notices in respect of
payment:
SunAmerica Investments
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attn: Investment Accounting, 36th floor
Telephone: 000-000-0000
Fax: 000-000-0000
5
Schedule A
(3) Address for all other communications:
SunAmerica Corporate Finance
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-6022
Attn: Xxxx Xxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
(4) Please issue notes in the nominee name
"OKGBD & CO."
Tax ID# 00-0000000
Tax ID# for Ford Life Insurance
Company: 00-0000000
(5) Physical Delivery Instructions:
Bankers Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
4th Floor, Window 44
Account #099546
FIRST SUNAMERICA LIFE INSURANCE COMPANY $2,000,000 $2,000,000
(1) All payments on or in respect of the
Notes shall be by wire transfer of Federal
or other immediately available funds to:
Bankers Trust Company
ABA# 000-000-000
Account# 00-000-000
For further credit to acct. #099537
Ref: Ameron International Corporation
PPN# ,P$ ,I$
6
Schedule A
(2) Address for all notices in respect of
payment:
SunAmerica Investments
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attn: Investment Accounting, 36th floor
Telephone: 000-000-0000
Fax: 000-000-0000
(3) Address for all other communications:
SunAmerica Corporate Finance
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-6022
Attn: Xxxx Xxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
(4) Please issue notes in the nominee name
"OKGBD & CO."
Tax ID# 00-0000000
Tax ID# for First SunAmerica Life
Insurance Company: 00-0000000
(5) Physical Delivery Instructions:
Bankers Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
4th Floor, Window 44
Account #099537
7
Schedule A
SCHEDULE B
DEFINED TERMS
Unless otherwise specified herein or in the Note Purchase Agreement to
which this Schedule B is attached, all accounting terms used herein and in the
Note Purchase Agreement shall be interpreted, and all accounting determinations
hereunder shall be made, in accordance with GAAP. As used in the Note Purchase
Agreement, the following terms have the respective meanings set forth below or
set forth in the Section of the Note Purchase Agreement following such term:
"AFFILIATE" means, at any time, and with respect to any Person, (a)
any other Person (other than a Restricted Subsidiary) 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.
"AFFILIATED COMPANIES" shall mean those Persons listed as "Affiliated
Companies" on Schedule 5.4 to the Note Purchase Agreement.
"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 Los Angeles, California or New York, New York
are required or authorized to be closed.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATIONS" shall mean any rental obligation
which, under GAAP, is or will be required to be capitalized on the books of the
Company or any Restricted Subsidiary, taken at the amount thereof accounted for
as indebtedness (net of interest expense) in accordance with such principles.
"CLOSING" is defined in Section 3.
1
Schedule B
"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 Ameron International Corporation, a Delaware
corporation.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
"CONSOLIDATED CURRENT DEBT" means, without duplication, (a) any
obligation for borrowed money and any notes payable and drafts accepted
representing extensions of credit (other than trade and taxes payables) payable
on demand or within a period of one year from the date of the creation thereof
(including seasonal lines of credit, but excluding revolving lines of credit
with maturities in excess of one year or with options to renew final maturities
more than one year beyond the date of creation, which debt shall be treated as
Funded Debt) of the Company and its Restricted Subsidiaries, (b) Off-Balance
Sheet Current Debt, (c) any Guaranty of the Company or any Restricted Subsidiary
with respect to liabilities of a type described in clauses (a) or (b) above and
(d) all modifications, renewals and extensions of the foregoing that do not
extend the final, non-renewable maturity of such indebtedness beyond one year
from the date of creation, all on a consolidated basis.
"CONSOLIDATED FUNDED DEBT" means, without duplication, (a) any
obligation of the Company or any Restricted Subsidiary (including the Notes and
other obligations evidenced by notes, bonds, debentures or similar written
instruments) payable more than one year from the date of creation thereof (or
which is renewable or extendable at the option of the obligor for a period of
more than one year from the date of creation), (b) all indebtedness of the
Company or any Restricted Subsidiary having a maturity of less than one year,
PROVIDED that such indebtedness is incurred pursuant to revolving credit
arrangements or other financing commitments with a final, non-extendable
maturity more than one year from the date of creation thereof, (c) Capitalized
Lease Obligations of the Company or any Restricted Subsidiary, (d) Off-Balance
Sheet Funded Debt, (e) obligations secured by a Lien on, or payable out of the
proceeds of production from, property of the Company or any Restricted
Subsidiary whether or not such obligation shall be assumed by the Company or
such Restricted Subsidiary, (f) any Guaranty of the Company or any Restricted
Subsidiary with respect to liabilities of a type described in clauses (a), (b),
(c), (d) or (e) above, and (g) all renewals and extensions of any of the
foregoing, all on a consolidated basis.
"CONSOLIDATED NET EARNINGS" shall mean consolidated gross revenues of
the Company and its Restricted Subsidiaries less all costs, rebates, returns,
allowances, adjustments, discounts, expenses and other proper charges (including
current and deferred taxes on income, provisions for taxes on unremitted foreign
earnings that are included in gross revenues and current additions to reserves),
determined in accordance with GAAP. Consolidated Net Earnings shall not include
(a) extraordinary gains or losses, (b) gains or losses resulting from the sale
or other disposition of capital assets (other than vehicles and office equipment
and other equipment sold in the normal course of businesses); (c)
2
Schedule B
undistributed earnings of any Person (including any Affiliated Company) which
is not a Restricted Subsidiary; (d) gains or losses arising from changes in
accounting principles; (e) gains or loses arising from the write-up or
write-down of assets; (f) any undistributed earnings of any Restricted
Subsidiary, to the extent that the declaration or payment of dividends or
other share distributions, share repurchases or redemptions or repayment of
intracompany loans or advances by such Restricted Subsidiary is restricted by
charter document, agreement, law or otherwise; (g) any gain from the
collection of proceeds from insurance policies; (h) any gain from the
acquisition of securities or the retirement or extinguishment of Debt and (i)
any gains, losses or undistributed earnings of any Unrestricted Subsidiary.
"CONSOLIDATED TANGIBLE ASSETS" shall mean the net book value of all
assets of the Company and its Restricted Subsidiaries on a consolidated basis,
net of (a) the net book value of all Intangibles; (b) all reserves relating to
such assets; and (c) any write-up in the carrying values of such assets, all
determined in accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean all items that in
accordance with GAAP would be included in the stockholders' or shareholders'
equity portion of the consolidated balance sheet of the Company and its
Restricted Subsidiaries, including capital stock of any class (net of treasury
stock), capital surplus and retained earnings, less (a) the net book value of
all Intangibles and (b) minority interests.
"CURRENT DEBT", as to any Person, has the same meaning as Consolidated
Current Debt (treating such Person as the Company).
"DEBT" means Consolidated Current Debt and Consolidated Funded Debt.
"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 Xxxxxx Xxxxxxxx Trust Company of New York, as its "base" or "prime" rate.
"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.
"ENVIRONMENTAL LIABILITIES AND COSTS" means, as to any Person, all
liabilities, obligations, responsibilities, remedial actions, losses, damages,
punitive damages, consequential damages, treble damages, contribution, cost
recovery, costs and expenses
3
Schedule B
(including all fees, disbursements and expenses of counsel, expert and
consulting fees, and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute, permit, order or
agreement with any Federal, state or local governmental authority or other
Person, arising from environmental, health or safety conditions, or the
release or threatened release of any contaminant, pollutant or Hazardous
Materials into the environment, resulting from the operations of such person
or its subsidiaries, or breach of any Environmental Laws or for which such
Person or its subsidiaries is otherwise liable or responsible.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the 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.
"FUNDED DEBT", as to any Person, has the same meaning as "Consolidated
Funded Debt" (treating such Person as the Company).
"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
4
Schedule B
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 balanc e sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any 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.
"INCLUDING" means, unless the context clearly requires otherwise,
"including, without limitation."
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note or
any Affiliate thereof, (b) any holder of a Note holding more than 5% of the
aggregate principal amount of the Notes then outstanding, and (c) any bank,
trust company, savings and loan association or other financial institution, any
pension plan, any investment company, any insurance company, any broker or
dealer, or any other similar financial institution or entity, regardless of
legal form.
5
Schedule B
"INTANGIBLES" means any Intellectual Properties (including any
amounts, however designated, representing the cost of acquisition of business
and investments in excess of the book value thereof), unamortized debt discount
and expense, deferred research and development costs, any write-up of asset
value after November 30, 1995 and any other assets treated as intangible assets
under GAAP.
"INTELLECTUAL PROPERTIES" means any material patents, patent
applications, copyrights, copyright applications, trade secrets, trade names and
trademarks, technologies, methods, processes or other proprietary properties or
information.
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"MAKE-WHOLE AMOUNT" is defined in Section 8.6.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Restricted Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries taken as a whole, or (b) the ability of
the Company to perform its obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement or the Notes.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"NOTES" is defined in Section 1.
"OFF-BALANCE SHEET CURRENT DEBT" means all Current Debt of any
partnership or joint venture of which the Company or any Subsidiary is a general
partner or joint venturer, recourse with respect to which may be had against the
Company or any Restricted Subsidiary or any of their respective assets.
"OFF-BALANCE SHEET FUNDED DEBT" means all Funded Debt of any
partnership or joint venture of which the Company or any Subsidiary is a general
partner or joint venturer, recourse with respect to which may be had against the
Company or any Restricted Subsidiary or any of their respective assets.
6
Schedule 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 AGREEMENTS" is defined in Section 2.
"OTHER PURCHASERS" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, xxxxxx
or inchoate.
"PROPERTY" means all real property owned or leased by the Company or
any of its Restricted Subsidiaries and all personal property located thereon.
"QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"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 the Company, any Restricted Subsidiary or any of their 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.
"RESTRICTED LEASE" means any lease for real property other than a
Capitalized Lease Obligation with an initial lease term (as defined under GAAP)
(or a term that is extendable or renewable at either party's option for a total
lease term) of three years or more from the date of creation thereof.
7
Schedule B
"RESTRICTED SUBSIDIARY" means, at any time, any Subsidiary of the
Company which is not then designated an Unrestricted Subsidiary by the Board of
Directors of the Company.
"S&P" means Standard & Poors Ratings Group, a division of McGraw Hill,
Inc. and any successor thereto.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.
"SENIOR FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
"SHAREHOLDER" shall mean any record or beneficial holder of 5% or more
of any class of the Company's capital stock. For purposes of making this
computation, all warrants, rights, options, convertible securities and other
rights to purchase or acquire a class of Company capital stock shall be deemed
to be exercised.
"SIGNIFICANT SUBSIDIARY" shall mean any Subsidiary with total assets
(a) with a net book value in excess of 20% of Consolidated Tangible Assets as at
the end of the immediately preceding fiscal quarter or (b) that generated in
excess of 20% of Consolidated Net Earnings before interest and income taxes for
any of the three most recently ended fiscal years.
"SUBSIDIARY" means, as to any Person, any corporation more than 50% of
the total combined voting power of all classes of Voting Stock of which is, at
the time as of which any determination is being made, owned by such Person
either directly or through such Person's Subsidiaries. Unless the context
otherwise clearly requires, any reference to a "Subsidiary" is a reference to a
Subsidiary of the Company.
"TANGIBLE GROSS WORTH" means, as of any date of determination, (a) the
total amount of shareholders' equity of the Company PLUS (b) Total Debt MINUS
(c) the net book value of any Intangibles that are booked subsequent to the date
of the Closing other than in connection with the acquisition by the Company of
the assets of Xxxxx Coatings from Grow Group Incorporated and Gliden Company
pursuant to a Master Purchase Agreement dated as of August 7, 1996.
"TOTAL DEBT" means the total of all Debt of the Company and its
Restricted Subsidiaries; PROVIDED, that any Debt owing by the Company to a
Restricted Subsidiary shall be included in Total Debt unless such Debt is
subordinated to the Notes pursuant to a Subordination Agreement in the form of
Exhibit 5 attached hereto.
"UNRESTRICTED SUBSIDIARY" shall mean each Subsidiary of the Company
which is so designated by the Board of Directors of the Company; PROVIDED,
HOWEVER, that no such designation shall be effective unless (a) at the time of
such designation, such Subsidiary does
8
Schedule B
not own any shares of capital stock or Debt of the Company or any other
Restricted Subsidiary which is not simultaneously being designated an
Unrestricted Subsidiary, (b) immediately after giving effect to such
designation, and after deducting from all covenant calculations made in
respect of the immediately preceding four fiscal quarters the assets,
liabilities, revenues and costs attributable to such Subsidiary (i) no
Default or Event of Default would either occur and be continuing or would
have occurred at any time during the immediately preceding four fiscal
quarters; (ii) the Company would be permitted to make the investment in such
Subsidiary resulting from such designation in compliance with Section
10.5(g); and (iii) such designation is treated at the time of designation and
at all times thereafter as a sale of assets for purposes of Section 10.2 and
the Company would be permitted to make such asset sale in compliance with
such Section. Any Subsidiary which has been designated as an Unrestricted
Subsidiary pursuant to the preceding sentence may, at any time thereafter, be
redesignated as a Restricted Subsidiary by resolution of the Board of
Directors of the Company (a certified copy of which shall promptly be
delivered to each holder of the Notes) if, immediately after giving effect to
such redesignation and all other simultaneous designations and
redesignations, if any, of other Subsidiaries pursuant to this definition, no
Default or Event of Default shall exist. Any Subsidiary which has been
redesignated as a Restricted Subsidiary as provided in the preceding sentence
of this definition may not thereafter be designated or redesignated as an
Unrestricted Subsidiary.
"VOTING STOCK" means, with respect to any corporation, any shares of
stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
9
Schedule B
EXHIBIT 1
[FORM OF 7.92% SENIOR NOTE DUE 2006]
AMERON INTERNATIONAL CORPORATION
7.92% SENIOR NOTE DUE SEPTEMBER 1, 2006
No. [_____] [Date]
$[_______] PPN[_______
_______]
FOR VALUE RECEIVED, the undersigned, AMERON INTERNATIONAL CORPORATION
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Delaware, hereby promises to pay to [_______________],
or registered assigns, the principal sum of [_______________] DOLLARS on
September 1, 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 7.92%
per annum from the date hereof, payable semiannually, on the 1st day of
September and March in each year, commencing with March 1, 1997, until the
principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreements referred to
below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 9.92% or (ii) 2% over the rate of interest
publicly announced by Xxxxxx Guaranty Trust Company of New York from time to
time in New York, New York as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America in the State of California at the principal office of the Company in
such jurisdiction or at such other place as the Company shall have designated by
written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
August 28, 1996 (as from time to time amended, the "Note Purchase Agreements"),
between the Company and the respective Purchasers named therein and is entitled
to the benefits thereof. Each holder of this Note will be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreements and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note
Purchase Agreements, upon surrender of this Note for registration of
transfer, duly endorsed, or
1
Exhibit 1
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.
The Company will make required prepayments of principal on the
dates and in the amounts specified in the Note Purchase Agreements. This
Note is also subject to optional prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreements.
This Note shall be construed and enforced in accordance with the
law of the State of California 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.
AMERON INTERNATIONAL CORPORATION
By: _________________________
Title: _____________________
By: _________________________
Title: _____________________
2
Exhibit 1
EXHIBIT 4.4(a)
FORM OF OPINION OF COUNSEL
TO THE COMPANY
1. The Company has been duly incorporated and is validly existing in
good standing under the laws of the State of Delaware and is duly licensed or
qualified and is in good standing as a foreign corporation in each jurisdiction
in which the character of the properties owned or leased by it or the nature of
the business transacted by it makes such licensing or qualification necessary.
2. Each Restricted Subsidiary has been duly incorporated and is
validly existing in good standing under the laws of its jurisdiction of
incorporation and is duly licensed or qualified and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
the nature of the business transacted by it makes such licensing or
qualification necessary.
3. The Company has the corporate power to execute and deliver the
Note Purchase Agreements, to issue and sell the Notes and to perform its
obligations set forth in each of the Note Purchase Agreements and the Notes.
4. The execution, delivery and performance of each of the Note
Purchase Agreements and the Notes have been duly authorized by all necessary
corporate action on the part of the Company, and each of the Note Purchase
Agreements and the Notes has been duly executed and delivered by the Company.
5. The Note Purchase Agreements and the Notes constitute the legally
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally (including, without limitation, fraudulent
conveyance laws) and by general principles of equity including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law.
6. The Company's execution and delivery of, and performance of its
obligations under the Note Purchase Agreements and the Notes do not and will not
(i) violate the Company's Certificate of Incorporation or Bylaws, (ii) violate,
breach or result in a default under any existing obligation of or restriction on
the Company under any other agreement, instrument or indenture, (iii) breach or
otherwise violate any existing obligation of or restriction on the Company under
any order, judgment or decree of any California or federal court or governmental
authority binding on the Company, or (iv) violate any California or federal
statute or any provision of the Delaware General Corporation Law.
1
Exhibit 4.4(a)
7. No order, consent, permit or approval of any California or
federal governmental authority is required on the part of the Company to issue
and sell the Notes or for the execution and delivery of, and performance of its
obligations under, the Note Purchase Agreements.
8. There is no action, suit or proceeding pending against or
threatened against or affecting the Company or any Restricted Subsidiary before
any court, governmental or regulatory authority or arbitrator, which if
adversely determined would question, either individually or collectively, the
validity of the Note Purchase Agreements or the Notes, or any of the
transactions contemplated thereby.
9. Assuming the accuracy of (i) the Company's representations in the
first sentence of Section 5.13 of the Note Purchase Agreements and (ii) your
representations in Section 6.1 of the Note Purchase Agreements, it is not
necessary in connection with the execution and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements to register the Notes
under the Securities Act of 1933, as amended, or to qualify an indenture in
respect thereof under the Trust Indenture Act of 1939, as amended.
10. Neither the extension of credit nor the use of proceeds provided
in the Note Purchase Agreements will violate Regulations G, T or X of the Board
of Governors of the Federal Reserve System.
11. The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
2
Exhibit 4.4(a)
EXHIBIT 4.4(b)
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
1. The Company has been duly incorporated and is validly existing in
good standing under the laws of the State of Delaware.
2. The Company has the corporate power to execute and deliver the
Note Purchase Agreements, to issue and sell the Notes and to perform its
obligations set forth in each of the Note Purchase Agreements and the Notes.
3. The execution, delivery and performance of each of the Note
Purchase Agreements and the Notes have been duly authorized by all necessary
corporate action on the part of the Company, and each of the Note Purchase
Agreements and the Notes has been duly executed and delivered by the Company.
4. The Note Purchase Agreements and the Notes constitute the legally
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally (including, without limitation, fraudulent
conveyance laws) and by general principles of equity including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law.
5. Assuming the accuracy of (i) the Company's representations in the
first sentence of Section 5.13 of the Note Purchase Agreements and (ii) your
representations in Section 6.1 of the Note Purchase Agreements, it is not
necessary in connection with the execution and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements to register the Notes
under the Securities Act of 1933, as amended, or to qualify an indenture in
respect thereof under the Trust Indenture Act of 1939, as amended.
6. Neither the extension of credit nor the use of proceeds provided
in the Note Purchase Agreements will violate Regulations G, T or X of the Board
of Governors of the Federal Reserve System.
7. The opinion of [ ], counsel for the Company, is
satisfactory in scope and form to us, and we believe you are justified in
relying on such opinion.
1
EXHIBIT 5
FORM OF SUBORDINATION AGREEMENT
SUBORDINATION AGREEMENT
SUBORDINATION AGREEMENT ("AGREEMENT") dated , made by AMERON
INTERNATIONAL CORPORATION, a Delaware corporation (the "COMPANY"), AND [NAME OF
RESTRICTED SUBSIDIARY OF COMPANY], a corporation (the
"SUBORDINATED CREDITOR"), in favor of each of the Holders, as defined below.
RECITALS
A. Certain financial institutions (the "PURCHASERS") have entered
into separate Note Purchase Agreements dated August 28, 1996 with the Company
(as they may from time to time hereafter be amended or modified, collectively,
the "NOTE PURCHASE AGREEMENTS"). The Purchasers, together with their assigns,
transferees and successors, are collectively referred to herein as the
"HOLDERS". Capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in the Note Purchase Agreements.
B. The Company may from time to time become indebted to the
Subordinated Creditor in the ordinary course of its business. All indebtedness
and other obligations of the Company to the Subordinated Creditor now or
hereafter existing, interest thereon and any fees, expenses and other amounts
payable are hereinafter referred to as the "SUBORDINATED DEBT".
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. AGREEMENT TO SUBORDINATE.
The Subordinated Creditor, for itself and its successors and assigns,
hereby agrees and covenants that, to the extent set forth herein and on the
terms and conditions set forth herein, the Subordinated Debt is and shall be
subordinate in right of payment to the prior indefeasible payment in full in
cash of all obligations of the Company now or hereafter existing under the Note
Purchase Agreements and the Notes, whether for principal, interest, Make-Whole
Amount, fees, expenses or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of
1
Exhibit 5
the Bankruptcy Code, 11 U.S.C. Section 362(a)) (all such obligations being,
collectively, the "OBLIGATIONS").
Section 2. INSOLVENCY.
(a) Upon any payment or distribution of assets of the Company or the
estate created by the commencement of any Insolvency Proceeding (defined below),
of any kind or character, whether in cash, securities or other property, the
Holders shall first be entitled to receive payment in full of all Obligations in
cash before the Subordinated Creditor shall be entitled to receive any payment
or distribution on account of the Subordinated Debt. "INSOLVENCY PROCEEDING"
means any dissolution, winding up, liquidation, arrangement, reorganization,
adjustment, protection, relief or composition of the Company or its debts,
whether voluntary or involuntary, in any bankruptcy, insolvency, arrangement,
reorganization, receivership, relief or other similar case or proceeding under
any federal or state bankruptcy or similar law or upon an assignment for the
benefit of creditors, any other marshaling of the assets and liabilities of the
Company or otherwise.
(b) Upon the occurrence of any Insolvency Proceeding, any payment or
distribution of assets or securities of the Company of any kind or character,
whether in cash, property or securities to which the Subordinated Creditor would
be entitled, shall be made by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, directly to the Holders for application to the payment in full in
cash of all Obligations after giving effect to any concurrent payment or
distribution to the Holders.
Section 3. PAYMENT OF SUBORDINATED DEBT.
Nothing in this Agreement is intended to or shall impair, as between
the Company and the Subordinated Creditor, the obligation of the Company, which
is absolute and unconditional, to pay all principal, interest and other amounts
payable with respect to the Subordinated Debt.
Section 4. PROHIBITED PAYMENTS.
The Company agrees that it will not make any payment of any of the
Subordinated Debt, or take any other action, in contravention of the provisions
of this Agreement. All payments or distributions upon or with respect to the
Subordinated Debt which are received by the Subordinated Creditor contrary to
the provisions of this Agreement shall be received in trust for the benefit of
the Holders, shall be segregated from other funds and property held by the
Subordinated Creditor and shall be forthwith paid over to the Holders in the
same form as so received (with any necessary endorsement) to be applied (in the
case of cash) to, or held as collateral (in the case of non-cash property or
2
Exhibit 5
securities) for, the payment or prepayment of the Obligations in accordance with
the terms of the Note Purchase Agreements.
Section 5. AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement, and no
consent to any departure by the Subordinated Creditor or the Company herefrom
shall in any event be effective unless the same shall be in writing and signed
by the Required Holders, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 6. EXPENSES.
The Subordinated Creditor and the Company jointly and severally agree
upon demand to pay to the Holders the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts or
agents, which any Holder may incur in connection with the exercise or
enforcement of any of the rights of the Holders hereunder or the failure by the
Subordinated Creditor or the Company to perform or observe any of the provisions
hereof.
Section 7. ADDRESSES FOR NOTICES.
All notices and other communications provided for hereunder shall be
in writing (including telecopier) and mailed, telecopied or delivered, (i) if to
the Subordinated Creditor, to such Subordinated Creditor c/o the Company at its
address specified in the Note Purchase Agreements; and (ii) if to the Company or
any Holder, at their respective addresses specified in the Note Purchase
Agreements, or as to each party, at such other address as shall be designated by
such party in a written notice to each other party. All such notices and other
communications shall, when mailed, be effective when deposited in the mails,
when telecopied, be effective when sent and electronic confirmation of receipt
received, or when delivered, respectively.
Section 8. NO WAIVER; REMEDIES.
No failure on the part of any Holder to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof. No single or
partial exercise of any right hereunder shall preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 9. CONTINUING AGREEMENT; ASSIGNMENTS UNDER THE NOTE PURCHASE
AGREEMENT.
This Agreement is a continuing agreement and shall (i) remain in full
force and effect until the payment in full of the Obligations, (ii) be binding
upon the Subordinated
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Exhibit 5
Creditor, the Company and their respective successors and assigns, and (iii)
inure to the benefit of, and be enforceable by the Holders and their
respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (iii), any Holder may assign or otherwise
transfer all or any portion of its rights and obligations under the
applicable Note Purchase Agreement (including, without limitation, all or any
portion of any Note held by it) to any other person or entity, and such other
person or entity shall thereupon become vested with all rights in respect
thereof granted to such Holder herein or otherwise, subject.
Section 10. GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California excluding choice-of-law principles of the
law of such State that would require the application of the laws of a
jurisdiction other than such State.
Section 11. WAIVER OF JURY TRIAL.
Each party hereto, and each of the Holders by their acceptance of the
benefits hereof, irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Agreement or the transactions contemplated
hereby.
[remainder of page is intentionally blank]
4
Exhibit 5
IN WITNESS WHEREOF, the Subordinated Creditor and the Company each has
caused this Agreement to be duly executed and delivered by its officer thereunto
duly authorized as of the date first above written.
[NAME OF RESTRICTED SUBSIDIARY]
By:
--------------------------
Name:
------------------------
Title:
-----------------------
AMERON INTERNATIONAL CORPORATION
By:
--------------------------
Name:
------------------------
Title:
-----------------------
By:
--------------------------
Name:
------------------------
Title:
-----------------------
5
Exhibit 5
