================================================================================
QUANTA SERVICES, INC.
$73,000,000 8.46% Series 2000-A Senior Secured Notes, Tranche 1,
due March 1, 2005
and
$41,500,000 8.55% Series 2000-A Senior Secured Notes, Tranche 2,
due March 1, 2007
and
$35,500,000 8.61% Series 2000-A Senior Secured Notes, Tranche 3,
due March 1, 2010
----------------
NOTE PURCHASE AGREEMENT
----------------
DATED AS OF MARCH 1, 2000
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TABLE OF CONTENTS
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SECTION HEADING PAGE
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SECTION 1. AUTHORIZATION OF NOTES.................................................................1
SECTION 2. SALE AND PURCHASE OF NOTES.............................................................2
Section 2.1. Series 2000-A Notes....................................................................2
Section 2.2. Guaranty Agreement.....................................................................2
Section 2.3. Security for the Notes.................................................................2
Section 2.4. Additional Series of Notes.............................................................3
SECTION 3. CLOSING................................................................................4
SECTION 4. CONDITIONS TO CLOSING..................................................................4
Section 4.1. Representations and Warranties.........................................................4
Section 4.2. Representations and Warranties.........................................................4
Section 4.3. Performance; No Default................................................................4
Section 4.4. Compliance Certificates................................................................5
Section 4.5. Guaranty Agreement.....................................................................5
Section 4.6. Security Documents, Etc................................................................5
Section 4.7. Filing.................................................................................5
Section 4.8. Intercreditor Agreement................................................................5
Section 4.9. Insurance..............................................................................6
Section 4.10. Pledged Stock..........................................................................6
Section 4.11. Opinions of Counsel....................................................................6
Section 4.12. Purchase Permitted by Applicable Law, Etc..............................................6
Section 4.13. Related Transactions...................................................................6
Section 4.14. Payment of Special Counsel Fees........................................................6
Section 4.15. Private Placement Number...............................................................6
Section 4.16. Changes in Corporate Structure.........................................................7
Section 4.17. Proceedings and Documents..............................................................7
Section 4.18. Conditions to Issuance of Additional Notes.............................................7
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................7
Section 5.1. Organization; Power and Authority......................................................7
Section 5.2. Authorization, Etc.....................................................................8
Section 5.3. Disclosure.............................................................................8
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.......................8
Section 5.5. Financial Statements...................................................................9
Section 5.6. Compliance with Laws, Other Instruments, Etc...........................................9
Section 5.7. Governmental Authorizations, Etc......................................................10
Section 5.8. Litigation; Observance of Statutes and Orders.........................................10
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Section 5.9. Taxes.................................................................................10
Section 5.10. Title to Property; Leases.............................................................10
Section 5.11. Licenses, Permits, Etc................................................................11
Section 5.12. Compliance with ERISA.................................................................11
Section 5.13. Private Offering by the Company.......................................................12
Section 5.14. Use of Proceeds; Margin Regulations...................................................12
Section 5.15. Existing Debt; Future Liens...........................................................12
Section 5.16. Foreign Assets Control Regulations, Etc...............................................13
Section 5.17. Status under Certain Statutes.........................................................13
Section 5.18. Environmental Matters.................................................................13
Section 5.19. Filing and Recordation................................................................14
Section 5.20. Other Representations and Warranties..................................................14
SECTION 6. REPRESENTATIONS OF THE PURCHASER......................................................14
Section 6.1. Purchase for Investment...............................................................14
Section 6.2. Source of Funds.......................................................................14
Section 6.3. Disclosure of Information.............................................................16
Section 6.4. Investment Experience.................................................................16
Section 6.5. Accredited Investor...................................................................16
SECTION 7. INFORMATION AS TO COMPANY.............................................................16
Section 7.1. Financial and Business Information....................................................16
Section 7.2. Officer's Certificate.................................................................18
Section 7.3. Inspection............................................................................19
SECTION 8. PREPAYMENT OF THE NOTES...............................................................20
Section 8.1. Required Prepayments..................................................................20
Section 8.2. Optional Prepayments with Make-Whole Amount...........................................20
Section 8.3. Allocation of Partial Prepayments.....................................................20
Section 8.4. Maturity; Surrender, Etc..............................................................20
Section 8.5. Purchase of Notes.....................................................................21
Section 8.6. Make-Whole Amount for Series 2000-A Notes.............................................21
Section 8.7. Change in Control.....................................................................22
SECTION 9. AFFIRMATIVE COVENANTS.................................................................24
Section 9.1. Compliance with Law...................................................................24
Section 9.2. Insurance.............................................................................24
Section 9.3. Maintenance of Properties.............................................................25
Section 9.4. Payment of Taxes and Claims...........................................................25
Section 9.5. Corporate Existence, Etc..............................................................25
Section 9.6. Guaranty by Subsidiaries..............................................................25
SECTION 10. NEGATIVE COVENANTS....................................................................26
Section 10.1. Consolidated Net Worth................................................................26
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Section 10.2. Limitation on Consolidated Debt.......................................................26
Section 10.3. Limitation on Priority Debt...........................................................26
Section 10.4. Interest Charges Coverage Ratio.......................................................26
Section 10.5. Limitation on Liens...................................................................26
Section 10.6. Merger, Consolidation.................................................................28
Section 10.7. Sales of Assets.......................................................................29
Section 10.8. Nature of Business....................................................................29
Section 10.9. Transactions with Affiliates..........................................................29
Section 10.10. Further Assurances....................................................................30
SECTION 11. EVENTS OF DEFAULT.....................................................................30
SECTION 12. REMEDIES ON DEFAULT, ETC..............................................................32
Section 12.1. Acceleration..........................................................................32
Section 12.2. Other Remedies........................................................................33
Section 12.3. Rescission............................................................................33
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc.....................................34
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.........................................34
Section 13.1. Registration of Notes.................................................................34
Section 13.2. Transfer and Exchange of Notes........................................................34
Section 13.3. Replacement of Notes..................................................................35
SECTION 14. PAYMENTS ON NOTES.....................................................................35
Section 14.1. Place of Payment......................................................................35
Section 14.2. Home Office Payment...................................................................35
SECTION 15. EXPENSES, ETC.........................................................................36
Section 15.1. Transaction Expenses..................................................................36
Section 15.2. Survival..............................................................................36
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..........................36
SECTION 17. AMENDMENT AND WAIVER..................................................................37
Section 17.1. Requirements..........................................................................37
Section 17.2. Solicitation of Holders of Notes......................................................37
Section 17.3. Binding Effect, Etc...................................................................38
Section 17.4. Notes Held by Company, Etc............................................................38
SECTION 18. NOTICES...............................................................................38
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SECTION 19. REPRODUCTION OF DOCUMENTS.............................................................39
SECTION 20. CONFIDENTIAL INFORMATION..............................................................39
SECTION 21. SUBSTITUTION OF PURCHASER.............................................................40
SECTION 22. MISCELLANEOUS.........................................................................41
Section 22.1. Successors and Assigns................................................................41
Section 22.2. Payments Due on Non-Business Days.....................................................41
Section 22.3. Severability..........................................................................41
Section 22.4. Construction..........................................................................41
Section 22.5. Counterparts..........................................................................41
Section 22.6. Governing Law.........................................................................41
Section 22.7. Legal Rate of Interest................................................................41
Section 22.8. Submission to Process.................................................................42
Section 22.9. Waivers by the Company................................................................43
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SCHEDULE A -- INFORMATION RELATING TO PURCHASERS
SCHEDULE B -- DEFINED TERMS
SCHEDULE 4.16 -- Changes in Corporate Structure
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.11 -- Licenses, Permits, Etc.
SCHEDULE 5.15 -- Existing Debt
SCHEDULE 10.5 -- Existing Liens
EXHIBIT 1(a) -- Form of 8.46% Series 2000-A Senior Secured Note, Tranche 1, due March 1, 2005
EXHIBIT 1(b) -- Form of 8.55% Series 2000-A Senior Secured Note, Tranche 2, Due March 1, 2007
EXHIBIT 1(c) -- Form of 8.61% Series 2000-A Senior Secured Note, Tranche 3, Due March 1, 2010
EXHIBIT 2 -- Form of Guaranty Agreement
EXHIBIT 3 -- Form of Intercreditor Agreement
EXHIBIT 4.11(a) -- Form of Opinion of General Counsel for the Company
EXHIBIT 4.11(b) -- Form of Opinion of Special Counsel for the Company
EXHIBIT 4.11(c) -- Form of Opinion of Special Counsel for the Purchasers
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QUANTA SERVICES, INC.
1360 POST OAK BOULEVARD, SUITE 2100
HOUSTON, TEXAS 77056-3023
8.46% SERIES 2000-A SENIOR SECURED NOTES, TRANCHE 1, DUE MARCH 1, 2005
AND
8.55% SERIES 2000-A SENIOR SECURED NOTES, TRANCHE 2, DUE MARCH 1, 2007
AND
8.61% SERIES 2000-A SENIOR SECURED NOTES, TRANCHE 3, DUE MARCH 1, 2010
Dated as of
March 1, 2000
TO THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
QUANTA SERVICES, INC., a Delaware corporation (the "Company"), agrees
with the Purchasers listed in the attached Schedule A (the "Purchasers") to this
Note Purchase Agreement (this "Agreement") as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of (i) $73,000,000
aggregate principal amount of its 8.46% Series 2000-A Senior Secured Notes,
Tranche 1, due March 1, 2005 (the "Tranche 1 Notes"), (ii) $41,500,000 aggregate
principal amount of its 8.55% Series 2000-A Senior Secured Notes, Tranche 2, due
March 1, 2007 (the "Tranche 2 Notes"), and (iii) $35,500,000 aggregate principal
amount of its 8.61% Series 2000-A Senior Secured Notes, Tranche 3, due March 1,
2010 (the "Tranche 3 Notes"; the Tranche 1 Notes, the Tranche 2 Notes and the
Tranche 3 Notes are collectively referred to herein as the "Series 2000-A
Notes"). The Series 2000-A Notes together with each Series of Additional Notes
which may from time to time be issued pursuant to the provisions of Section 2.4
are collectively referred to as the "Notes" (such term shall also include any
such notes issued in substitution therefor pursuant to Section 13 of this
Agreement). The Series 2000-A Notes shall be substantially in the forms set out
in Exhibit 1(a), Exhibit 1(b) and Exhibit 1(c), respectively, with such changes
therefrom, if any, as may be approved by the Purchasers and the Company. Certain
capitalized terms used in this Agreement are defined in Schedule B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
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SECTION 2. SALE AND PURCHASE OF NOTES.
Section 2.1. Series 2000-A Notes. Subject to the terms and conditions
of this Agreement, the Company will issue and sell to each Purchaser and each
Purchaser will purchase from the Company, at the Closing provided for in Section
3, Series 2000-A Notes in the principal amount specified opposite such
Purchaser's name in Schedule A at the purchase price of 100% of the principal
amount thereof. The obligations of each Purchaser hereunder are several and not
joint obligations and each Purchaser shall have no obligation and no liability
to any Person for the performance or nonperformance by any other Purchaser
hereunder.
Section 2.2. Guaranty Agreement. The payment by the Company of all
amounts due with respect to the Notes and the performance by the Company of its
obligations under this Agreement will be unconditionally guaranteed by all
Domestic Subsidiaries of the Company (the "Guarantors") under the Guaranty
Agreement dated as of March 1, 2000 (the "Guaranty Agreement") which shall be in
substantially the form attached hereto as Exhibit 2.
If at any time one or more Subsidiaries which has guaranteed the Notes
and the Debt outstanding under the Bank Credit Agreement shall have been
released from its obligations under the Guaranty relating to the Bank Credit
Agreement, then upon delivery to the holders of the Notes of evidence of such
release (which evidence shall be reasonably satisfactory to the Required
Holders) and provided that no Default or Event of Default shall exist, the
Required Holders shall execute and deliver a release of such Subsidiary from its
obligations under the Guaranty Agreement (referred to as a "Guaranty Release
Event").
Section 2.3. Security for the Notes. The Notes will be secured by
certain property of the Company and the Guarantors pursuant to the Security
Documents heretofore entered into by the Company and the Guarantors with Bank of
America, N.A. as collateral agent (together with any successor collateral agent,
the "Collateral Agent") for the benefit of the holders of Notes and the Bank
Lenders.
The Lien and security interest granted by the Company and the
Guarantors pursuant to the Security Documents shall rank pari passu with other
existing Liens that secure the outstanding Debt of the Company and the
Guarantors under the Bank Credit Agreement without preference, priority or
distinction by virtue of the time of filing any financing statement or
registration or the difference in time of incurrence of such Debt, and the
enforcement of the rights and benefits in respect of such Security Documents
will be subject to an Intercreditor Agreement dated as of March 1, 2000 (the
"Intercreditor Agreement") among the Collateral Agent, for itself and as agent
on behalf of all Bank Lenders, the Purchasers and the Additional Purchasers.
If at any time the Collateral Agent shall have received the written
direction from the requisite percentage of Bank Lenders to release the Liens of
the Security Documents which secure the Debt outstanding under the Bank Credit
Agreement, then upon delivery to the holders of the Notes of evidence of such
direction (which evidence shall be reasonably satisfactory to the Required
Holders) and provided that no Default or Event of Default shall exist, the
Collateral Agent shall release the Liens created by the Security Documents
(herein referred to as a "Collateral Release Event"). If requested by the
Collateral Agent and so long as no Default or
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Event of Default shall exist, each Purchaser, each Additional Purchaser and each
holder by its acceptance of a Note agrees that it shall concur in the Collateral
Release Event.
Section 2.4. Additional Series of Notes. The Company may, from time to
time, in its sole discretion but subject to the terms hereof, issue and sell one
or more additional Series of its secured promissory notes under the provisions
of this Agreement pursuant to a supplement (a "Supplement") substantially in the
form of Exhibit S. Each additional Series of Notes (the "Additional Notes")
issued pursuant to a Supplement shall be subject to the following terms and
conditions:
(i) each Series of Additional Notes, when so issued, shall be
differentiated from all previous Series by sequential alphabetical
designation inscribed thereon;
(ii) Additional Notes of the same Series may consist of more
than one different and separate tranches and may differ with respect to
outstanding principal amounts, maturity dates, interest rates and
premiums, if any, and price and terms of redemption or payment prior to
maturity, but all such different and separate tranches of the same
Series shall vote as a single class and constitute one Series;
(iii) each Series of Additional Notes shall be dated the date
of issue, bear interest at such rate or rates, mature on such date or
dates, be subject to such mandatory and optional prepayment on the
dates and at the premiums, if any, have such additional or different
conditions precedent to closing, such representations and warranties
and such additional covenants as shall be specified in the Supplement
under which such Additional Notes are issued and upon execution of any
such Supplement, this Agreement shall be amended (a) to reflect such
additional covenants without further action on the part of the holders
of the Notes outstanding under this Agreement, provided, that any such
additional covenants shall inure to the benefit of all holders of Notes
so long as any Additional Notes issued pursuant to such Supplement
remain outstanding, and (b) to reflect such representations and
warranties as are contained in such Supplement for the benefit of the
holders of such Additional Notes in accordance with the provisions of
Section 16;
(iv) each Series of Additional Notes issued under this
Agreement shall be in substantially the form of Exhibit 1 to Exhibit S
hereto with such variations, omissions and insertions as are necessary
or permitted hereunder;
(v) the minimum principal amount of any Note issued under a
Supplement shall be $100,000, except as may be necessary to evidence
the outstanding amount of any Note originally issued in a denomination
of $100,000 or more;
(vi) all Additional Notes shall constitute Senior Debt of the
Company and shall rank pari passu with all other outstanding Notes,
provided that if the Security Documents and the Intercreditor Agreement
are in full force and effect, the Company shall have obtained the
written consent of the necessary parties to the Intercreditor Agreement
as provided for therein; and
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(vii) no Additional Notes shall be issued hereunder if at the
time of issuance thereof and after giving effect to the application of
the proceeds thereof, any Default or Event of Default shall have
occurred and be continuing.
SECTION 3. CLOSING.
The sale and purchase of the Series 2000-A Notes to be purchased by
each Purchaser shall occur at the offices of Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603 at 10:00 a.m. Chicago time, at a closing (the
"Closing") on March 22, 2000 or on such other Business Day thereafter on or
prior to March 24, 2000 as may be agreed upon by the Company and the Purchasers.
At the Closing the Company will deliver to each Purchaser the Series 2000-A
Notes to be purchased by such Purchaser in the form of a single Series 2000-A
Note (or such greater number of Series 2000-A Notes in denominations of at least
$100,000 as such Purchaser may request) dated the date of the Closing and
registered in such Purchaser's name (or in the name of such Purchaser's
nominee), against delivery by such Purchaser to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company to
account number 001390029677, account name Quanta Services, Inc., at Bank of
America, Dallas, Texas, ABA Number 111000025. If at the Closing the Company
shall fail to tender such Notes to any Purchaser as provided above in this
Section 3, or any of the conditions specified in Section 4 shall not have been
fulfilled to any Purchaser's satisfaction, such Purchaser shall, at such
Purchaser's election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
The obligation of each Purchaser to purchase and pay for the Series
2000-A Notes to be sold to such Purchaser at the Closing is subject to the
fulfillment to such Purchaser's satisfaction, prior to or at the Closing, of the
following conditions:
Section 4.1. Representations and Warranties of the Company. The
representations and warranties of the Company in this Agreement shall be correct
when made and at the time of Closing.
Section 4.2. Representations and Warranties of the Guarantors. The
representations and warranties of the Guarantors in the Guaranty Agreement shall
be correct when made and at the time of the Closing.
Section 4.3. Performance; No Default. The Company and the Guarantors
shall have performed and complied with all agreements and conditions contained
in this Agreement required to be performed or complied with by the Company and
the Guarantors prior to or at the Closing, and after giving effect to the issue
and sale of the Series 2000-A Notes (and the application of the proceeds thereof
as contemplated by Section 5.14), no Default or Event of Default shall have
occurred and be continuing. Neither the Company nor any Subsidiary shall
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have entered into any transaction since the date of the Memorandum that would
have been prohibited by Section 10 hereof had such Sections applied since such
date.
Section 4.4. Compliance Certificates.
(a) Officer's Certificate of the Company. The Company shall
have delivered to such Purchaser an Officer's Certificate, dated the
date of the Closing, certifying that the conditions specified in
Sections 4.1, 4.3 and 4.16 have been fulfilled.
(b) Secretary's Certificate of the Company. The Company shall
have delivered to such Purchaser a certificate certifying as to the
resolutions attached thereto and other corporate proceedings relating
to the authorization, execution and delivery of the Series 2000-A Notes
and this Agreement.
(c) Officer's Certificate of the Guarantors. Each Guarantor
shall have delivered to such Purchaser an Officer's Certificate, dated
the date of the Closing, certifying that the conditions specified in
Sections 4.2 and 4.3 have been fulfilled.
(d) Secretary's Certificate of the Guarantors. Each Guarantor
shall have delivered to such Purchaser a certificate certifying as to
the resolutions attached thereto and other corporate proceedings
relating to the authorization, execution and delivery of the Guaranty
Agreement.
Section 4.5. Guaranty Agreement. The Guaranty Agreement shall have been
duly authorized, executed and delivered by the Guarantors, shall constitute the
legal, valid and binding contract and agreement enforceable against the
respective Guarantors in accordance with its terms and such Purchaser shall have
received a true, correct and complete copy thereof.
Section 4.6. Security Documents, Etc. The Security Documents shall have
been duly authorized, executed and delivered by the respective parties thereto,
shall constitute legal, valid and binding contracts and agreements enforceable
against the respective parties in accordance with their terms and such Purchaser
shall have received true, correct and complete copies of each thereof.
Section 4.7. Filing. The Security Documents (together with any
financing statements) shall have been duly filed in such public offices as may
be deemed necessary or appropriate by such Purchaser or such Purchaser's special
counsel in order to perfect the Liens granted or conveyed thereby.
Section 4.8. Intercreditor Agreement. The Intercreditor Agreement
substantially in the form of Exhibit 3 attached hereto shall have been executed
and delivered by the respective parties thereto and shall be in full force and
effect and such Purchaser shall have received a true, correct and complete copy
thereof.
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Section 4.9. Insurance. Certificates of insurance evidencing the
insurance policies required to be delivered pursuant to the Security Documents
shall be satisfactory in scope and form to such Purchaser and shall have been
delivered to the Collateral Agent and such Purchaser.
Section 4.10. Pledged Stock. The certificates representing the Pledged
Stock (together with duly executed undated stock powers endorsed in blank) shall
have been delivered to the Collateral Agent.
Section 4.11. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser, dated the date of
the Closing (a) from Brad Eastman, Esq., General Counsel of the Company,
covering the matters set forth in Exhibit 4.11(a) and covering such other
matters incident to the transactions contemplated hereby as such Purchaser or
such Purchaser's counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to such Purchaser), (b) from Akin,
Gump, Strauss, Hauer & Feld, L.L.P., Special Counsel of the Company, covering
the matters set forth in Exhibit 4.11(b) and covering such other matters
incident to the transactions contemplated hereby as such Purchaser or such
Purchaser's counsel may reasonably request (and the Company hereby instructs its
counsel to deliver such opinion to such Purchaser), and (c) from Chapman and
Cutler, the Purchasers' special counsel in connection with such transactions,
substantially in the form set forth in Exhibit 4.11(c) and covering such other
matters incident to such transactions as such Purchaser may reasonably request.
Section 4.12. Purchase Permitted by Applicable Law, Etc. On the date of
Closing each purchase of Series 2000-A Notes shall (a) be permitted by the laws
and regulations of each jurisdiction to which each Purchaser is subject, without
recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including, without limitation, Regulation T, U or X of the
Board of Governors of the Federal Reserve System) and (c) not subject any
Purchaser to any tax, penalty or liability under or pursuant to any applicable
law or regulation, which law or regulation was not in effect on the date hereof.
If requested by any Purchaser, such Purchaser shall have received an Officer's
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.
Section 4.13. Related Transactions. The Company shall have consummated
the sale of the entire principal amount of the Series 2000-A Notes scheduled to
be sold on the date of Closing pursuant to this Agreement.
Section 4.14. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the
Closing, the reasonable fees, reasonable charges and reasonable disbursements of
the Purchasers' special counsel referred to in Section 4.11 to the extent
reflected in a statement of such counsel rendered to the Company at least one
Business Day prior to the Closing.
Section 4.15. Private Placement Number. A Private Placement Number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of
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the National Association of Insurance Commissioners) shall have been obtained
for each tranche of the Series 2000 Notes.
Section 4.16. Changes in Corporate Structure. The Company shall not
have changed its jurisdiction of incorporation or, except as reflected in
Schedule 4.16, been a party to any merger or consolidation and shall not have
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent financial statements referred
to in Schedule 5.5.
Section 4.17. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to such Purchaser and such Purchaser's special counsel, and such
Purchaser and such Purchaser's special counsel shall have received all such
counterpart originals or certified or other copies of such documents as such
Purchaser or such Purchaser's special counsel may reasonably request.
Section 4.18. Conditions to Issuance of Additional Notes. The
obligations of the Additional Purchasers to purchase any Additional Notes shall
be subject to the following conditions precedent, in addition to the conditions
specified in the Supplement pursuant to which such Additional Notes may be
issued:
(a) Compliance Certificate. A duly authorized Senior Financial
Officer shall execute and deliver to each Additional Purchaser and each
holder of Notes an Officer's Certificate dated the date of issue of
such Series of Additional Notes stating that such officer has reviewed
the provisions of this Agreement (including any Supplements hereto) and
setting forth the information and computations (in sufficient detail)
required in order to establish whether the Company is in compliance
with the requirements of Section 10.2 on such date (based upon the
financial statements for the most recent fiscal quarter ended prior to
the date of such certificate).
(b) Execution and Delivery of Supplement. The Company and
each such Additional Purchaser shall execute and deliver a Supplement
substantially in the form of Exhibit S hereto.
(c) Representations of Additional Purchasers. Each Additional
Purchaser shall have confirmed in the Supplement that the
representations set forth in Section 6 are true with respect to such
Additional Purchaser on and as of the date of issue of the Additional
Notes.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each
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jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Company has the corporate power and authority to
own or hold under lease the properties it purports to own or hold under lease,
to transact the business it transacts and proposes to transact, to execute and
deliver this Agreement, the Security Documents and the Notes and to perform the
provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement, the Security Documents
and the Notes have been duly authorized by all necessary corporate action on the
part of the Company, and this Agreement and the Security Documents constitute,
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, fraudulent conveyance,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 5.3. Disclosure. The Company, through its agents, Banc of
America Securities LLC and Morgan Stanley Dean Witter, has delivered to each
Purchaser a copy of a Private Placement Memorandum, dated January, 2000 (the
"Memorandum"), relating to the transactions contemplated hereby. The Memorandum
fairly describes, in all material respects, the general nature of the business
and principal properties of the Company and its Subsidiaries. Except for any
research reports (if any) prepared by Banc of America Securities LLC and Morgan
Stanley Dean Witter which may have been provided separately from the Memorandum
for which no representation or warranty is being made by the Company, this
Agreement, the Security Documents, the Memorandum, the documents, certificates
or other writings delivered to the Purchasers by or on behalf of the Company in
connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.5, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under
which they were made. Since September 30, 1999, there has been no change in the
financial condition, operations, business or properties of the Company or any of
its Subsidiaries 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 been set forth herein or in the Memorandum or in the other
documents, certificates and other writings delivered to each Purchaser by or on
behalf of the Company specifically for use in connection with the transactions
contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists of (i) the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, and all
other Investments of the Company and its Subsidiaries, and (ii) the Company's
directors and senior officers.
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(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 for the Liens created by the Security Documents and 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.
Section 5.5. Financial Statements. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries
listed on Schedule 5.5. All of said financial statements (including in each case
the related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such financial statements and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).
Section 5.6. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this Agreement, the
Security Documents and the Notes will not (a) contravene, result in any breach
of, or constitute a default under, or result in the creation of any Lien not
permitted by Section 10.5 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, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any
Subsidiary, or (c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or any
Subsidiary, except for any such default, breach, contravention or violation
which could not reasonably be expected to have a Material Adverse Effect.
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Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement, the Security Documents or the Notes, except
for such filings as may be necessary to perfect or maintain the perfection of
the Liens created by the Security Documents, certain other customary filing
related to future performance and routine governmental filings made in
compliance with any applicable securities laws.
Section 5.8. Litigation; Observance of 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
or before or by any Governmental Authority that in any such case, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(b) Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed all
Material tax returns that are required to have been filed in any jurisdiction,
and have paid all taxes shown to be due and payable on such returns and all
other taxes and assessments levied upon them or their properties, assets, income
or franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (a) the amount of which is not individually or in the aggregate
Material or (b) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, 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, as calculated in accordance with GAAP.
Section 5.10. Title to Property Leases. The Company and its
Subsidiaries have good and sufficient title to their respective properties which
the Company and its Subsidiaries own or purport to own, 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.
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Section 5.11. Licenses, Permits, Etc. Except as disclosed in Schedule
5.11,
(a) the Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights,
service marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known conflict
with the rights of others except for those conflicts, that,
individually or in the aggregate, would not have a Material Adverse
Effect;
(b) to the best knowledge of the Company, no product of the
Company or any of its Subsidiaries infringes in any material respect
any license, permit, franchise, authorization, patent, copyright,
service mark, trademark, trade name or other right owned by any other
Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Company or
any of its Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) 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 meanings 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 post-retirement 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
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mandated by Section 4980B of the Code), if any, of the Company and its
Subsidiaries under any employee welfare benefit plan (as defined in Section 3 of
ERISA), is not Material or has otherwise been disclosed in the most recent
audited consolidated financial statements of the Company and its Subsidiaries.
(e) The execution and delivery of this Agreement and the Security
Documents 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 which in either event, could reasonably be
expected to result in a Material Adverse Effect. The representation by the
Company in the first sentence of this Section 5.12(e) is made in reliance upon
and subject to the accuracy of each Purchaser's representation in Section 6.2 as
to the sources of the funds to be used to pay the purchase price of the Notes to
be purchased by such Purchaser.
Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Series 2000-A Notes or any similar
securities for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, any Person other
than the Purchasers and not more than 65 other Institutional Investors, each of
which has been offered the Series 2000-A Notes in connection with a private
placement 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 Series 2000-A Notes to the registration requirements of Section 5 of the
Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will
apply the proceeds of the sale of the Series 2000-A Notes for general corporate
purposes of the Company and its Subsidiaries (including the repayment of Debt of
the Company and its Subsidiaries and for acquisitions). No part of the proceeds
from the sale of the Series 2000-A Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 2% of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 2% of the value of such assets. As used
in this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation U.
Section 5.15. Existing Debt; Future Liens. (a) Except as described
therein, Schedule 5.15 sets forth a complete and correct list of all outstanding
Debt of the Company and its Subsidiaries as of December 31, 1999, since which
date there has been no Material change in the amounts, interest rates, sinking
funds, installment payments or maturities of the Debt of the Company or its
Subsidiaries. Neither 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 in an unpaid amount of $1,000,000
or more and no event or condition exists with respect to any Debt of the Company
or any Subsidiary in an unpaid amount of $1,000,000 or
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more 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 not permitted by Section 10.5.
Section 5.16. Foreign Assets Control Regulations, Etc. Neither the sale
of the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
Section 5.17. Status under Certain Statutes. Neither the Company nor
any Subsidiary is an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, or is subject
to regulation under the Public Utility Holding Company Act of 1935, as amended,
the ICC Termination Act of 1995, as amended, or the Federal Power Act, as
amended.
Section 5.18. Environmental Matters. Neither the Company nor any
Subsidiary has knowledge of any liability or has received any notice of any
liability, and no proceeding has been instituted 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, alleging any 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 each Purchaser in writing:
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would give rise to any liability, public or private,
for violation of Environmental Laws or damage to the environment
emanating from, occurring on or in any way related to real properties
or to other assets now or formerly owned, leased or operated by any of
them 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
any Hazardous Materials on real properties now or formerly owned,
leased or operated by any of them or has disposed of any Hazardous
Materials in each case in a manner contrary to any Environmental Laws
and in any manner that could reasonably be expected to result in a
Material Adverse Effect; and
(c) to the knowledge of the Company and its Subsidiaries, 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.
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Section 5.19. Filing and Recordation. On the date of Closing, all UCC
financing statements and all Security Documents have been duly filed in all
public offices wherein such filings were made to perfect the Lien of the
security agreement securing the Debt outstanding under the Bank Credit
Agreement. The Security Documents create a valid Lien in the collateral
described therein.
Section 5.20. Other Representations and Warranties. The representations
and warranties of the Company set forth in the Security Documents are true and
correct as of the date of Closing and are incorporated herein by reference with
the same force and effect as though set forth herein in full.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase for Investment. Each Purchaser represents that it
is purchasing the Series 2000-A Notes for its own account or for one or more
separate accounts maintained by it or for the account of one or more pension or
trust funds and not with a view to the distribution thereof, provided that the
disposition of such Purchaser's or such pension or trust funds' property shall
at all times be within such Purchaser's or such pension or trust funds' control.
Each Purchaser understands that the Series 2000-A 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 Series 2000-A Notes.
Section 6.2. Source of Funds. Each Purchaser represents that at least
one of the following statements is an accurate representation as to each source
of funds (a "Source") to be used by it to pay the purchase price of the Series
2000-A Notes to be purchased by it hereunder:
(a) the Source is an "insurance company general account"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no employee
benefit plan, treating as a single plan all plans maintained by the
same employer or employee organization, with respect to which the
amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceeds ten percent (10%)
of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth
in the NAIC Annual Statement for such Purchaser most recently filed
with such Purchaser's state of domicile; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as such Purchaser
prior to the execution and delivery of this Agreement has disclosed to
the Company in writing pursuant to this paragraph (b), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
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(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment
fund have been disclosed to the Company in writing pursuant to this
paragraph (c) prior to the execution and delivery of this Agreement; or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which prior to the execution and delivery of
this Agreement has been identified to the Company in writing pursuant
to this paragraph (e); or
(f) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA; or
(g) the Source is an insurance company separate account
maintained solely in connection with the fixed contractual obligations
of the insurance company under which the amounts payable, or credited,
to any employee benefit plan (or its related trust) and to any
participant or beneficiary of such plan (including any annuitant) are
not affected in any manner by the investment performance of the
separate account.
If any Purchaser or any Additional Purchaser or any subsequent transferee of the
Notes indicates that such Purchaser or any Additional Purchaser or such
transferee is relying on any representation contained in paragraph (b), (c) or
(e) above, the Company shall deliver on the date of issuance of such Notes and
on the date of any applicable transfer a certificate, which shall either state
that (i) it is neither a party in interest nor a "disqualified person" (as
defined in Section 4975(e)(2) of the Code), with respect to any plan identified
pursuant to paragraphs (b) or (e) above, or (ii) with respect to any plan,
identified pursuant to paragraph (c) above, neither it nor any "affiliate" (as
defined in Section V(c) of the QPAM Exemption) has at such time, and during the
immediately preceding one year, exercised the authority to appoint or terminate
said QPAM as manager of any plan identified in writing pursuant to paragraph (c)
above or to negotiate the terms of said QPAM's management agreement on behalf of
any such identified plan. As used in this Section 6.2, the terms "employee
benefit plan", "governmental plan", "party in interest" and "separate account"
shall have the respective meanings assigned to such terms in Section 3 of ERISA.
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Section 6.3. Disclosure of Information. Each Purchaser has received all
the information it considers necessary or appropriate for deciding whether to
purchase the Series 2000-A Notes. Each Purchaser further represents that it has
had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Series 2000-A Notes
and the business, properties, prospects and financial condition of the Company.
The foregoing, however, does not limit or modify the representations and
warranties of the Company in Section 5 of this Agreement or the rights of the
Purchasers to rely thereon.
Section 6.4. Investment Experience. Each Purchaser acknowledges that it
is able to fend for itself, can bear the risk of its investment, and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the Series 2000-A Notes.
Section 6.5. Accredited Investor. Each Purchaser represents that it is
an "accredited investor" within the meaning of the Securities and Exchange
Commission Rule 501 of Regulation D, as presently in effect.
SECTION 7. INFORMATION AS TO COMPANY.
Section 7.1. Financial and Business Information. The Company shall
deliver to each holder of Notes that is an Institutional Investor (other than a
Competitor of the Company or any Subsidiary so long as no Event of Default shall
have occurred and be continuing):
(a) Quarterly Statements -- within 60 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,
(i) a consolidated balance sheet of the Company and
its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second
and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from normal,
recurring year-end adjustments, provided that delivery within the time
period specified above of copies of the Company's Quarterly Report on
Form 10-Q prepared in compliance with the requirements therefor and
filed with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this Section 7.1(a);
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(b) Annual Statements -- within 120 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and
its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by an opinion thereon of independent
certified public accountants of recognized national standing, which
opinion shall state that such financial statements present fairly, in
all material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and have
been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made
in accordance with generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances, provided that the delivery within the time period
specified above of the Company's Annual Report on Form 10-K for such
fiscal year (together with the Company's annual report to shareholders,
if any, prepared pursuant to Rule 14a-3 under the Exchange Act)
prepared in accordance with the requirements therefor and filed with
the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities and
Exchange Commission containing information of a financial nature and of
all press releases and other statements made available generally by the
Company or any Subsidiary to the public concerning developments that
are Material;
(d) Notice of Default or Event of Default -- promptly, and in
any event within ten Business Days after a Responsible Officer becomes
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(h), a written notice specifying the nature and period
of existence thereof and what action the Company is taking or proposes
to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within ten
Business Days after a Responsible Officer becomes 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:
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(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 thereof;
or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) the incurrence of any liability by the Company
or any ERISA Affiliate pursuant to Title I or IV of ERISA or
the imposition of a penalty or excise tax under the provisions
of the Code relating to employee benefit plans, or the
imposition of any Lien on any of the rights, properties or
assets of the Company or any ERISA Affiliate pursuant to Title
I or IV of ERISA or such penalty or excise tax provisions, if
such liability or Lien, taken together with any other such
liabilities or Liens then existing, could reasonably be
expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice to
the Company or any Subsidiary from any federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect;
(g) Supplements -- promptly and in any event within 10
Business Days after the execution and delivery of any Supplement, a
copy thereof;
(h) Bank Credit Agreement --- so long as any Event of Default
shall exist under the Bank Credit Agreement, the Company shall furnish
copies of any written notices or certificates furnished by the Company
or any Subsidiary to the Bank Lenders not more than 5 Business Days
following delivery to the Bank Lenders; and
(i) 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.
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
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(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.1 through Section 10.4,
Section 10.5(l) and Section 10.7 hereof, inclusive, during the
quarterly or annual period covered by the statements then being
furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms of such
Sections, and the calculation of the amount, ratio or percentage then
in existence, including, without limitation, a reasonably detailed
calculation of Consolidated Proforma Operating Cash Flow for such
period); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company
or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives
of each holder of Notes that is an Institutional Investor (other than a
Competitor of the Company or any Subsidiary so long as no Event of Default shall
have occurred and be continuing):
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times during business hours 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 and upon reasonable prior notice, to
visit and inspect any of the offices or properties of the Company or
any Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and
accounts with their respective officers and independent public
accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such reasonable times during
business hours and as often as may be reasonably requested.
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SECTION 8. PREPAYMENT OF THE NOTES.
Section 8.1. Required Prepayments. (a) The entire principal amount of
the Tranche 1 Notes shall become due and payable on March 1, 2005.
(b) The entire principal amount of the Tranche 2 Notes shall become due
and payable on March 1, 2007.
(c) The entire principal amount of the Tranche 3 Notes shall become due
and payable on March 1, 2010.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes of any Series, in an amount not less
than 10% of the aggregate principal amount of the Notes of such Series then
outstanding in the case of a partial prepayment, at 100% of the principal amount
so prepaid, together with interest accrued thereon to the date of such
prepayment, plus the Make-Whole Amount determined for the prepayment date with
respect to such principal amount of each Note of the applicable Series then
outstanding. The Company will give each holder of Notes of the Series to be
prepaid 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 and each Series of 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 of the Series to be prepaid a certificate of a
Senior Financial Officer specifying the calculation of such Make-Whole Amount as
of the specified prepayment date.
Section 8.3. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes pursuant to the provisions of Section 8.2, the
principal amount of the Notes of the Series to be prepaid shall be allocated
among all of the Notes of such Series at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof. All
regularly scheduled partial prepayments made with respect to any Additional
Series of Notes pursuant to any Supplement shall be allocated as provided
therein.
Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment
of Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to
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the Company and cancelled and shall not be reissued, and no Note shall be issued
in lieu of any prepaid principal amount of any Note.
Section 8.5. Purchase of Notes. The Company will not and will use
reasonable commercial efforts to not permit any Affiliate to purchase, redeem,
prepay or otherwise acquire, directly or indirectly, any of the outstanding
Notes except upon the payment or prepayment of the Notes in accordance with the
terms of this Agreement (including any Supplement hereto) and the Notes. The
Company will promptly cancel all Notes acquired by it or any Subsidiary pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for any
such Notes.
Section 8.6. Make-Whole Amount for Series 2000-A Notes. The term
"Make-Whole Amount" means, with respect to a Series 2000-A Note of any Tranche,
an amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of the Series 2000-A
Note of such Tranche 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 a Series 2000-A Note
of any Tranche, the principal of the Series 2000-A Note of such Tranche
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 a Series 2000-A Note of any Tranche, the amount obtained by
discounting all Remaining Scheduled Payments with respect to such
Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance
with accepted financial practice and at a discount factor (applied on
the same periodic basis as that on which interest on the Series 2000-A
Note of such Tranche is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of a Series 2000-A Note of any Tranche, 0.50% 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 "PX-1" on the Bloomberg Financial Market Screen (or such other
display as may replace "PX-1" on the Bloomberg Financial Market Screen)
for actively traded U.S. Treasury securities having a maturity equal to
the Remaining Average Life of such Called Principal as of such
Settlement Date, or (ii) if such yields are not reported as of such
time or the yields reported as of such time are not ascertainable, the
Treasury Constant Maturity Series Yields reported, for the latest day
for which such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of
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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 on a straight line basis between (1) the
actively traded U.S. Treasury security with the maturity closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the maturity closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of a Series 2000-A Note of any Tranche, all payments
of such Called Principal and interest thereon that would be due after
the Settlement Date with respect to such Called Principal if no payment
of such Called Principal were made prior to its scheduled due date,
provided that if such Settlement Date is not a date on which interest
payments are due to be made under the terms of the Series 2000-A Note
of such Tranche, 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 a Series 2000-A Note of any Tranche, the date on which such Called
Principal is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as
the context requires.
Section 8.7. Change in Control.
(a) Notice of Change in Control or Control Event. The Company will,
within fifteen Business Days after any Responsible Officer has knowledge of the
occurrence of any Change in Control or Control Event (subject in the case of any
Control Event to contractual limitations on disclosure and disclosure
limitations imposed by applicable securities laws), give written notice of such
Change in Control or Control Event to each holder of Notes unless notice in
respect of such Change in Control (or the Change in Control contemplated by such
Control Event) shall have been given pursuant to subparagraph (b) of this
Section 8.7. If a Change in Control has occurred, such notice shall contain and
constitute an offer to prepay Notes as described in subparagraph (c) of this
Section 8.7 and shall be accompanied by the certificate described in
subparagraph (g) of this Section 8.7.
(b) Condition to Company Action. The Company will not take any action
that consummates or finalizes a Change in Control unless (i) to the extent the
giving of such advance notice is reasonably within its control, at least 30 days
prior to such action it shall have given to
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each holder of Notes written notice containing and constituting an offer to
prepay Notes as described in subparagraph (c) of this Section 8.7, accompanied
by the certificate described in subparagraph (g) of this Section 8.7, and (ii)
contemporaneously with such action, it prepays all Notes required to be prepaid
in accordance with this Section 8.7.
(c) Offer to Prepay Notes. The offer to prepay Notes contemplated by
subparagraphs (a) and (b) of this Section 8.7 shall be an offer to prepay, in
accordance with and subject to this Section 8.7, all, but not less than all, the
Notes held by each holder (in this case only, "holder" in respect of any Note
registered in the name of a nominee for a disclosed beneficial owner shall mean
such beneficial owner) on a date specified in such offer (the "Proposed
Prepayment Date"). If such Proposed Prepayment Date is in connection with an
offer contemplated by subparagraph (a) of this Section 8.7, such date shall be
not less than 30 days and not more than 60 days after the date of such offer (if
the Proposed Prepayment Date shall not be specified in such offer, the Proposed
Prepayment Date shall be the 30th day after the date of such offer).
(d) Acceptance. A holder of Notes may accept the offer to prepay made
pursuant to this Section 8.7 by causing a notice of such acceptance to be
delivered to the Company at least 15 days prior to the Proposed Prepayment Date.
A failure by a holder of Notes to respond to an offer to prepay made pursuant to
this Section 8.7 shall be deemed to constitute a rejection of such offer by such
holder.
(e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.7 shall be at 100% of the principal amount of such Notes together with
interest on such Notes accrued to the date of prepayment. The prepayment shall
be made on the Proposed Prepayment Date except as provided in subparagraph (f)
of this Section 8.7.
(f) Deferral Pending Change in Control. The obligation of the Company
to prepay Notes pursuant to the offers required by subparagraph (b) and accepted
in accordance with subparagraph (d) of this Section 8.7 is subject to the
occurrence of the Change in Control in respect of which such offers and
acceptances shall have been made. In the event that such Change in Control does
not occur on the Proposed Prepayment Date in respect thereof, the prepayment
shall be deferred until, and shall be made on the date on which, such Change in
Control occurs. The Company shall keep each holder of Notes reasonably and
timely informed of (i) any such deferral of the date of prepayment, (ii) the
date on which such Change in Control and the prepayment are expected to occur,
and (iii) any determination by the Company that efforts to effect such Change in
Control have ceased or been abandoned (in which case the offers and acceptances
made pursuant to this Section 8.7 in respect of such Change in Control shall be
deemed rescinded).
(g) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section 8.7 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this
Section 8.7; (iii) the principal amount of each Note offered to be prepaid; (iv)
the interest that would be due on each Note offered to be prepaid, accrued to
the Proposed
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Prepayment Date; (v) that the conditions of this Section 8.7 have been
fulfilled; and (vi) in reasonable detail, the nature and date or proposed date
of the Change in Control.
(h) "Change in Control" Defined. "Change in Control" means each and
every issue, sale or other disposition of shares of stock of the Company which
results in any person (as such term is used in Section 13(d) and Section
14(d)(2) of the Exchange Act) or related persons constituting a group (as such
term is used in Rule 13d-5 under the Exchange Act) (herein, an "Acquiring
Person") becoming the "beneficial owners" (as such term is used in Rule 13d-3
under the Exchange Act as in effect on the date of the Closing), directly or
indirectly, of more than 50% (by total voting power) of the issued and
outstanding capital stock of the Company which is entitled to vote in the
election of the members of the Company's board of directors.
(i) "Control Event" Defined. "Control Event" means:
(i) the execution by the Company or any of its Subsidiaries or
Affiliates of any agreement or letter of intent with respect to any
proposed transaction or event or series of transactions or events
which, individually or in the aggregate, may reasonably be expected to
result in a Change in Control,
(ii) the execution of any written agreement which, when fully
performed by the parties thereto, would result in a Change in Control,
or
(iii) at any time after a public offering of equity securities
of the Company, the making of any written offer by any Acquiring Person
to the holders of the common stock of the Company, which offer, if
accepted by the requisite number of holders, would result in a Change
in Control.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will cause each
of its Subsidiaries to, comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Section 9.2. Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves
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are maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated.
Section 9.3. Maintenance of Properties. The Company will, and will
cause each of its Subsidiaries to, maintain and keep, or cause to be maintained
and kept, their respective properties in good repair, working order and
condition (other than ordinary wear and tear), so that the business carried on
in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Subsidiary from discontinuing
the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will, and will
cause each of its Subsidiaries to, file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Company
or any Subsidiary not permitted by Section 10.4, 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
non-filing or nonpayment, as the case may be, of all such taxes and assessments
in the aggregate could not reasonably be expected to have a Material Adverse
Effect.
Section 9.5. Corporate Existence, Etc. Subject to Sections 10.5 and
10.6, the Company will at all times preserve and keep in full force and effect
its corporate existence, and will at all times preserve and keep in full force
and effect the corporate existence of each of its Subsidiaries (unless merged
into the Company or a Wholly-Owned Subsidiary) and all rights and franchises of
the Company and its Subsidiaries unless, in the good faith judgment of the
Company, the termination of or failure to preserve and keep in full force and
effect such corporate existence, right or franchise could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.6. Guaranty by Subsidiaries. So long as the Guaranty
Agreement shall remain in effect, the Company will cause any Person which
becomes a Domestic Subsidiary after the Closing to enter into the Guaranty
Agreement, together with any security agreement necessary to cause the Guaranty
Agreement to rank pari passu with the Debt owing to the Bank Lenders, and to
deliver within five Business Days thereafter to each of the holders of the
Notes, a joinder agreement in respect of the Guaranty Agreement and any security
agreement similar to any that have been executed and delivered in favor of the
Bank Lenders.
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SECTION 10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Consolidated Net Worth. The Company will not, at any
time, permit Consolidated Net Worth to be less than the sum of (a) $600,000,000,
plus (b) an aggregate amount equal to 50% of its Consolidated Net Income (but,
in each case, only if a positive number) for each completed fiscal quarter
beginning with the fiscal quarter ended March 31, 2000.
Section 10.2. Limitation on Consolidated Debt. The Company will not, at
any time, permit the Consolidated Debt Ratio to be greater than 3.50 to 1.00.
Section 10.3. Limitation on Priority Debt. The Company will not, at any
time, permit Priority Debt to exceed 20% of Consolidated Net Worth (determined
as of the then most recently ended fiscal quarter of the Company).
Section 10.4. Interest Charges Coverage Ratio. The Company will not, at
any time, permit the Interest Charges Coverage Ratio to be less than 2.00 to
1.00.
Section 10.5. Limitation on Liens. The Company will not, and will not
permit any of its Subsidiaries to, directly or indirectly create, incur, assume
or permit to exist (upon the happening of a contingency or otherwise), any Lien
on or with respect to any property or asset (including, without limitation, any
document or instrument in respect of goods or accounts receivable) of the
Company or any such Subsidiary, whether now owned or held or hereafter acquired,
or any income or profits therefrom, or assign or otherwise convey any right to
receive income or profits, provided that this Section 10.5 shall not limit the
Company's ability to pay dividends on its capital stock if and when declared by
the board of directors of the Company (unless it makes, or causes to be made,
effective provision whereby the Notes will be equally and ratably secured with
any and all other obligations thereby secured, such security to be pursuant to a
written agreement 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) except:
(a) Liens for taxes, assessments or other governmental charges
which are not yet due and payable or the payment of which is not at the
time required by Section 9.4;
(b) any attachment or judgment Lien, unless the judgment it
secures shall not, within 60 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall not
have been discharged within 60 days after the expiration of any such
stay;
(c) Liens incidental to the conduct of business or the
ownership of properties and assets (including landlords', carriers',
warehousemen's, mechanics', materialmen's and other similar Liens) and
Liens to secure the performance of bids, tenders, leases, or trade
contracts, or to secure statutory obligations (including obligations
under workers
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compensation, unemployment insurance and other social security
legislation), surety or appeal bonds or other Liens incurred in the
ordinary course of business and not in connection with the borrowing of
money;
(d) leases or subleases entered into by the Company or its
Subsidiaries as either lessors or sublessors, easements, rights-of-way,
restrictions and other similar charges or encumbrances (including
zoning restrictions), in each case incidental to the ownership of
property or assets or the ordinary conduct of the business of the
Company or any of its Subsidiaries, provided that such Liens do not, in
the aggregate, detract from the value of such property in any material
way;
(e) Liens incidental to minor survey exceptions and similar
Liens, provided that such Liens do not, in the aggregate, materially
detract from the value of such property;
(f) Liens on property or assets of Subsidiaries securing Debt
owing to the Company or to another Subsidiary;
(g) Liens existing on the date of Closing described in
Schedule 10.5 which secure outstanding Debt of the Company and its
Subsidiaries referred to in Schedule 5.15 hereto;
(h) any Lien existing on property of a Person immediately
prior to its being consolidated with or merged into the Company or a
Subsidiary or its becoming a Subsidiary, or any Lien existing on any
property acquired by the Company or any Subsidiary at the time such
property is so acquired (whether or not the Debt secured thereby shall
have been assumed), provided that (i) no such Lien shall have been
created or assumed in contemplation of such consolidation or merger or
such Person's becoming a Subsidiary or such acquisition of property,
(ii) each such Lien shall extend solely to the item or items of
property so acquired, and (iii) the aggregate principal amount of all
Debt secured by any such Lien shall be permitted by the limitations set
forth in Section 10.2;
(i) Liens given to secure the payment of the purchase price
incurred in connection with the acquisition, lease (including any
Capital Lease) or construction of property (other than accounts
receivable or inventory) useful and intended to be used in carrying on
the business of the Company or a Subsidiary, including Liens existing
on such property at the time of acquisition, lease or construction
thereof or improvements thereon, or Liens incurred within 180 days of
such acquisition or the completion of such construction, provided that
(i) the Lien shall attach solely to the property acquired, purchased,
leased, constructed or improved, (ii) at the time of acquisition or
construction of such property, the aggregate amount remaining unpaid on
all Debt secured by Liens on such property, whether or not assumed by
the Company or a Subsidiary, shall not exceed an amount equal to the
lesser of the total purchase price or Fair Market Value at the time of
acquisition or construction of such property (as determined in good
faith by one or more officers of the Company or such Subsidiary, as the
case may be, to whom authority to enter into the transaction has been
delegated by the board of directors of the Company
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or such Subsidiary, as the case may be), and (iii) the aggregate
principal amount of all Debt secured by such Liens shall be permitted
by the limitations set forth in Section 10.2;
(j) Liens created by the Security Documents and similar
security documents securing Debt outstanding under this Agreement, the
Guaranty Agreement and the Bank Credit Agreement and any related
Guaranty of the Bank Credit Agreement provided that in the case of any
successor Bank Credit Agreement, the Bank Lenders and the holders of
the Notes shall continue to be parties to the Intercreditor Agreement;
(k) any extensions, renewals or replacements of any Lien
permitted by the preceding subparagraphs of this Section 10.5, provided
that (i) no additional property shall be encumbered by such Liens, (ii)
the unpaid principal amount of the Debt secured thereby shall not be
increased prior to or on or after the date of any extension, renewal or
replacement, (iii) the weighted average life to maturity of the Debt
secured by such Liens shall not be reduced, and (iv) at such time and
immediately after giving effect thereto, no Default or Event of Default
would exist; and
(l) in addition to the Liens permitted by the preceding
subparagraphs (a) through (k), inclusive, of this Section 10.5, Liens
securing Debt of the Company, provided that the aggregate principal
amount of such Debt shall not at any time exceed 10% of Consolidated
Net Worth (determined as of the then most recently ended fiscal quarter
of the Company).
Section 10.6. Merger, Consolidation. The Company will not, and will not
permit any Subsidiary to, consolidate with or be a party to a merger with any
other Person; provided, however, that:
(1) any Subsidiary may merge or consolidate with or into the
Company, so long as in any merger or consolidation involving the
Company, the Company shall be the surviving entity;
(2) any Subsidiary may merge or consolidate with or into any
other Person if either (x) the Subsidiary shall be the surviving
entity, or (y) if the Subsidiary is not the surviving entity, such
transaction is permitted by Section 10.7; and
(3) the Company may consolidate or merge with any other Person
if (i) either (x) the Company shall be the surviving entity, or (y) if
the surviving entity is other than the Company, (A) such entity is
organized under the laws of the United States or any jurisdiction
thereof, (B) such entity expressly assumes, by written agreement
satisfactory in scope and form to the Required Holders, all obligations
of the Company under the Notes, this Agreement and each Security
Document to which the Company is a party, (C) such entity shall cause
to be delivered to each holder of Notes an opinion of independent
counsel to the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and comply
with the provisions of this Section 10.6 and otherwise satisfactory in
scope and form to the Required Holders, and
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(ii) at the time of such consolidation or merger and after giving
effect thereto, no Default or Event of Default shall have occurred and
be continuing.
Section 10.7. Sales of Assets. (a) The Company will not, and will not
permit any Subsidiary to, sell, lease or otherwise dispose of any substantial
part (as defined below) of the assets of the Company and its Subsidiaries;
provided, however, that the Company or any Subsidiary may sell lease or
otherwise dispose of assets constituting a substantial part of the assets of the
Company and its Subsidiaries if such assets are sold for Fair Market Value and,
at such time and after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing, and an amount equal to the proceeds
received from such sale, lease or other disposition during such fiscal year
which shall be in excess of 10% of the book value of Consolidated Total Assets,
determined as of the end of the fiscal year immediately preceding such sale,
lease or other disposition, shall be used within 180 days of such disposition:
(1) to acquire property, plant and equipment or any business
entity (including the capital stock thereof) used or useful in carrying
on the business of the Company and its Subsidiaries and having a Fair
Market Value at least equal to the Fair Market Value of such assets
sold, leased or otherwise disposed of; or
(2) to prepay or retire Senior Debt of the Company and/or its
Subsidiaries, provided that if any Notes are prepaid pursuant to the
terms of this Section 10.7, such Notes shall also be prepaid in
accordance with the terms of Section 8.2 of this Agreement.
As used in this Section 10.7, a sale, lease or other disposition of
assets shall be deemed to be a "substantial part" of the assets of the Company
and its Subsidiaries if the book value of such assets, when added to the book
value of all other assets sold, leased or otherwise disposed of by the Company
and its Subsidiaries (other than in transactions (i) in the ordinary course of
business, (ii) in which the purchaser is the Company or a Subsidiary, or (iii)
which are Excluded Sale and Leaseback Transactions) during such fiscal year,
exceeds 10% of the book value of Consolidated Total Assets, determined as of the
end of the fiscal quarter immediately preceding such sale, lease or other
disposition.
Section 10.8. Nature of Business. Neither the Company nor any
Subsidiary will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Company and its Subsidiaries would be substantially changed from the general
nature of the business engaged in by the Company and its Subsidiaries on the
date of this Agreement.
Section 10.9. Transactions with Affiliates. The Company will not and
will not permit any Subsidiary to enter into directly or indirectly any Material
transaction or Material group of related transactions (including without
limitation the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate (other than the Company or
another Subsidiary), except upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate.
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Section 10.10. Further Assurances. So long as any Security Document and
the Guaranty Agreement shall remain in effect, if the Collateral Agent shall
resign or be removed or the Intercreditor Agreement shall no longer be in full
force and effect, the Company will, and will cause each Guarantor to, execute
and deliver to each holder of a Note such additional documents (including
amendments to the Security Documents) as the holders of the Notes shall
reasonably request so that there shall continue to be a Collateral Agent under
the Security Documents and to insure that the Lien of the Security Documents
shall continue to be in full force and effect.
So long as any Security Document shall remain in effect, the Company
also agrees at its own expense to cause or use its reasonable commercial efforts
to cause the Security Documents and all supplements and amendments thereto and
all financing and continuation statements and similar notices required by
applicable law at all times to be kept, recorded and filed in such manner and in
such places to maintain the effectiveness of any original or supplemental
filings under the Uniform Commercial Code or comparable law in any relevant
jurisdiction to maintain, in full force and effect, the Lien and security
interest granted by the Company and the Guarantors to the holders of the Notes
or the Collateral Agent for the benefit of the holders of the Notes pursuant to
the Security Documents.
SECTION 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in Section 10.4, Section 10.6 or Section 10.7
and such default is not remedied within five (5) Business Days of the
occurrence thereof; or
(d) the Company defaults in the performance of or compliance
with any term contained herein or in any Supplement (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) prior to the release of any Guarantor from the Guaranty
Agreement upon the occurrence of a Guaranty Release Event, a default
shall occur in the observance or performance of any covenant or
agreement contained in the Guaranty Agreement by such Guarantor and
such default shall continue beyond the period of grace, if any, allowed
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with respect thereto or the Guaranty Agreement shall cease to be in
full force and effect for any reason whatsoever, including, without
limitation, a determination by any governmental body or court that such
agreement is invalid, void or unenforceable against such Guarantor or
such Guarantor shall contest or deny in writing the validity or
enforceability of any of its obligations under the Guaranty Agreement;
or
(f) prior to the release of any Security Document upon the
occurrence of a Collateral Release Event, a default shall occur in the
observance or performance of any covenant or agreement contained in
such Security Document and such default shall continue beyond the
period of grace, if any, allowed with respect thereto or such Security
Document creating or granting a Lien on any Collateral shall cease to
be in full force and effect or the Company or any Guarantor shall deny
or disaffirm the validity of any such Lien;
(g) any representation or warranty made in writing by or on
behalf of the Company or any Guarantor or by any officer of the Company
or any Guarantor in this Agreement, any Security Document or the
Guaranty Agreement or in any writing furnished in connection with the
transactions contemplated hereby or thereby proves to have been false
or incorrect in any mate