EXHIBIT 10(k)(ii)
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ALBANY INTERNATIONAL CORP.
AND CERTAIN SUBSIDIARIES PARTY HERETO
AS
GUARANTORS
$150,000,000
5.34% SENIOR NOTES DUE OCTOBER 25, 2017
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NOTE AGREEMENT
AND
GUARANTY
----------
Dated as of October 25, 2005
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<PAGE>
TABLE OF CONTENTS
(Not Part of Agreement)
Page
1. AUTHORIZATION OF ISSUE OF
NOTES
1
2. PURCHASE AND SALE OF NOTES
1
3. CONDITIONS OF CLOSING
2
3A. Execution and Delivery of
Documents
2
3B. Opinion of Purchaser's Special
Counsel
3
3C. Purchase Permitted By Applicable
Laws
3
3D. Payment of Fees
4
4. PREPAYMENTS
4
4A. Required Prepayments
4
4B. Optional Prepayment With
Yield-Maintenance Amount
4
4C. Notice of Optional Prepayment
4
4D. Prepayment in Connection with a
Pro Rata Prepayment Event
5
4E. Partial Payments Pro Rata
6
4F. Retirement of Notes
6
5. AFFIRMATIVE COVENANTS
6
5A. Financial Statements
6
5B. Information Required by Rule 144A
8
5C. Notices of Material Events
8
5D. Inspection of Property; Books and
Records
9
5E. [Intentionally Omitted]
9
5F Covenant to Secure Note
Equally
9
5G. Maintenance of Properties;
Compliance with Laws
10
5H. Insurance
10
5I. ERISA
10
5J. Payment of Notes and Maintenance
of Office
10
5K. Environmental Laws
10
5L. Use of Proceeds
11
5M. Further Assurances
11
5N. Existence; Conduct of Business
11
5O. Payment of Obligations
11
6. NEGATIVE COVENANTS
12
6A. Subsidiary Indebtedness
11
6B. Negative Pledge
12
6C. Consolidations, Mergers and Sales
of Assets
12
i
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6D. Transactions with Affiliates
15
6E. Restricted Payments
15
6F. Limitations on Sale-Leasebacks
15
6G. Investments, Loans, Advances,
Guarantees and Acquisitions
16
6H. Leverage Ratio
17
6I. Interest Coverage Ratio
17
6J. Lines of Business
17
6K. Terrorism Sanctions Regulations
17
7. EVENTS OF DEFAULT
17
7A. Acceleration
17
7B. Rescission of Acceleration
20
7C. Notice of Acceleration or
Rescission
21
7D. Other Remedies
21
8. REPRESENTATIONS, COVENANTS
AND WARRANTIES
21
8A. Organization; Authorization;
Enforceability
21
8B. Financial Statements
21
8C. Actions Pending
22
8D. Outstanding Indebtedness
22
8E. Title to Properties
22
8F. Taxes
22
8G. Conflicting Agreements and Other
Matters
22
8H. Offering of Notes
23
8I. Use of Proceeds
23
8J. ERISA
24
8K. Governmental Consent
24
8L. Compliance with Laws
24
8M. Environmental Compliance
24
8N. Utility Company Status
24
8O. Investment Company Status
25
8P. Rule 144A
25
8Q. Disclosure
25
8R. Foreign Assets Control
Regulations, Etc.
25
8S. Subsidiaries
26
8T. Solvency
26
9. REPRESENTATIONS OF THE
PURCHASER 26
9A. Nature of Purchase
26
9B. Source of Funds
26
10. AI GUARANTY AGREEMENT
28
10A. Guarantied
Obligations
28
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10B. Payments
and Performance
28
10C. Releases
28
10D. Waivers
29
10E. Marshaling
30
10F. Immediate
Liability
31
10G. Primary
Obligations
31
10H. No
Reduction or Defense
31
10I.
Subordination
33
10J. No Election
33
10K.
Severability
34
10L.
Appropriations
34
10M. Other
Enforcement Rights
34
10N. Invalid
Payments
34
10O. No Waivers
or Election of Remedies; Expenses; etc.
34
10P. Restoration
of Rights and Remedies
35
10Q. No Setoff
or Counterclaim
35
10R. Further
Assurances
35
10S. Survival
35
10T.
Acknowledgment of Common Interests; etc.
35
10U. Conversion
of Currencies
35
11. DEFINITIONS; ACCOUNTING MATTERS
35
11A.
Yield-Maintenance Terms
36
11B. Other Terms
37
11C. Accounting
and Legal Principles, Terms and Determinations
47
12. MISCELLANEOUS
47
12A. Note
Payments
47
12B. Expenses
48
12C. Consent to
Amendments
48
12D. Form,
Registration, Transfer and Exchange of Notes; Lost Notes
49
12E. Persons
Deemed Owners; Participations
49
12F. Survival of
Representations and Warranties; Entire Agreement
49
12G. Successors
and Assigns
50
12H. Notices
50
12I. Payments
Due on Non-Business Days
50
12J. Governing
Law
50
12K. Consent to
Jurisdiction; Waiver of Immunities
50
12L. Severability
51
12M. Descriptive
Headings
51
12N.
Counterparts
51
12O.
Independence of Covenants
51
12P. Waiver Of
Jury Trial
51
12Q. Independent
Investigation
52
iii
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EXHIBITS
A Form Of Note
B Form Of
Guarantor Joinder
C Form Of
Opinion
D Form Of
Indemnification, Subrogation and Contribution Agreement
SCHEDULES
1A Guarantors
6A Debt
6B Liens
6D Certain Affiliate
Matters
6G Subsidiary Information
and Ownership
8C Litigation
8G Contractual
Restrictions
iv
<PAGE>
ALBANY INTERNATIONAL CORP.
1373 Broadway
Albany, NY 12204
As of October 25, 2005
TO EACH OF THE PURCHASERS NAMED ON
THE ATTACHED PURCHASER SCHEDULE
Ladies and Gentlemen:
The
undersigned, ALBANY
INTERNATIONAL CORP., a
Delaware corporation (the
"Company") hereby agrees with each
Purchaser as follows:
1.
AUTHORIZATION OF ISSUE OF NOTES.
(a) The
Company has authorized the issue of its senior promissory notes
in
the aggregate principal amount of $150,000,000, to be dated the date of issue
thereof, to mature October 25, 2017, to bear interest on the unpaid
balance
thereof from the date thereof until the
principal thereof
shall have become due
and payable at the rate of 5.34% per
annum and on overdue
payments at the rate
specified therein, and to be substantially in the form of Exhibit A
attached
hereto. The term "Notes" as used herein shall include each such senior
promissory note delivered pursuant to any provision of this
Agreement and each
such senior promissory note delivered in
substitution or exchange for any other
Note pursuant to any such provision.
(b) To
induce the Purchasers to enter into this Agreement, and to induce
them to purchase the Notes from the Company
in accordance with the terms hereof,
the obligations of the Company hereunder and under the Notes are fully and
unconditionally guaranteed by the Guarantors, as provided in the AI Guaranty
Agreement. As of the Date of Closing, the Company owns the percentage of
outstanding shares of each Guarantor as set forth on Schedule 6G, and, as a
result, each Guarantor will receive a
direct financial and economic benefit from
the indebtedness to be incurred by the
Company.
2.
PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell to each
Purchaser and, subject to the terms and
conditions
herein set forth, each
Purchaser agrees to purchase from the
Company, Notes in the
aggregate principal
amount set forth opposite such Purchaser's
name on the Purchaser Schedule hereto
at 100% of such aggregate principal amount. The Company will deliver to
each
Purchaser, at the offices of Prudential
Capital Group at 1114
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Avenue of the Americas, 30th Floor, New York, NY 10036, one or more Notes
registered in its name, evidencing the
aggregate principal amount of Notes to be
purchased by such Purchaser and in the
denomination or
denominations
specified
in the Purchaser Schedule attached hereto,
against payment of the purchase price
thereof by transfer of immediately
available funds for credit to the
Company's
account established at such bank as shall
be identified in a written instruction
of the Company, delivered to each Purchaser
not later than 1 Business Days prior
to the Date of Closing, which shall be October 25, 2005 or
any other date on or
before October 31, 2005 upon which the
parties hereto may mutually agree (herein
called the "Closing" or the "Date of
Closing").
3.
CONDITIONS OF CLOSING. The obligation of each Purchaser to purchase
and
pay for the Notes to be purchased by it hereunder is subject to the
satisfaction, on or before the Date of
Closing, of the following conditions:
3A.
Execution and Delivery of Documents. Such Purchaser shall have
received the following, each to be dated the Date of
Closing unless
otherwise
indicated:
(i) the
Note(s) to be purchased by such Purchaser.
(ii) a
favorable opinion of (a) Cleary Gottlieb Steen & Hamilton LLP,
special
counsel to the Company and Guarantors, satisfactory to each
Purchaser
and substantially in the form of Exhibit C-1 attached hereto
and
as to such
other matters as a
Purchaser may
reasonably
request and (b)
Charles
Silva, General Counsel of the Company, satisfactory to each
Purchaser
and substantially in the form of Exhibit C-2 attached hereto
and
as to such
other matters
as a Purchaser may reasonably request. The
Company
and Guarantors
hereby direct each such counsel to deliver such
opinion,
agree that the
issuance and sale of any Notes will constitute a
reconfirmation of such
direction,
and understands and agrees that
each
Purchaser
will and hereby is authorized to rely on such opinion.
(iii) the
Certificate of
Incorporation of the Company and each Guarantor,
each
certified as of a recent date by the Secretary of State (or
equivalent
official)
of the jurisdiction of each such Person's
organization or incorporation.
(iv) the
Bylaws of the
Company and each Guarantor certified by their
respective
Secretaries.
(v) an
incumbency
certificate
signed by the
Secretary or an Assistant
Secretary and one other officer of the Company and each Guarantor
certifying
as to the names,
titles and true signatures of the officers of
the
Company or each
Guarantor authorized
to sign this Agreement
and the
Notes,
or the AI Guaranty
Agreement and the
Indemnity, Subrogation
and
Contribution Agreement (as the case may be), and the other
documents to be
delivered
hereunder.
(vi) a
certificate of the
Secretary of the Company and each Guarantor (A)
attaching
resolutions of the
Board of Directors of such Person evidencing
approval
of the transactions
2
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contemplated by this
Agreement and the
issuance of the Notes,
or the AI
Guaranty
Agreement and the Indemnity, Subrogation and Contribution
Agreement
(as the case may be), and the execution, delivery and
performance thereof,
and authorizing certain officers to execute and
deliver
the same, and certifying that such resolutions were duly and
validly
adopted and have not since been amended, revoked or rescinded,
and
(B)
certifying that no
dissolution or
liquidation
proceedings as to the
Company or
such Guarantor have been commenced or are contemplated.
(vii) an
Officer's Certificate on behalf of the Company and each
Guarantor
certifying
that (A) the representations and warranties contained in
Paragraph
8 shall be true on and as of the Date of Closing, except to the
extent of
changes caused by the transactions herein contemplated and (B)
there
shall exist on the Date of Closing no Event of Default or
Default.
(viii)
corporate and tax good standing certificates as to the Company
and
each
Guarantor,
from their
respective
jurisdiction
of organization or
incorporation.
(ix)
Certified copies of
Requests for Information or Copies (Form UCC 11)
or
equivalent reports
listing all effective
financing statements
which
name the
Company or any
Guarantor (under its
present name and
previous
names) as
debtor and which are filed in the offices of the Secretaries of
State
(or equivalent official) of their respective jurisdiction of
organization or
incorporation,
together with copies of such financing
statements.
(x) such
additional documents
or certificates with
respect to such legal
matters or
corporate or other proceedings related to the transactions
contemplated hereby as may be reasonably requested by such
Purchaser.
3B.
Opinion of Purchaser's
Special Counsel. Such Purchaser shall have
received from special counsel for it in connection with this transaction, a
favorable opinion satisfactory to such Purchaser as
to such matters incident to
the matters herein contemplated, as it may
reasonably request.
3C.
Purchase Permitted By Applicable Laws. The purchase of and payment
for
the Notes to be purchased by such
Purchaser on the Date
of Closing on the terms
and conditions herein provided (including the use of the proceeds
of such Notes
by the Company) shall not violate any
applicable law or governmental regulation
(including, without limitation, Section 5
of the Securities Act or Regulation T,
U or X of the Board of Governors of the Federal
Reserve System) and shall not
subject such Purchaser to any tax, penalty
or liability under or pursuant to any
applicable law or regulation.
3D.
Payment of Fees. The
Company shall have paid to the Purchasers their
pro rata shares of a structuring fee in the
aggregate amount of $30,000.
3
<PAGE>
4.
PREPAYMENTS.
The Notes shall be
subject to prepayment with respect to
the required prepayments specified in Paragraph 4A and the
optional prepayments
permitted by Paragraph 4B.
4A.
Required Prepayments. Until the Notes shall be paid in full,
the
Company shall apply to the prepayment of the Notes,
without Yield-Maintenance
Amount, the sum of $50,000,000 on October
25 in each of the years 2013 and 2015,
inclusive, and such principal amounts of the Notes, together with interest
thereon to the prepayment dates, shall become due on such
prepayment
dates;
provided that upon any partial prepayment of the Notes pursuant
to Paragraph 4B
or purchase of the Notes pursuant to
Paragraph 4E, the principal amount of each
required prepayment of the Notes becoming due under this
Paragraph 4A on
and
after the date of such prepayment or purchase shall be reduced in the same
proportion as the aggregate unpaid
principal amount of the Notes is reduced as a
result of such prepayment or purchase.
The remaining
principal amount of the
Notes, together with interest accrued
thereon, shall become
due on the maturity
date of the Notes.
4B.
Optional Prepayment With Yield-Maintenance Amount. The Notes shall be
subject to prepayment, in whole at any time or from
time to time in part
(in
multiples of $1,000,000 and integral
multiples of $100,000 in excess thereof) at
the option of the Company, at 100% of the principal amount so prepaid plus
interest thereon to the prepayment date and
the Yield-Maintenance
Amount, if
any, with respect to each Note. Any partial
prepayment of the
Notes pursuant to
this Paragraph 4B shall be applied in
satisfaction
of required payments of
principal on a pro rata basis.
4C.
Notice of Optional
Prepayment.
The Company shall give
the holder of
each Note irrevocable written notice of any prepayment
pursuant to Paragraph 4B
not less than 5 Business Days prior to the prepayment date, specifying such
prepayment date and the principal
amount of the Notes,
and of the Notes held by
such holder, to be prepaid on such date and
stating that such
prepayment is to
be made pursuant to Paragraph 4B. Notice of prepayment having been given as
aforesaid, the principal amount of the Notes
specified in such notice, together
with interest thereon to the prepayment date and together with the
Yield-Maintenance Amount, if any, with respect thereto, shall become due and
payable by the Company on such prepayment
date. The Company
shall, on or before
the day on which it gives written notice of
any prepayment pursuant to Paragraph
4B, give telephonic notice of the principal
amount of the Notes to
be prepaid
and the prepayment date to each holder which shall
have designated a
recipient
of such notices in the Purchaser Schedule attached hereto or by notice in
writing to the Company.
4D.
Prepayment in
Connection with a Pro
Rata Prepayment Event.
(a) The
Company will, at least 10 Business Days
prior to any Pro Rata Prepayment Event,
give written notice of such Pro Rata
Prepayment
Event to each holder
of Notes.
Such notice shall contain and constitute an
offer to make a Pro Rata Prepayment,
as described in clause (b) below.
(b) The
offer contemplated
by clause (a) above
shall be an
irrevocable
offer to make a Pro Rata Prepayment on a date specified in such offer (the
"Proposed Prepayment Date") not less than thirty (30) days and not more than
sixty (60) days after the date of the
applicable Pro
4
<PAGE>
Rata Prepayment Event. Each such notice shall specify
such date, the aggregate
principal amount of the Notes to be prepaid
on such date, the principal amount
of each Note held by such holder to be
prepaid, and the
interest to be paid
on
the prepayment date with respect to such
principal amount being prepaid.
(c) A
holder of Notes may accept the offer to prepay made pursuant to
this
Paragraph 4D by causing a notice of such
acceptance
with respect thereto
to be
delivered to the Company not later than the
5th Business Day
following the date
of such holder's receipt of the applicable
offer. A failure by a
holder of the
Notes to timely respond to an offer to prepay made
pursuant to this
paragraph
shall be deemed to constitute an irrevocable rejection of such offer by
such
holder.
(d)
Prepayment of the
Notes to be prepaid
pursuant to this
Paragraph 4D
shall be at 100% of the principal
amount of such Notes,
together with
interest
on such Notes accrued to the date of prepayment (and without any
Yield-Maintenance Amount). The prepayment shall be made on the Proposed
Prepayment Date.
(e) Each
offer to prepay the Notes pursuant to this paragraph shall be
accompanied by an Officer's Certificate and dated the date of such offer,
specifying:
(i) in reasonable
detail, the nature and date or proposed
date of
the Pro
Rata Prepayment Event to which it relates;
(ii) the Proposed Prepayment Date;
(ii) that such offer is made pursuant to this paragraph;
(iii) the principal amount of each Note offered to be prepaid;
(iv) the last date upon which the offer can be accepted or
rejected,
and
setting forth the
consequences of failing to provide an acceptance or
rejection,
as provided in clause (c) of this paragraph; and
(v) the interest
that would be due on each Note offered to be
prepaid,
accrued to the Proposed Prepayment Date.
(f)
Notwithstanding the foregoing, if the Company gives advance
notice of
a Pro Rata Prepayment Event which does not actually occur for any reason and
such non-occurrence is not in violation of
the applicable terms of the Revolving
Credit Agreement (including, without limitation, the
abandonment by the Company
or a Subsidiary of the applicable sale, transfer or other disposition of
property, or abandonment of the incurrence of Indebtedness, which was
anticipated to trigger such Pro Rata
Prepayment Event),
then, the Company shall
deliver to each Significant Holder a notice to such
effect not later than
10
Business Days prior to applicable Proposed Prepayment Date, including a
certification from a Financial Officer that such
Pro Rata Prepayment Event will
not occur and that such non-occurrence is not in violation of the terms
of the
Revolving Credit Agreement and has not been
postponed or re-scheduled, and upon
timely
5
<PAGE>
receipt of such notice and certification, no Pro Rata Prepayment shall be
required in respect of such cancelled Pro
Rata Prepayment Event pursuant to this
Paragraph 4D.
(g) Any
partial prepayment of the Notes pursuant to this Paragraph 4D
will
be applied in satisfaction of required payments of principal on a pro rata
basis.
4E.
Partial Payments Pro
Rata. Upon any partial
prepayment of the
Notes
pursuant to Paragraph 4A, 4B or 4D, the principal amount so prepaid shall be
allocated to all Notes at the time
outstanding
in proportion to the
respective
outstanding principal amounts thereof.
4F.
Retirement of Notes.
The Company shall not,
and shall not permit the
Subsidiaries or their Affiliates to, prepay or otherwise
retire in whole or
in
part prior to their stated final maturity
(other than by prepayment pursuant to
Paragraph 4A, 4B or 4D or upon acceleration of such final
maturity pursuant
to
Paragraph 7A), or purchase or otherwise
acquire, directly or
indirectly, Notes
held by any holder unless the Company,
its Subsidiaries or
its Affiliates shall
have offered to prepay or otherwise retire
or purchase or otherwise acquire, as
the case may be, the same proportion of the
aggregate principal
amount of Notes
held by each other holder of Notes at the
time outstanding
upon the same
terms
and conditions. Any Notes so prepaid or
otherwise retired or purchased or
otherwise acquired by the Company or any
Subsidiaries or Affiliates shall not be
deemed to be outstanding for any purpose
under this Agreement.
5.
AFFIRMATIVE COVENANTS.
So long as any Note or
amount owing under this
Agreement shall remain unpaid, the Company
covenants and agrees that:
5A.
Financial Statements. The Company will deliver to each
Significant
Holder in duplicate:
(i) no later than the earlier of (i) 10 days after the date that
the
Company is
required to file a report on Form 10-Q with the Securities and
Exchange
Commission in
compliance
with the reporting requirements of
Section 13
or 15(d) of the
Securities Exchange
Act of 1934,
as amended
(whether
or not the Company is so subject to such reporting
requirements),
and (ii)
45 days after the end of each of the first three fiscal
quarters
of each
fiscal year of the Company, its consolidated balance sheet and
related
statements of income,
retained earnings and
cash flows as of the
end of and
for such fiscal
quarter and the then
elapsed portion of the
fiscal
year, setting forth in
each case in
comparative form the
figures
for the
corresponding period or periods of (or, in the case of the
balance
sheet, as
of the end of) the previous fiscal year, all certified by one
of
its
Financial Officers as
presenting fairly in
all material respects the
financial
condition and results of operations of the Company and its
Consolidated Subsidiaries on a consolidated basis in accordance
with GAAP,
subject to
normal year-end audit adjustments and the absence of footnotes;
(ii) no later than the
earlier of (i) 10 days after the date
that
the
Company is required to file a report on Form 10-K with the
Securities
and
Exchange Commission in
6
<PAGE>
compliance
with the reporting
requirements of
Section 13 or 15(d) of the
Securities
Exchange Act of 1934, as amended (whether or not the Company is
so subject
to such reporting requirements), and (ii) 90 days after the end
of each
fiscal year of the Company, its audited consolidated balance
sheet
and
related statements of
income, retained
earnings and cash flows as of
the end of
and for such year,
setting forth in each
case in
comparative
form
the figures for the previous fiscal year, all reported on by
PricewaterhouseCoopers
LLP or other
independent public
accountants
of
recognized
national
standing
(without
a "going concern" or like
qualification or
exception and without any qualification or exception as
to the
scope of such audit) to the effect that such consolidated
financial
statements
present fairly in all material respects the financial condition
and
results of operations of the Company and its Consolidated
Subsidiaries
on a
consolidated basis in accordance with GAAP;
(iii) promptly after the same become publicly available, copies of
all
periodic and other reports, proxy statements and other materials
filed
by
the Company or any Subsidiary with the Securities and Exchange
Commission, or any
Governmental Authority succeeding to any or all of the
functions
of said Securities and Exchange Commission, or with any
national
securities
exchange, or distributed by the Company to its shareholders
generally,
as the case may be;
(iv) concurrently
with any delivery of
financial statements
under
clause (i)
or (ii) above, a
certificate
of a Financial Officer of the
Company
(a) certifying as to whether a Default has
occurred and, if a
Default
has occurred,
specifying the details thereof and any action taken
or
proposed to be taken with respect thereto, (b) setting forth
reasonably
detailed
calculations
demonstrating compliance with Paragraphs 6A, 6E, 6H
and 6I
hereof and (c) stating whether any change in GAAP or in the
application thereof
has occurred since the date of the Company's audited
financial
statements
referred to in
Paragraph 8B and, if any such change
has
occurred, specifying the effect of such change on the financial
statements
accompanying such certificate;
(v) concurrently
with any delivery of
financial statements
under
clause
(ii) above, a certificate of the accounting firm that reported on
such
financial statements
stating whether they
obtained knowledge during
the
course of their examination of such financial statements of any
Default
or Event of
Default (which certificate may be limited to the
extent
required by accounting rules or guidelines);
(vi) promptly after the same become publicly available, copies of
all
periodic and other reports, proxy statements and other materials
filed
by
the Company or any Subsidiary with the Securities and Exchange
Commission, or any
Governmental Authority succeeding to any or all of the
functions
of said Commission, or with any national securities exchange,
or
distributed by the Company to its shareholders generally, as the case may
be;
7
<PAGE>
(vii) promptly upon receipt thereof, a copy of the report submitted
to the
Company by independent
accountants in connection with the regular
annual
audit made by them of the annual financial statements of the
Company;
and
(viii) promptly
following
any request therefor, such other
information regarding
the operations, business affairs and financial
condition
of the Company or any
Subsidiary, or
compliance with the terms
of any
Transaction
Document, as any Significant Holder may reasonably
request.
5B.
Information Required
by Rule 144A. The Company will, upon the request
of the holder of any Note, provide such
holder, and any qualified institutional
buyer designated by such holder,
such financial and
other information as
such
holder may reasonably determine to be necessary in order
to permit
compliance
with the information requirements of Rule 144A under the Securities Act in
connection with the resale of Notes, except at such times as the Company is
subject to the reporting requirements of section 13 or 15(d) of the
Exchange
Act. For the purpose of this Paragraph 5B, the term "qualified institutional
buyer" shall have the meaning specified in
Rule 144A under the Securities Act.
5C.
Notices of Material
Events. If, to the knowledge of any Financial
Officer or other executive officer of Company, any of the following events
has
occurred:
(a) any
Default or Event of Default;
(b) the
filing or commencement
of any action,
suit or proceeding by or
before any
arbitrator or Governmental Authority against or affecting the
Company or
any Affiliate
thereof that,
if adversely
determined,
could
reasonably
be expected to result in a Material Adverse Effect;
(c) any
ERISA Event (as defined in the Revolving Credit Agreement) that,
alone or
together with any other ERISA Events (as defined in the
Revolving
Credit
Agreement)
that have occurred, could reasonably be expected to
result in
liability of the Company or its Subsidiaries in an aggregate
amount
exceeding $10,000,000; or
(d) any
other development that results in, or could reasonably be
expected
to result
in, a Material Adverse Effect;
then the Company will furnish to each
holder of the Notes prompt written notice
of such occurrence. Each notice delivered under this paragraph shall be
accompanied by a statement of a Financial
Officer setting forth the details of
the event or development requiring such notice and any
action taken or proposed
to be taken with respect thereto.
5D.
Inspection
of Property; Books and Records. (a) The Company will
maintain or cause to be maintained the books of record and account of the
Company and each Guarantor and other
Consolidated
Subsidiary, in good
order in
accordance with sound business
8
<PAGE>
practice so as to permit its financial statements to be prepared in
accordance
with generally accepted accounting
principles.
(b) The
Company will permit any Person designated by any holder of Notes
in writing, at such holder's expense (or, if
an Event of Default does exist, at
the Company's expense), to visit and inspect any of the
properties of and
to
examine the corporate books and financial
records of the Company and make copies
thereof or extracts therefrom and to
discuss the affairs,
finances and accounts
of the Company with its principal officers and its independent public
accountants, all at such reasonable times and as often as such holder may
reasonably request; provided that nothing in this
paragraph shall
require the
Company or any Guarantor to disclose any
confidential or proprietary information
constituting trade secrets.
(c)
With the consent of the Company (which consent will not be
unreasonably withheld) or, if an Event of Default has occurred and is
continuing, without the requirement of any
such consent, the Company will permit
any Person designated by any holder of Notes in writing, at such holder's
expense (or, if an Event of Default does
exist, at the
Company's expense),
to
visit and inspect any of the properties of and to examine the
corporate books
and financial records of any Guarantor or
other Consolidated Subsidiary and make
copies thereof or extracts therefrom and to discuss the
affairs, finances
and
accounts of such Guarantor or other Consolidated Subsidiary with its and the
Company's principal officers and the
Company's independent
public accountants,
all at such reasonable times and as often
as such holder may reasonably request;
provided that nothing in this paragraph shall require the Company or any
Guarantor to disclose any confidential or
proprietary
information
constituting
trade secrets.
5E.
[INTENTIONALLY OMITTED]
5F
Covenant to Secure Note Equally. The Company covenants that, if it or
any Subsidiary shall create or assume any Lien upon any
of their property
or
assets, whether now owned or hereafter
acquired, other than
Liens permitted by
the provisions of Paragraph 6B (unless
prior written consent
to the creation or
assumption thereof shall have been
obtained pursuant to Paragraph 12C), the
Company will make or cause to be made
effective provision whereby the Notes will
be secured by such Lien equally and ratably
with any and all other
Indebtedness
thereby secured so long as any such
other Indebtedness shall be so secured;
provided that the creation and maintenance of such equal and
ratable Lien shall
not in any way limit or modify the right of
the holders of the
Notes to enforce
the provisions of Paragraph 6B.
Notwithstanding the foregoing, at no time shall
the Company, any Guarantor or any other
Subsidiary
create or assume any
Lien
upon any of their property or assets,
whether now owned or
hereafter
acquired,
securing any obligations in respect of the
Revolving Credit
Agreement (other
than those permitted by the provisions of
clause (k) of Paragraph 6B).
5G.
Maintenance of Properties; Compliance with Laws. The Company will,
and
will cause each Subsidiary to, (i) keep and maintain all
property material
to
the conduct of its business in good working
order and condition,
ordinary wear
and tear excepted; except for such cases of
non-compliance that, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect; and (ii) comply with all
laws, rules, regulations and orders
9
<PAGE>
of any Governmental Authority applicable to it, its
operations or its property,
except where the failure to do so,
individually or in the
aggregate, could
not
reasonably be expected to result in a
Material Adverse Effect.
5H.
Insurance.
The Company will, and will cause each Subsidiary to,
maintain, with financially sound and
reputable insurance
companies,
insurance
(a) against such casualties, contingencies and risks (and with such risk
retentions), (b) of such types, and (c) in such amounts as shall be customary
for companies of established reputation engaged in the same or similar
businesses, and will furnish, and cause each Subsidiary to furnish, to the
Required Holders (upon request), information in reasonable detail as to the
insurance carried by it.
5I. ERISA.
(i) Compliance. The Company will, and will cause each ERISA
Affiliate to, at all times with respect to
each Plan, make timely
payments of
contributions required to meet not less than the
minimum funding
standard set
forth in ERISA or the Code with respect thereto and, with respect to each
Multiemployer Plan, make timely payment of
contributions
required to be
paid
thereto as provided by Section 515 of ERISA
and comply with all other provisions
of ERISA, except for such failures to make
contributions and failures to comply
as would not have Material Adverse
Effect.
(ii) Non-US Pension
Plans. The Company will, and will cause each
Subsidiary
to, make all required payments in respect of funding any non-US
pension
Plan applicable to such Person and otherwise fully comply with
all
applicable
laws, statutes,
rules and regulations
governing or
affecting
such
non-US pension Plan if the failure to make such payments or so
comply
could
reasonably be expected to have a Material Adverse Effect.
5J.
Payment of Notes and Maintenance of Office. The Company will
punctually pay, or cause to be paid, the
principal and interest (and premium, if
any) to become due in respect of Notes
according to the terms
thereof and will
maintain an office at the address of the
Company set forth in Paragraph 12H
hereof where notices, presentations and demands in respect hereof or
the Notes
may be made upon it. Such office will be
maintained
at such address until
such
time as the Company will notify the holders of the Notes of any change of
location of such office.
5K.
Environmental
Laws. (i) The Company will, and will cause each
Subsidiary to, (a) comply with Environmental Laws applicable to
it, and obtain,
comply with and maintain any and all
Environmental
Permits necessary for its
operation as conducted and as planned;
and (b) take all
reasonable
efforts to
ensure that all tenants, subtenants, contractors, subcontractors and invitees
comply with all Environmental Laws, and
obtain, comply with and maintain any and
all Environmental Permits applicable to any
of them insofar as any failure to so
comply, obtain or maintain reasonably
could be expected to adversely affect the
Company or any of its Subsidiaries. For purposes of this Paragraph 5K,
non-compliance shall be deemed not to constitute a breach of this covenant
provided that, upon learning of any actual or
suspected noncompliance, the
Company shall promptly undertake or cause
to be undertaken reasonable efforts to
achieve compliance, and provided further,
that, in any case, such noncompliance,
and any other noncompliance with any
Environmental Law,
individually or in the
aggregate, could not reasonably be expected to result in a Material
Adverse
Effect.
10
<PAGE>
(ii) The Company will,
and will cause each
Subsidiary to,
promptly
comply
with all orders and
directives
of all Governmental Authorities
regarding
Environmental
Laws, other than such
orders or directives as to
which an
appeal has been timely and promptly taken in good faith,
provided
that no
Default will arise
under this clause to the extent the failure to
comply
with any or all such
appealed orders or directives could not
reasonably
be expected to result in a Material Adverse Effect.
5L. Use of
Proceeds. The Company
will use the proceeds of the sale of the
Notes only to refinance Indebtedness under the Revolving Credit Agreement and
for general corporate purposes.
5M.
Further Assurances.
The Company will, and
will cause each Subsidiary
to, execute any and all further documents,
agreements and
instruments, and take
all further action that may be required under applicable law, or that the
Required Holders may reasonably request, in
order that the Guaranty Requirement
shall be satisfied at all times.
5N.
Existence; Conduct of
Business. The Company will, and will cause each
Subsidiary to, do or cause to be done all
things necessary to
preserve, renew
and keep in full force and effect its legal
existence and the rights, licenses,
permits, privileges, franchises, patents, copyrights,
trademarks and tradenames
material to the conduct of the business of
the Company and
Subsidiaries,
taken
as a whole; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation, dissolution or other transaction permitted under
Paragraph 6C.
5O.
Payment of Obligations. The Company will, and will cause each
Subsidiary to, pay its Indebtedness and
other obligations (including liabilities
in respect of any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority),
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings and the Company or such Subsidiary has set aside on its books
adequate reserves with respect thereto in
accordance with GAAP or (b) failure to
pay could not reasonably be expected to
result in a Material Adverse Effect.
6.
NEGATIVE COVENANTS. So long as any Note or amount
owing under this
Agreement shall remain unpaid, the Company
covenants and agrees that:
6A. Subsidiary
Indebtedness. The sum
of (a) the total Indebtedness of all
Consolidated Subsidiaries (excluding (i)
Indebtedness under this Agreement, (ii)
Indebtedness existing on January 8, 2004 and set forth
on Schedule 6A,
(iii)
Indebtedness owed to the Company or to a Subsidiary, (iv) reimbursement
obligations in respect of undrawn letters of credit incurred in the ordinary
course of business and (v) Indebtedness of any Guarantor) plus (b) the
consideration (other than any note of a
Subsidiary that serves as a conduit in a
sale or financing transaction with respect to Receivables) directly or
indirectly received by any Consolidated
Subsidiary from any
Person (other than
the Company or a Consolidated
Subsidiary)
11
<PAGE>
for Receivables sold, which Receivables
remain uncollected at such time, will at
no time exceed $100,000,000.
6B.
Negative Pledge.
Neither the Company nor any Consolidated Subsidiary
will create, incur, assume or suffer to
exist any Lien on any asset now owned or
hereafter acquired by it, except:
(a) any
Lien created under the Transaction Documents;
(b) Liens
existing on the date hereof, securing Indebtedness outstanding
on the
Date of Closing, and set forth on Schedule 6B;
(c) any
Lien on any asset
securing Indebtedness
incurred or assumed
for
the
purpose of financing
all or any part of the
cost of acquiring
such
asset,
provided that such Lien attaches to such asset concurrently with
or
within 180
days after the acquisition thereof;
(d) any
Lien existing
on any asset of any
corporation
at the time such
corporation becomes a Consolidated Subsidiary, provided that (i)
such Lien
is not created
in contemplation of or
in connection with such corporation
becoming a
Consolidated Subsidiary, (ii) such Lien shall not apply to
any
other
property or assets of
the Company or any
Subsidiary and (iii) such
Lien shall
secure only those obligations which it secures on the date such
corporation becomes a Consolidated Subsidiary and extensions,
renewals and
replacements thereof that do not increase the outstanding principal
amount
thereof;
(e) any
Lien on any asset of
any corporation
existing at the time such
corporation is
merged or consolidated with or into a Consolidated
Subsidiary
and not created in contemplation of such event; provided that
such Lien
shall not extend to other assets of such Consolidated
Subsidiary
and shall
secure only those
obligations
which it secures on
the date of
such
merger or
consolidation and
extensions, renewals
and replacements
thereof
that do not increase the outstanding principal amount thereof;
(f) any
Lien existing on any asset prior to the acquisition thereof by
the
Company or
any Consolidated Subsidiary and not created in contemplation of
such
acquisition;
(g)
any Lien arising out of the refinancing, extension, renewal or
refunding
of any Indebtedness
secured by any Lien permitted by any of the
foregoing
clauses of this
paragraph; provided
that such Indebtedness
is
not
increased and is not secured by any additional assets;
(h) Liens
for taxes that are not yet subject to penalties for non-payment
or are
being contested in good faith, or minor survey exceptions or minor
encumbrances,
easements or other
rights of others
with respect to, or
zoning or
other governmental
restrictions as to the use of, real property
that do
not, in the aggregate,
materially impair the use of such property
in the
operation of the businesses of the Company and the
Subsidiaries;
12
<PAGE>
(i) (i)
Liens arising out of
judgments or awards
against the Company
or
any
Subsidiary
with respect to which such Person is, in good faith,
prosecuting an appeal or proceedings for review and (ii) Liens
incurred by
the
Company or any
Subsidiary
for the purpose of obtaining a stay or
discharge
in any legal
proceeding to which the Company or any Subsidiary
is a
party; provided that the Liens permitted by the foregoing clause
(ii)
shall not
secure obligations in an aggregate principal amount outstanding
in excess
of 5.0% of Consolidated Tangible Net Worth;
(j) (i)
carriers', warehousemen's, mechanics', materialmen's,
repairmen's,
landlord's
or other like Liens arising in the ordinary course of business
for sums
which are not overdue
for a period of more than 60 days or which
are being
contested in good faith by appropriate proceedings, (ii)
pledges
or
deposits in connection with workers' compensation, unemployment
insurance
and other social
security legislation and deposits securing
liability
to insurance carriers under insurance or self-insurance
arrangements, and
(iii) deposits to secure the performance of bids, trade
contracts
(other than for
Indebtedness),
leases (other than
Capitalized
Lease
Obligations),
statutory obligations, surety and appeal bonds,
performance bonds and
other obligations of a
like nature incurred in the
ordinary
course of business;
(k)
Liens (if any) arising pursuant to Section 5 of the Subsidiary
Guarantee
Agreement or Section 3 of the Indemnity, Subrogation and
Contribution Agreement
(each used in this clause as defined in the
Revolving
Credit Agreement) as in effect on the
Closing Date, and
Liens
that
constitute rights of
set-off in connection with the Revolving Credit
Agreement;
provided that the Company and Guarantors shall not, at any
time,
maintain aggregate cash balances in excess
of $100,000,000 in
all
accounts
with the lenders under the Revolving Credit Agreement (or
Affiliate
thereof) that are subject to such set-off or similar rights;
and
(l)
Liens not otherwise permitted by the foregoing clauses of this
paragraph
securing Indebtedness (other than Indebtedness in respect of
the
Revolving
Credit Agreement) in an aggregate principal amount outstanding
not to
exceed 5.0% of Consolidated Tangible Net Worth.
6C.
Consolidations, Mergers and Sales of Assets. The Company will not,
and
will not permit any Subsidiary to,
consolidate or merge
with, or sell, lease or
otherwise dispose of any of its assets to, or, in the case of a Subsidiary,
issue or sell any Equity Interests in such
Subsidiary to, any Person (other than
the Company or a Subsidiary), except that, so long as no Default would
result
under any other provision of this
Agreement:
(a) any
Person may merge with and into the Company or any Subsidiary
Guarantor;
provided that the
Company or such Subsidiary Guarantor, as the
case may
be, is the surviving Person;
(b) any
Person other than the Company or a Subsidiary Guarantor may merge
with and
into any Subsidiary that is not a Subsidiary Guarantor;
provided
that such
Subsidiary
13
<PAGE>
is the
surviving Person;
(c)
subject to Paragraph 6G, the Company or any Subsidiary may sell,
lease
or
otherwise dispose of any of its assets to the Company or any other
Subsidiary;
(d) the
Company or any Subsidiary may sell, lease or otherwise dispose of
any of its
inventory in the ordinary course of business and any of
its
assets
which are obsolete, excess or unserviceable;
(e)
any Foreign Subsidiary may sell Receivables in one or more
transactions in the
ordinary course of
business and consistent with past
practice,
the proceeds of which transactions are used for working
capital;
(f) the
Company and the Subsidiaries may carry out sale and
leaseback
transactions permitted under Paragraph 6F;
(g) the
Company or any Subsidiary may sell or otherwise dispose of Equity
Interests
in any Subsidiary,
and any Subsidiary may issue and sell its
Equity
Interests,
to one or more Persons
other than the Company
and the
Subsidiaries in an aggregate amount for all such transactions that will
not result
in Subsidiaries in which Persons other than the Company and the
Subsidiaries hold
minority interests representing more than 7.5% of
Consolidated Tangible Net Worth; and
(h) the
Company or any Subsidiary may sell, lease or otherwise dispose of
any of its
assets for fair value
(other than as
permitted by clauses (a)
through
(g) above);
provided that (i) no such transaction, when taken
together
with all previous such transactions, shall result in all or
substantially all of the assets of the Company and the Subsidiaries
having
been sold
or otherwise disposed
of, (ii) no such transaction shall result
in a
reduction in the percentage of the Equity Interests of any
Subsidiary
owned
directly or indirectly by the Company unless all the Equity
Interests
in such Subsidiary
owned directly or
indirectly by the Company
are
disposed of and (iii) when applicable, the Net Proceeds (as defined
in
the
Revolving Credit Agreement) from any such transaction shall be used
in
in such a
manner as to comply with the provisions of (y) Section
2.10(c)
of
the Revolving Credit Agreement (or any successor or equivalent
provision)
and (z) Paragraphs 4D and 5E of this Agreement.
6D.
Transactions
with Affiliates. The Company will not, and will not
permit any Subsidiary to, directly or indirectly,
pay any funds to or
for the
account of, make any investment in or engage in any transaction with any
Affiliate (other than the Company or a
Subsidiary none of the Equity Interests
in which are owned directly or indirectly
by an Affiliate of the Company that is
not a Subsidiary), except that:
(a) the
Company may declare
and pay a Restricted
Payment permitted by
Paragraph
6E;
14
<PAGE>
(b)
the Company or any Subsidiary may make payments or provide
compensation, and reimburse related expenses, for services rendered
by (i)
any
Affiliate who is an officer, director or employee of the
Company or
any
Subsidiary and (ii) J. Spencer Standish;
(c) the
Company or any
Subsidiary may make
any investment
permitted by
Paragraph
6G;
(d) the
Company or any
Subsidiary may make sales to or purchases from any
Affiliate
and, in connection
therewith, extend
credit, may make payments
or provide
compensation for
services rendered by
any Affiliate, and
may
engage in
any other transaction
with any Affiliate,
in each case in
the
ordinary
course of business and consistent with past practice and on
terms
and
conditions at least as favorable to the Company or such
Subsidiary as
the
terms and conditions that would apply (i) in an arm's length
transaction with a
Person not an Affiliate or (ii) in the case of a
transaction relating to pension, deferred compensation, insurance
or other
benefit
plans with an Affiliate employee, in a similar transaction with
a
non-Affiliate employee; and
(e) the
Company or any
Subsidiary
may engage in
transactions
with the
entities
listed on Schedule 6D to the extent consistent with past
practice.
6E.
Restricted
Payments. The Company will not declare or make any
Restricted Payment unless, immediately after giving effect to such
Restricted
Payment, (a) the Leverage Ratio does not
exceed 2.25 to 1.00 and (b) no Default
shall have occurred and be continuing.
6F.
Limitations
on Sale-Leasebacks. The Company will not, and will
not
permit any Subsidiary to, enter into any
arrangement,
directly or
indirectly,
with any Person whereby the Company or a Subsidiary shall sell or transfer
property, whether now owned or hereafter
acquired, and then or
thereafter rent
or lease as lessee such property or any
part thereof or any other property which
the Company or any Subsidiary intends to use for substantially
the same purpose
or purposes as the property being sold or transferred, unless (a) such
transaction is effected within 180 days of the property
being placed in service
by the Company or such Subsidiary and
results in a lease obligation incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring
such property, (b) when applicable, the Net Proceeds (as defined in the
Revolving Credit Agreement) from any such
transaction
shall be used in such
a
manner as to comply with the provisions of
(i) Section 2.10(c) of
the Revolving
Credit Agreement (or any successor or
equivalent provision)
and (ii) Paragraphs
4D and 5E of this Agreement, or (c) after giving effect to any such sale or
transfer, the aggregate fair market value
of all property of the Company and its
Subsidiaries so sold or transferred after the date hereof,
and not permitted
under clauses (a) or (b) above, does not
exceed $75,000,000.
6G.
Investments, Loans, Advances, Guarantees and Acquisitions. The
Company
will not, and will not permit any Subsidiary to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a Subsidiary
prior to such merger) any Equity
Interests,
evidences of
Indebtedness or other
securities (other than any Hedging
Agreement entered into in
15
<PAGE>
the ordinary course of business) of, make or permit to exist any loans or
advances (excluding accounts receivable arising out of the sale of goods
and
services reflected on the Company's consolidated balance sheet as current
assets) to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any
other Person, or
purchase or otherwise
acquire (in one transaction or a series of
transactions) any assets of any other
Person constituting a business unit,
except:
(a)
Permitted Investments;
(b) (i)
investments
existing on the date
hereof in the capital
stock of
Subsidiaries or in Indebtedness of Subsidiaries and (ii) other
investments
existing
on the date hereof and set forth on Schedule 6G;
(c)
acquisitions of assets of or Equity Interests in other Persons with
an
aggregate
fair market value for all such acquisitions not to exceed
$250,000,000 for
consideration
consisting solely of
common stock of the
Company;
(d)
acquisitions of assets
of or Equity Interests in other Persons if, at
the time
of and after giving pro forma effect to each such acquisition
and
any
related incurrence of
Indebtedness,
the Leverage Ratio is
less than
2.50 to
1.00;
(e) (i)
any investment,
loan or advance by the
Company or a Guarantor in
or to the
Company or another Guarantor, (ii) any investment, loan or
advance by
a Subsidiary that is
not a Guarantor in or to the Company or a
Guarantor,
(iii) any investment, loan or advance by any Subsidiary that is
not a
Guarantor in or to any other Subsidiary that is not a Guarantor
and
(iv) any
investment, loan or advance by the Company or any Guarantor in
or
to any
Subsidiary that is not a Guarantor; provided that each investment,
loan or
advance referred
to in the preceding clause (iv) must be in an
outstanding
principal amount
which,
together
with the aggregate
outstanding principal amount of all other investments, loans and advances
permitted
by such clause (iv), shall not exceed $75,000,000 at any time;
(f)
Guarantees
by a Subsidiary
constituting
Indebtedness
permitted by
Paragraph
6A (provided that a Subsidiary shall not Guarantee any
obligation
of the Company unless such Subsidiary also becomes a
Guarantor
in respect
of the Guarantied Obligations) and Guarantees by the Company of
Indebtedness of a Subsidiary permitted by Paragraph 6A;
(g)
investments
received
in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and
disputes with,
customers
and suppliers, in each case in the ordinary course of business;
(h) loans
or other advances to
employees consistent
with past
practice;
and
(i) other
investments not permitted under clauses (a) through (h) above
in
an
aggregate amount not exceeding $75,000,000 at any time.
16
<PAGE>
6H.
Leverage Ratio. The
Company will not permit the Leverage Ratio on any
date to exceed 3.00 to 1.00.
6I.
Interest Coverage Ratio. The Company will not permit the ratio of
Consolidated EBITDA to Consolidated Interest Expense for any period of four
consecutive fiscal quarters, commencing with the period ending
September 30,
2004, to be less than 3.00 to 1.00.
6J.
Lines of Business. The Company will not, and will not permit any
Subsidiary to, engage at any time in any business
or business activity
other
than a business conducted by the Company
and its Subsidiaries on the date hereof
and business activities reasonably related
thereto.
6K.
Terrorism Sanctions
Regulations.
The Company will not,
and will not
permit any Guarantor or other Material Subsidiary to (a) become a Person
described or designated in the Specially Designated Nationals and Blocked
Persons List of the Office of Foreign Assets Control or in Section 1 of
Executive Order No. 13,224 of September 24, 2001, Blocking Property and
Prohibiting Transactions with Persons Who
Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001),
as amended,
or (b) engage in
any
dealings or transactions with any such Person in violation
of applicable law,
rule or regulation.
7. EVENTS
OF DEFAULT.
7A.
Acceleration.
If any of the
following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by
operation of law
or
otherwise):
(i) default in the payment of any principal of, or
Yield-Maintenance
Amount
payable with respect to, any Note when the
same shall become due,
either by
the terms thereof or otherwise as herein provided; or
(ii) default in the
payment of any
interest on any Note for more
than five
(5) days after the same becomes due and payable; or
(iii) The Company
or any Subsidiary (a) shall fail to make any
payment
(whether of principal,
premium, fee or interest and regardless of
amount)
in respect of any Material Indebtedness, when and as the same
shall
become due and
payable, or (b) any
event or condition
occurs that
results in
any Material
Indebtedness becoming
due prior to its scheduled
maturity
or that enables or permits (with or without the giving of
notice,
the
lapse of time or both) the holder or holders of any Material
Indebtedness or any
trustee or agent on its or their behalf to cause any
Material
Indebtedness
to become due, or to require the prepayment,
repurchase, redemption
or defeasance thereof, prior to its scheduled
maturity;
provided that, this clause (b) shall not apply to secured
Indebtedness that
becomes due as a result of the voluntary sale or
transfer
of the property or assets securing such Indebtedness; or
17
<PAGE>
(iv) any
representation or
warranty made or deemed made by or on
behalf of
the Company
or any Subsidiary in or in connection with any
Transaction Document
(or any amendment or modification thereof or waiver
thereunder) or in any report, certificate, financial statement or other
document
furnished pursuant to or in connection with any Transaction
Document
or any amendment or
modification thereof
or waiver
thereunder,
shall
prove to have been
incorrect in any
material respect when
made or
deemed
made; or
(v) the Company fails to perform or observe any agreement
contained
in
Paragraphs 5C, 5L, 5N
(with respect to the Company's existence) or 6,
or in the
last sentence of Paragraph 5F; or
(vi) [INTENTIONALLY OMITTED]
(vii) the Company or any Guarantor fails to perform or observe
any
other
agreement, term or
condition contained herein or in any Transaction
Document
and such failure shall
continue unremedied for a period of 30
days after
notice thereof from the Required Holders to the Company (which
notice
will be given at the request of any holder of Notes); or
(viii) the Company or any Guarantor or Material Subsidiary shall
become
unable (or admit in writing its inability) to pay its debts as
such
debts
become due, or is generally not paying its debts as such debts
become
due; or
(ix) the Company or any Guarantor or Material Subsidiary shall (i)
voluntarily
commence any
proceeding
or file any petition seeking
liquidation,
reorganization or
other relief under any Federal, state or
foreign
bankruptcy, receivership, reorganization, compromise,
arrangement,
insolvency,
readjustment of debt,
dissolution or
liquidation or similar
law,
whether now or
hereafter in effect
(herein called the
"Bankruptcy
Law"),
(ii) consent to the
institution of, or fail to contest in a timely
and
appropriate manner, any proceeding or petition described in clause
(x)
of this
paragraph,
(iii) apply for or consent to the
appointment
of a
receiver,
trustee, custodian, sequestrator, conservator or similar
official
for the Company or any Guarantor or Material Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the
material
allegations of a
petition filed against
it in any such
proceeding, (v)
make a
general assignment
for the benefit of
creditors or (vi) take
any
action for
the purpose of effecting any of the foregoing; or
(x) an involuntary
proceeding shall be
commenced or an involuntary
petition
shall be filed seeking (i) liquidation, reorganization or other
relief in
respect of the Company, any Guarantor or any Material
Subsidiary
or its
debts, or of a substantial part of its assets, under any
Bankruptcy
Law
or (ii) the appointment of a receiver, trustee, custodian,
sequestrator,
conservator or
similar official for the Company, any
Guarantor
or any Material
Subsidiary
or for a substantial part of its
assets,
and, in any such case,
such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering
any of
the
foregoing shall be entered; or
18
<PAGE>
(xi) any order,
judgment or decree is
entered in any
proceedings
against
the Company or any Guarantor or Material Subsidiary decreeing the
dissolution, split-up
or divestiture of assets of the Company or any
Guarantor
or Material Subsidiary, and such order, judgment or decree
remains
unstayed and in effect for more than 60 days; or
(xii) one or more
judgments in an aggregate amount in excess of
$10,000,000 is
rendered against the
Company or any of the
Guarantors or
Subsidiaries, or any
combination
thereof, and the same shall remain
undischarged for a
period of 30 consecutive days during which execution
shall not
be effectively stayed, or any action shall be legally taken by
a
judgment
creditor to attach or
levy upon any assets of the Company or any
of the
Guarantors or Subsidiaries to enforce any such judgment; or
(xiii) (A) any Plan
shall fail to satisfy the minimum funding
standards
of ERISA or the Code
for any plan
year or part
thereof or a
waiver of
such standards or extension of any amortization period is
sought
or
granted under section 412 of the Code, (B) a notice of intent to
terminate
any Plan shall have been or is reasonably expected to be filed
with the
PBGC or the PBGC shall have instituted proceedings under ERISA
section
4042 to terminate or appoint a trustee to administer any Plan or
the PBGC
shall have notified
the Company or any
ERISA Affiliate
that a
Plan may
become a subject of such proceedings, (C) the aggregate "amount
of
unfunded benefit liabilities" (within the meaning of section
4001(a)(18) of ERISA) under all Plans, determined in accordance
with Title
IV of
ERISA, shall exceed $10,000,000 in respect of any single fiscal
year
or
$25,000,000 in the aggregate, (D) the Company, a Guarantor or any
ERISA
Affiliate
shall have
incurred or is reasonably expected to incur any
liability
pursuant to Title I or
IV of ERISA or the penalty or excise tax
provisions
of the Code relating to employee benefit plans, (E) the
Company,
a Guarantor or any ERISA Affiliate withdraws from any
Multiemployer Plan,
or (F) the Company,
a Guarantor
or any Subsidiary
establishes or amends
any employee welfare
benefit plan that provides
post-employment
welfare benefits
in a manner
that would
increase the
liability
of the Company, a
Guarantor or any Subsidiary thereunder; and
any
such event or events described in the foregoing clauses either
individually or
together with any other such event or events, could
reasonably
be expected to result in liability of the Company, a Guarantor
and
any of the Subsidiaries in an aggregate amount exceeding (y)
$10,000,000 in any fiscal year or (z) $25,000,000 in the aggregate;
or
(xiv) the AI
Guaranty Agreement shall cease to be, or shall be
asserted
by the Company or any
Guarantor not to be, a legal, valid and
binding
obligation of each Guarantor; or
(xv) a Change in Control shall occur;
then (a) if such event is an Event of
Default specified in clause (ix) or (x) of
this Paragraph 7A with respect to the Guarantors or the Company, all of the
Notes at the time outstanding shall automatically become immediately due and
payable, together with interest accrued thereon and the Yield-Maintenance
Amount, if any, with respect to each Note,
without presentment, demand,
19
<PAGE>
protest or notice of any kind, all of which are hereby
waived by the
Company,
and (b) with respect to any other event
constituting
an Event of Default,
the
Required Holder(s) may at its or their option, by notice in writing to the
Company, declare all of the Notes to be,
and all of the Notes shall thereupon be
and become, immediately due and payable
together with interest
accrued thereon
and together with the Yield-Maintenance Amount, if any, with respect to each
Note, without presentment, demand, protest or other notice of any
kind, all of
which are hereby waived by the Company.
The Company acknowledges, and the parties hereto agree,
that each holder of
a
Note has the right to maintain its
investment in the
Notes free from
repayment
by the Company (except as herein specifically provided for) and that the
provision for payment of the Yield-Maintenance Amount by the Company in the
event that the Notes are prepaid or are
accelerated
as a result of an
Event of
Default, is intended to provide
compensation for the
deprivation of such right
under such circumstances.
7B.
Rescission of Acceleration. At any time after any or all of
the Notes
shall have been declared immediately due and payable
pursuant to Paragraph
7A,
the Required Holder(s) may, by notice in writing to the
Company, rescind and
annul such declaration and its consequences if (i) the Company
shall have paid
all overdue interest on the Notes, the principal of and Yield-Maintenance
Amount, if any, payable with respect to any Notes which have become due
otherwise than by reason of such
declaration,
and interest on such overdue
interest and overdue principal and Yield-Maintenance Amount at the rate
specified in the Notes, (ii) the Company shall not have paid any amounts
which
have become due solely by reason of such declaration, (iii) all Events of
Default and Defaults, other than non-payment of amounts which have become
due
solely by reason of such declaration, shall have been cured or waived
pursuant
to Paragraph 12C, and (iv) no judgment or
decree shall have been entered for the
payment of any amounts due pursuant to the Notes or this Agreement. No such
rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right
arising therefrom.
7C.
Notice of Acceleration or Rescission. Whenever any Note shall be
declared immediately due and payable pursuant to Paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to Paragraph 7B, the
Company shall forthwith give written notice thereof to the
holder of each Note
at the time outstanding.
7D. Other
Remedies. If any Event
of Default or Default shall occur and be
continuing, the holder of any Note may
proceed to protect and enforce its rights
under this Agreement and such Note by
exercising such
remedies as are available
to such holder in respect thereof under
applicable law, either by suit in equity
or by action at law, or both, whether for specific performance of any covenant
or other agreement contained in this Agreement or in
aid of the exercise of any
power granted in this Agreement.
No remedy conferred in
this Agreement upon the
holder of any Note is intended to be
exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every
other
remedy conferred herein or now or hereafter
existing at law or in
equity or by
statute or otherwise.
20
<PAGE>
8.
REPRESENTATIONS,
COVENANTS AND WARRANTIES. The Company and Guarantors
represent, covenant and warrant as
follows:
8A.
Organization;
Authorization;
Enforceability. The Company and each of
the Subsidiaries is duly organized,
validly existing and
in good standing under
the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material
Adverse Effect, is qualified to do business,
and is in good standing, in every jurisdiction where such qualification is
required. The Transactions to be entered
into by the Company and the Guarantors
and are within their respective corporate powers and have been
duly authorized
by all necessary corporate and, if
required, stockholder
action. This Agreement
has been duly executed and delivered by the Company and the
Guarantors
and
constitutes, and each other Transaction Document to which the Company or any
Guarantor is to be a party, when executed and delivered by such Person,
will
constitute, a legal, valid and binding obligation of the Company or such
Guarantor, as the case may be, enforceable
in accordance with its terms, subject
to applicable bankruptcy, insolvency,
reorganization,
moratorium or other
laws
affecting creditors' rights generally and subject to general
principles
of
equity, regardless of whether considered in
a proceeding in equity or at law.
8B.
Financial Statements. The Company has heretofore furnished to the
Purchasers its consolidated balance sheet and statements of income, retained
earnings and cash flows (i) as of and for
the fiscal year ended
December 31,
2004, reported on by PricewaterhouseCoopers
LLP, independent public accountants,
and (ii) as of and for the fiscal
quarters and the portions of the fiscal
year
ended March 31, 2005 and June 30, 2005, certified by its chief financial
officer. Such financial statements present
fairly, in all material respects, the
financial position and results of operations
and cash flows of the
Company and
its Consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit
adjustments and the
absence of
footnotes in the case of the statements
referred to in clause (ii) above. Except
as described in the Company's Quarterly Reports on Form 10-Q for the
quarters
ended March 31, 2005 and June 30, 2005,
there has been no event, development or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect since December 31, 2004.
8C.
Actions Pending. Except as disclosed on Schedule 8C, there are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Company, threatened
against or affecting the Company or any of the Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material
Adverse Effect or (ii) that involve any
of
the Transaction Documents or the
transactions contemplated thereby.
8D.
Outstanding Indebtedness. Neither the Company, nor any Subsidiary,
has
outstanding any Material Indebtedness except as set forth
in Schedule 6A. There
exists no default under the provisions of any instrument evidencing such
Material Indebtedness or of any agreement
relating thereto.
21
<PAGE>
8E. Title
to Properties.
(a) The Company and
each Subsidiary,
has good
title to, or valid leasehold interests in, all its real and
personal properties
and assets material to its business,
except for minor
defects in title that do
not interfere with its ability to conduct
its business as currently conducted or
to utilize its properties and assets for
their intended purposes. All such owned
properties and assets, and all such
leasehold interests,
are free and clear
of
Liens, other than Liens expressly permitted
under Paragraph 6B.
(b) The
Company and each
Subsidiary,
owns, or is licensed to use,
all
trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Company
and Subsidiaries,
does not infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate,
could not reasonably
be
expected to result in a Material Adverse
Effect.
8F. Taxes.
The Company and each
Subsidiary has timely
filed or caused to
be filed all Tax returns and reports
required to have been filed and has paid or
caused to be paid all Taxes required to have been paid by it,
except (a) any
Taxes that are being contested in good
faith by appropriate
proceedings and for
which the Company or such Subsidiary, as
applicable, has set
aside on its books
adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a
Material Adverse Effect.
8G.
Conflicting Agreements and Other Matters. Neither the Company, nor
any
Subsidiary, is a party to any contract or
agreement or subject to any charter or
other corporate restriction which
materially and adversely affects its business,
property or assets, or financial
condition.
Neither the execution
nor delivery
of this Agreement or any other Transaction
Document, nor the offering, issuance
and sale of the Notes, nor fulfillment of nor compliance with the terms and
provisions hereof and of the Notes and
other Transaction Documents will conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the
properties
or assets of the
Company, any
Guarantor or any other Subsidiary, pursuant to, the charter or
by-laws of the
Company, any Guarantor or any other
Subsidiary, any award
of any arbitrator or
any agreement (including any agreement with
stockholders),
instrument, order,
judgment, decree, statute, law, rule or
regulation to which any the Company, any
Guarantor or any other Subsidiary is subject. Neither the Company, nor any
Subsidiary, is a party to, or otherwise
subject to any provision contained in,
any instrument evidencing Indebtedness of the Company, any Guarantor or any
other Subsidiary, any agreement relating thereto or any other contract or
agreement (including its charter) which limits the amount of, or
otherwise
imposes restrictions on the incurring of, Indebtedness of the Company or any
Guarantor of the type to be evidenced by the Notes,
except as set forth in
the
agreements listed in Schedule 8G attached
hereto.
8H.
Offering of Notes. None of the Company, or any Guarantor, or any
agent
acting on any of their behalf has, directly
or indirectly, offered
the Notes or
any similar security of the Company or any
Guarantor for sale to,
or solicited
any offers to buy the Notes or any similar security of the Company or any
Guarantor from, or otherwise approached or
negotiated with respect thereto with,
any Person other than the Purchaser(s), and
none of the Company or any Guarantor
or any agent acting on any of their
behalf has taken or will take any
action
which
22
<PAGE>
would subject the issuance or sale of
the Notes to the
provisions of Section 5
of the Securities Act or to the
provisions of any securities or Blue Sky law of
any applicable jurisdiction.
8I. Use of
Proceeds. The proceeds
from the sale of the Notes will be used
by the Company to refinance outstanding
indebtedness under the
Revolving Credit
Agreement and for general corporate
purposes. No part of the proceeds from
the
sale of the Notes hereunder will be used, directly or indirectly, for the
purpose of buying or carrying any margin
stock, except in
compliance
with the
provisions of applicable law, 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).
Margin stock does
not
and will not at any time constitute more than 25% of the value of the
consolidated assets of the Company and its Subsidiaries. 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.
8J. ERISA.
No accumulated funding deficiency (as defined in section 302 of
ERISA and section 412 of the Code),
whether or not waived,
exists with
respect
to any Plan (other than a Multiemployer
Plan). No liability to the PBGC has been
or is expected by the Company or any ERISA
Affiliate to be incurred with respect
to any Plan (other than a Multiemployer
Plan) by the Company,
any Subsidiary or
any ERISA Affiliate which is or would be materially adverse to the business,
condition (financial or otherwise) or
operations of the Company and Subsidiaries
taken as a whole. None of the Company, any Subsidiary, or any ERISA Affiliate
has incurred or presently expects to incur
any withdrawal
liability under Title
IV of ERISA with respect to any Multiemployer Plan which is or would be
materially adverse to the business, condition (financial or otherwise) or
operations of the Company and Subsidiaries taken as a whole. The execution
and
delivery of this Agreement and the issuance
and sale of the Notes will be exempt
from, or will not involve any transaction
which is subject to,
the prohibitions
of section 406 of ERISA and will not
involve any
transaction in connection with
which a penalty could be imposed under
section 502(i) of ERISA or a tax could be
imposed pursuant to section 4975 of the
Code. The
representation by the Company
and Guarantors in the next preceding sentence is made in reliance upon and
subject to the accuracy of the
representation in Paragraph 9B.
8K.
Governmental
Consent.
Neither
the nature of the Company or
Subsidiaries, nor any of their respective businesses or properties, nor any
relationship between the Company or
Subsidiaries, and any
other Person, nor any
circumstance in connection with the
offering, issuance,
sale or delivery of the
Notes is such as to require any
authorization,
consent, approval,
exemption or
other action by or notice to or filing with any court or administrative or
governmental body (other than routine
filings after the Date of Closing with the
Securities and Exchange Commission and/or state Blue Sky authorities) in
connection with the execution and delivery of this Agreement, the offering,
issuance, sale or delivery of the Notes or
fulfillment of or compliance with the
terms and provisions hereof or of the
Notes.
8L.
Compliance with Laws. The Company and each Subsidiary is in
compliance
with all laws, regulations and orders of any
Governmental Authority
applicable
to it or its property, except where the failure to be in compliance,
individually or in the aggregate,
could not reasonably
be expected to result in
a Material Adverse Effect.
23
<PAGE>
8M.
Environmental
Compliance. Neither
the Company nor any Subsidiary (i)
has failed to comply with any Environmental
Law or to obtain, maintain or comply
with any permit, license or other approval
required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any
Environmental
Liability, or (iv)
knows
of any basis for any Environmental
Liability, except, in each case, for failures
and liabilities that, individually or in
the aggregate, could
not reasonably be
expected to result in a Material Adverse
Effect.
8N.
Utility Company Status. None of the Company or the
Subsidiaries is a
(i) "holding company," a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" or of a "subsidiary
company" of a
"holding
company," as such terms are defined in the
Public Utility Holding Company Act of
1935, as amended or (ii) public
utility within the
meaning of the Federal Power
Act, as amended.
8O.
Investment Company Status. None of the Company or the
Subsidiaries is
an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or an
"investment adviser" within the meaning of the
Investment Advisers Act of 1940,
as amended.
8P. Rule
144A. The Notes are
not of the same class as securities of the
Company, if any, listed on a national
securities
exchange, registered under
Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system.
8Q.
Disclosure. Neither this Agreement nor any other document,
certificate
or statement furnished to any Purchaser by or on behalf of the
Company or
Guarantors in connection herewith (as modified or supplemented by other
information so furnished to the Purchasers)
contains any untrue
statement of a
material fact or omits to state a material
fact necessary in order to make the
statements contained herein and therein,
in light of the
circumstances
under
which they were made, not misleading;
provided, that, with
respect to projected
financial information, the foregoing shall be limited to
a representation
and
warranty that such information was prepared in good faith, subject to the
express qualifications set forth in such projections, based upon assumptions
believed by it to be reasonable at the
time.
8R.
Foreign Assets Control Regulations, Etc.
(a)
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.
(b) None
of the Company or
Guarantors, or any
other Subsidiary (i)
is a
Person described or designated in the
Specially Designated Nationals and Blocked
Persons List of the Office of Foreign Assets Control or in Section 1 of the
Anti-Terrorism Order or (ii) engages in
24
<PAGE>
any dealings or transactions with any such
Person. The Company,
Guarantors and
other Subsidiaries are in compliance,
in all material
respects, with the USA
Patriot Act.
(c) No
part of the proceeds from the sale of the Notes hereunder will be
used, directly or indirectly, for any payments to any
governmental official
or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an
official capacity,
in order to
obtain, retain or direct business or obtain
any improper advantage, in violation
of the United States Foreign Corrupt
Practices Act of 1977, as amended, assuming
in all cases that such Act applies to the
Company.
8S.
Subsidiaries.
Schedule 6G sets forth the name and
jurisdiction
of
organization of, and the ownership of the Company and Guarantors in each
Subsidiary, identifying each such Subsidiary
that is a Guarantor,
in each case
as of the Date of Closing.
8T.
Solvency. After giving effect to the
issuance of the Notes,
(a) the
fair value of the assets of the Company and
each Guarantor will exceed its debts
and liabilities, subordinated, contingent or otherwise;
(b) the present
fair
saleable value of the property of the
Company and each Guarantor will be greater
than the amount that will be required to
pay the probable liability of its debts
and other liabilities, subordinated, contingent or
otherwise, as such debts and
other liabilities become absolute and matured; (c) the Company and each
Guarantor will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) the Company and each
Guarantor will not have unreasonably small
capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed
to be conducted
following the Date of
Closing.
9.
REPRESENTATIONS OF THE PURCHASER. Each Purchaser represents as
follows:
9A.
Nature of Purchase.
Such Purchaser is not acquiring the
Notes to be
purchased by it hereunder with a view to or for sale in
connection
with any
distribution thereof within the meaning of
the Securities Act, provided that the
disposition of its property shall at all
times be and remain within its control.
Such Purchaser acknowledges that the Notes have not been
registered under
the
Securities Act and may not be offered or sold
in the absence of an
applicable
exemption from the registration
requirements of the Securities Act.
9B.
Source of Funds. At least one of the following statements is an
accurate representation as to each source of funds (a
"Source") to be used
by
such Purchaser to pay the purchase price of the Notes to be purchased
by such
Purchaser hereunder:
(i) the Source is an
"insurance company
general account" (as the
term is
defined in the United
States Department of Labor's Prohibited
Transaction Exemption
("PTE") 95-60) in respect of which the reserves and
liabilities (as
defined by the annual statement for life insurance
companies
approved by the National Association of Insurance Commissioners
(the "NAIC
Annual Statement")) for the general account contract(s) held by
or on
behalf of any employee benefit plan together with the amount of
the
25
<PAGE>
reserves
and liabilities for the general account contract(s) held by or
on
behalf of
any other employee benefit plans maintained by the same
employer
(or
affiliate thereof as defined in PTE 95-60) or by the
same employee
organization in the
general account do not exceed 10% of the total
reserves
and liabilities
of the general
account (exclusive of separate
account liabilities) plus surplus as set forth in the NAIC Annual
Statement
filed with such Purchaser's state of domicile; or
(ii) the Source is a separate account that is maintained
solely in
connection
with such Purchaser's fixed contractual obligations under which
the
amounts payable,
or credited,
to any employee
benefit plan (or
its
related
trust) that has any
interest in such separate account (or to any
participant or beneficiary of such plan (including any annuitant))
are not
affected
in any manner by the investment performance of the separate
account;
or
(iii) the Source is either (a) an insurance company pooled separate
account,
within the meaning of PTE 90-1 or (b) a bank collective
investment
fund, within the meaning of the PTE 91-38 and, except as
disclosed
by such Purchaser to the Company in writing
pursuant to this
clause
(iii), no employee benefit plan or group of plans maintained by
the
same
employer or employee organization beneficially owns more than 10%
of
all
assets allocated to such pooled separate account or collective
investment
fund; or
(iv) the Source
constitutes assets of
an "investment fund" (within
the
meaning of Part V of
PTE 84-14 (the "QPAM
Exemption")) managed
by a
"qualified
professional
asset manager" or "QPAM" (within the
meaning of
Part V of
the QPAM Exemption),
no employee benefit plan's assets that are
included
in such investment
fund, when combined with the assets of
all
other
employee benefit plans established or maintained by the same
employer
or by an affiliate
(within the meaning of Section V(c)(1) of the
QPAM
Exemption) of such employer or by the same employee organization and
managed by
such QPAM, exceed 20%
of the total client
assets managed by
such QPAM,
the conditions of Part I(c) and (g) of
the QPAM Exemption are
satisfied,
neither the QPAM nor a
person controlling or controlled by the
QPAM
(applying the definition of "control" in Section V(e) of
the QPAM
Exemption)
owns a 5% or more
interest in the Company and (a) the identity
of such
QPAM and (b) the names of all employee benefit plans whose assets
are
included in such investment fund have been disclosed to the Company
in
writing
pursuant to this clause (iv); or
(v) the Source constitutes assets of a "plan(s)" (within the
meaning
of
Section IV of PTE 96-23 (the "INHAM Exemption")) managed by an
"in-house
asset manager" or
"INHAM" (within the meaning of Part IV of the
INHAM
exemption),
the conditions of Part I(a), (g) and
(h) of the INHAM
Exemption
are satisfied,
neither the INHAM nor
a person controlling
or
controlled
by the INHAM (applying
the definition of
"control" in Section
IV(h) of
the INHAM Exemption)
owns a 5% or more
interest in the
Company
and (a)
the identity
of such INHAM and (b)
the name(s) of the
employee
benefit
plan(s)
26
<PAGE>
whose
assets constitute
the Source have been
disclosed to the Company in
writing
pursuant to this clause (v); or
(vi) the Source is a governmental plan; or
(vii) the Source is one or more employee benefit plans, or a
separate
account or trust fund
comprised of one or more employee benefit
plans,
each of which
has been identified to the Company in writing
pursuant
to this clause (vii); or
(viii) the Source does not include assets of any employee benefit
plan,
other than a plan exempt from the coverage of ERISA.
As used in this Paragraph 9B, the terms
"employee benefit
plan,"
"governmental
plan," and "separate account" shall have the respective
meanings assigned to
such terms in Section 3 of ERISA.
10. AI
GUARANTY AGREEMENT
10A.
Guarantied
Obligations. The
Guarantors party to this Agreement, in
consideration of the execution and delivery of
this Agreement and the
purchase
of the Notes by the Purchasers, hereby
irrevocably, unconditionally, absolutely,
jointly and severally guarantee,
on a continuing basis,
to each holder of Notes
as and for such Guarantor's own debt,
until final and
indefeasible
payment in
cash has been made, the due and punctual
payment by the Company of the principal
of, and interest, and the Yield-Maintenance
Amount (if any) on, the Notes at any
time outstanding and the due and
punctual payment of all other amounts payable,
and all other indebtedness owing, by the Company to the holders of the
Notes
under this Agreement and the Notes, in each case when and as the same
shall
become due and payable, whether at maturity, pursuant to mandatory or
optional
prepayment, by acceleration or otherwise,
all in accordance with
the terms and
provisions hereof and thereof; it being the intent of the
Guarantors that
the
obligations guaranteed by the guaranty set forth in this Paragraph 10A are
referred to in this Paragraph 10 as the "Guarantied Obligations" and the
guaranty thereof set forth in this Paragraph 10A is referred to in this
Agreement, together with any AI Guarantor
Joinder Agreement, as the "AI Guaranty
Agreement".
10B.
Payments and Performance. In the event that the Company
fails to
make, on or before the due date thereof,
any payment to be made of any principal
amount of, or interest or Yield-Maintenance Amount on, or in respect of,
the
Notes or of any other amounts due to any
holder of Notes under the Notes or this
Agreement, after giving effect to any applicable grace periods or cure
provisions or waivers or amendments,
each Guarantor shall
cause forthwith to be
paid the moneys in respect of which such
failure has occurred in accordance with
the terms and provisions of this Agreement
and the Notes. In
furtherance of the
foregoing, if any or all the Notes have been accelerated as provided in
Paragraph 7A (and such acceleration has not been rescinded by action of the
Required Holders), the Guarantied Obligations in respect of such
Notes shall
forthwith become due and payable without notice, regardless of whether the
acceleration of such Notes shall be stayed, enjoined, delayed or deemed
ineffective. Nothing
27
<PAGE>
shall discharge or satisfy the obligations of the Guarantors under the AI
Guaranty Agreement except the full,
final and indefeasible
payment in cash of
the Guarantied Obligations.
10C.
Releases. Each of the
Guarantors consent and agree that, without any
notice whatsoever to or by the Guarantors, except with respect to any
action
(but not any failure to act) referred to in
clauses (i), (ii) and (iv) below (it
being understood that the Guarantors shall be deemed to have notice of any
matter as to which the Company has
knowledge), and without impairing, releasing,
abating, deferring, suspending, reducing,
terminating or otherwise affecting the
obligations of the Guarantors hereunder, each holder of Notes, by action or
inaction, may:
(i) compromise or settle, renew or extend the period of
duration or
the time for the payment, or discharge the performance of,
or may refuse to, or
otherwise not, enforce, or may, be action
or inaction, release all or any one or
more parties to, any one or more of the Notes,
this Agreement, or any other
guaranty or agreement or instrument related
thereto or hereto;
(ii) assign, sell or
transfer, or otherwise
dispose of, any one or
more of the Notes;
(iii) grant waivers,
extensions, consents
and other indulgences of
any kind whatsoever to the Company or any Guarantor or
any other Person liable
in any manner in respect of all or any part
of the Guarantied Obligations;
(iv) amend, modify or supplement in any manner whatsoever and at
any
time (or from time to time) any one or more
of the Notes, this Agreement, or any
other guaranty or any agreement or
instrument related thereto or hereto;
(v) release
or substitute any one or more of the endorsers or
guarantors of the Guarantied Obligations
whether parties hereto or not; and
(vi) sell, exchange,
release, accept,
surrender or enforce
rights
in, or fail to obtain or perfect or to maintain, or caused to be obtained,
perfected or maintained, the perfection of any security
interest or other
Lien
on, by action or inaction, any property at any time pledged or granted as
security in respect of the Guarantied
Obligations, whether so pledged or granted
by the Company, a Guarantor or any other
Person.
The Guarantors hereby ratify and confirm any such
action specified in this
Paragraph 10C and agree that the same shall
be binding upon each Guarantor. The
Guarantors hereby waive any and all
defenses, counterclaims or offsets which the
Guarantors might or could have by reason
thereof.
10D.
Waivers. To the fullest extent permitted by law, each of the
Guarantors hereby waives:
(i) notice of acceptance of this Agreement;
28
<PAGE>
(ii) notice of any
purchase or acceptance
of the Notes under
this
Agreement, or the creation, existence or acquisition of any of the
Guarantied
Obligations, subject to any such Guarantor's right to make inquiry of each
holder of Notes to ascertain the amount of the Guarantied Obligations at any
reasonable time;
(iii) notice of the amount of the Guarantied Obligations, subject
to
any Guarantor's right to make inquiry of each
holder of Notes to ascertain the
amount of the Guarantied Obligations at any
reasonable time;
(iv) notice of adverse
change in the
financial condition of the
Company or any Guarantor or any other fact
that might increase
the Company's or
such Guarantor's risk hereunder;
(v) notice of presentment for payment, demand, protest, and notice
thereof as to the Notes or any other
instrument;
(vi) all other notices
and demands to which the Company or any
Guarantor might otherwise be entitled (except if such notice or demand is
specifically otherwise required to be given to the
Company or such
Guarantor
under this Agreement);
(vii) the right by
statute or
otherwise to require any or each
holder of Notes to institute suit against the Company or any
Guarantor or to
exhaust the rights and remedies of any or each holder of Notes against the
Company or any Guarantor, such Guarantor being bound to the
payment of each and
all Guarantied Obligations, whether now
existing or hereafter accruing, as fully
as if such Guarantied Obligations were
directly owing to each holder of Notes by
such Guarantor;
(ix) any defense
arising by reason of any disability or other
defense (other than the defense that the
Guarantied Obligations
shall have been
fully, finally and indefeasibly paid) of the Company or any
Guarantor or by
reason of the cessation from any cause whatsoever of the liability of the
Company or any Guarantor in respect
thereof;
(x) any stay (except in connection with a pending appeal),
valuation, appraisal, redemption or extension law now or
at any time hereafter
in force that, but for this waiver,
might be applicable to
any sale of Property
of the Company or any Guarantor
made under any
judgment, order or
decree based
on this Agreement, and the Company or such Guarantor
covenants that it will not
ant any time insist upon or plead, or in
any manner claim or take the benefit or
advantage of any such law; and
(xi) at all times prior to full, final and indefeasible payment of
the Guarantied Obligations, any claim of any nature arising
out of any right of
indemnity, contribution, reimbursement,
indemnification or any
similar right or
any claim of subrogation (whether such right or claim arises under
contract,
common law or statutory or civil law
(including, without limitation, Section 509
of the United States Bankruptcy Code) arising in respect of any payment
made
under this Agreement or in connection with
this Agreement,
against the
Company
or any
29
<PAGE>
Guarantor (including Liens on the property
of the Company or any Guarantor), in
each case whether or not the Company or
such Guarantor at any
time shall be the
subject of any proceeding brought under any Bankruptcy
Law, and the Company
or
such Guarantor further agrees that it will not file any
claims against either
Company or the estate of either Company in
the course of any such
proceeding or
otherwise, and further agrees that each
holder of Notes may specifically enforce
the provisions of this clause (xi).
10E.
Marshaling. Each of the Guarantors hereby consent and agree:
(i) that each holder
of Notes, and each Person acting for the
benefit of one or more of the holders of
Notes, shall be under
no obligation to
marshal any assets in favor of the
Guarantors or against or in payment of any or
all of the Guarantied Obligations; and
(ii) that,
to the extent that any Guarantor makes a payment or
payments to any holder of the Notes,
which payment or payments or any part
thereof are subsequently invalidated,
declared to be fraudulent or preferential,
set aside or required, for any of the
foregoing reasons or for any other reason,
to be repaid or paid over to a custodian,
trustee, receiver or any other party
under any Bankruptcy Law, other common or
civil law, or equitable cause, then,
to the extent of such payment or repayment, the obligation or part thereof
intended to be satisfied thereby shall be revived and continued in full force
and effect as if such pay
