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EXHIBIT 10.1
EXECUTION COPY
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ENCORE WIRE CORPORATION
ENCORE WIRE LIMITED
$300,000,000 Aggregate Principal Amount
Senior Notes Issuable in Series
Initial Issuance of
$55,000,000 Floating Rate Senior Notes, Series 2006-A
due September 30, 2011
----------
MASTER NOTE PURCHASE AGREEMENT
----------
Dated as of September 28, 2006
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PPN: 29263@ AB 5
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TABLE OF CONTENTS
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Section
Page
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1.
AUTHORIZATION OF
NOTES..................................................................................1
1.1.
Amount; Establishment of
Series................................................................1
1.2.
The Series 2006-A
Notes........................................................................2
1.3.
Floating Interest Rate Provisions for Floating Rate
Notes......................................2
1.4.
Guaranties; Release of Subsidiary
Guaranty.....................................................4
2. SALE
AND PURCHASE OF SERIES 2006-A
NOTES................................................................4
3.
CLOSING.................................................................................................4
4.
CONDITIONS TO
CLOSING...................................................................................5
4.1.
Representations and
Warranties.................................................................5
4.2.
Performance; No
Default........................................................................5
4.3.
Compliance
Certificates........................................................................5
4.4.
Opinions of
Counsel............................................................................5
4.5.
Purchase Permitted By Applicable Law,
etc......................................................6
4.6.
Sale of Other
Notes............................................................................6
4.7.
Payment of Special Counsel
Fees................................................................6
4.8.
Private Placement
Number.......................................................................6
4.9.
Changes in Corporate
Structure.................................................................6
4.10.
Guaranties.....................................................................................7
4.11.
Amendment to the Credit
Agreement..............................................................7
4.12.
Funding
Instructions...........................................................................7
4.13.
Proceedings and
Documents......................................................................7
5.
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY...........................................................7
5.1.
Organization; Power and
Authority..............................................................7
5.2.
Authorization,
etc.............................................................................8
5.3.
Disclosure.....................................................................................8
5.4.
Organization and Ownership of Shares of
Subsidiaries...........................................8
5.5.
Financial
Statements...........................................................................9
5.6.
Compliance with Laws, Other Instruments,
etc...................................................9
5.7.
Governmental Authorizations,
etc..............................................................10
5.8.
Litigation; Observance of Statutes and
Orders.................................................10
5.9.
Taxes.........................................................................................11
5.10.
Title to Property;
Leases.....................................................................11
5.11.
Licenses, Permits,
etc........................................................................11
5.12.
Compliance with
ERISA.........................................................................12
5.13.
Private Offering by the
Company...............................................................13
5.14. Use
of Proceeds; Margin
Regulations...........................................................13
5.15.
Existing
Debt.................................................................................13
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5.16.
Foreign Assets Control Regulations,
Etc.......................................................14
5.17.
Status under Certain
Statutes.................................................................14
5.18.
Environmental
Matters.........................................................................14
5.19.
Solvency of Subsidiary
Guarantors.............................................................15
6.
REPRESENTATIONS OF THE
PURCHASERS......................................................................15
6.1.
Purchase for
Investment.......................................................................15
6.2.
Source of
Funds...............................................................................15
7.
INFORMATION AS TO THE PARENT AND THE
COMPANY...........................................................17
7.1.
Financial and Business
Information............................................................17
7.2.
Officer's
Certificate.........................................................................20
7.3.
Inspection....................................................................................21
8.
PREPAYMENT OF
THE
NOTES................................................................................21
8.1.
Required Prepayments of Series 2006-A
Notes...................................................21
8.2.
Optional
Prepayments..........................................................................21
8.3.
Allocation of Partial
Prepayments.............................................................22
8.4.
Maturity; Surrender,
etc......................................................................22
8.5.
Purchase of
Notes.............................................................................23
8.6.
Make-Whole
Amount.............................................................................23
8.7.
LIBOR Breakage
Amount.........................................................................25
9.
AFFIRMATIVE
COVENANTS..................................................................................25
9.1.
Compliance with
Law...........................................................................25
9.2.
Insurance.....................................................................................25
9.3.
Maintenance of
Properties.....................................................................26
9.4.
Payment of
Taxes..............................................................................26
9.5.
Corporate Existence,
etc......................................................................26
9.6.
Additional Subsidiary
Guarantors..............................................................26
9.7.
Ranking of
Notes..............................................................................27
10. NEGATIVE
COVENANTS.....................................................................................27
10.1.
Consolidated
Debt.............................................................................27
10.2.
Interest
Coverage.............................................................................27
10.3.
Priority
Debt.................................................................................27
10.4.
Liens.........................................................................................28
10.5.
Mergers, Consolidations,
etc..................................................................29
10.6. Sale
of
Assets................................................................................30
10.7.
Designation of Restricted and Unrestricted
Subsidiaries.......................................31
10.8.
Nature of
Business............................................................................31
10.9.
Transactions with
Affiliates..................................................................32
11. EVENTS OF
DEFAULT......................................................................................32
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12. REMEDIES
ON DEFAULT,
ETC...............................................................................34
12.1.
Acceleration..................................................................................34
12.2.
Other
Remedies................................................................................35
12.3.
Rescission....................................................................................35
12.4. No
Waivers or Election of Remedies, Expenses,
etc.............................................36
13.
REGISTRATION; EXCHANGE; SUBSTITUTION OF
NOTES..........................................................36
13.1.
Registration of
Notes.........................................................................36
13.2.
Transfer and Exchange of
Notes................................................................36
13.3.
Restriction on Transfer to
Competitor.........................................................37
13.4.
Replacement of
Notes..........................................................................37
14. PAYMENTS
ON
NOTES......................................................................................37
14.1.
Place of
Payment..............................................................................37
14.2. Home
Office
Payment...........................................................................38
15. EXPENSES,
ETC..........................................................................................38
15.1.
Transaction
Expenses..........................................................................38
15.2.
Survival......................................................................................39
16. SURVIVAL
OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT...........................................39
17. AMENDMENT
AND
WAIVER...................................................................................39
17.1.
Requirements..................................................................................39
17.2.
Solicitation of Holders of
Notes..............................................................39
17.3.
Binding Effect,
etc...........................................................................40
17.4.
Notes held by Company,
etc....................................................................40
18.
NOTICES................................................................................................40
19.
REPRODUCTION OF
DOCUMENTS..............................................................................41
20.
CONFIDENTIAL
INFORMATION...............................................................................41
21.
SUBSTITUTION OF
PURCHASER..............................................................................42
22.
MISCELLANEOUS..........................................................................................43
22.1.
Successors and
Assigns........................................................................43
22.2.
Payments Due on Non-Business
Days.............................................................43
22.3.
Severability..................................................................................43
22.4.
Construction..................................................................................43
22.5.
Counterparts..................................................................................43
22.6.
Governing
Law.................................................................................44
22.7.
Limitation on
Interest........................................................................44
22.8.
Submission to
Jurisdiction....................................................................45
22.9.
Waiver of Jury
Trial..........................................................................45
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<PAGE>
SCHEDULE A
--
Information Relating to Purchasers
SCHEDULE B
--
Defined Terms
SCHEDULE 5.3 --
Disclosure Materials
SCHEDULE 5.4 --
Subsidiaries and Ownership of Subsidiary Stock
SCHEDULE 5.5 --
Financial Statements
SCHEDULE 5.14 -- Use
of Proceeds
SCHEDULE 5.15 --
Debt
EXHIBIT 1.1(a) -- Form
of Fixed Rate Note
EXHIBIT 1.1(b) -- Form
of Floating Rate Note
EXHIBIT 1.1(c) -- Form
of Supplement
EXHIBIT 1.2 --
Form
of Series 2006-A Senior Note
EXHIBIT 1.4(a) -- Form
of Parent Guaranty
EXHIBIT 1.4(b) -- Form
of Subsidiary Guaranty
EXHIBIT 4.4(a) -- Form
of Opinion of Counsel for the Company
EXHIBIT 4.4(b) -- Form
of Opinion of Special Counsel to the Purchasers
iv
<PAGE>
ENCORE WIRE CORPORATION
ENCORE WIRE
LIMITED
1410 Millwood Road
McKinney, TX 75069
(972) 562-9473
Fax: (972) 562-4744
$300,000,000 Aggregate Principal Amount
Senior Notes Issuable in Series
$55,000,000 Floating Rate Senior Notes, Series 2006-A
due September 30, 2011
Dated as of September 28, 2006
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
ENCORE WIRE LIMITED, a Texas limited partnership (the
"Company"), and ENCORE WIRE CORPORATION, a Delaware corporation
(the "Parent"),
agree with you as follows:
1.
AUTHORIZATION OF NOTES.
1.1.
AMOUNT; ESTABLISHMENT OF SERIES.
The Company is contemplating the issue and sale of up to
$300,000,000 aggregate principal amount of its senior notes
issuable in series
(the "Notes", such term to include any such Notes issued in
substitution
therefor pursuant to Section 13 of this Agreement). Fixed rate
Notes will be
substantially in the form set out in Exhibit 1.1(a) and floating
rate Notes will
be substantially in the form set out in Exhibit 1.1(b), in each
case, with such
changes therefrom, if any, as may be approved by the purchasers of
such Notes,
or series thereof, and the Company. Certain capitalized terms used
in this
Agreement are defined in Schedule B; references to a "Schedule" or
an "Exhibit"
are, unless otherwise specified, to a Schedule or an Exhibit
attached to this
Agreement. Each series of Notes, other than the Series 2006-A Notes
(as defined
below), will be issued pursuant to a supplement to this Agreement
(a
"Supplement") in substantially the form of Exhibit 1.1(c), and will
be subject
to the following terms and conditions:
<PAGE>
(a) the designation of each series of Notes shall distinguish
the Notes of one series from the Notes of all other series;
(b) each series of additional Notes may consist of different
and separate tranches and may differ as to outstanding
principal
amounts, maturity dates, interest rates and premiums or
make-whole
amounts, if any, and price and terms of redemption or payment prior
to
maturity;
(c) the Notes of each series shall rank pari passu with the
Notes of all other series and the Company's other outstanding
unsecured
senior Debt;
(d) each series of Notes shall be dated the date of issue,
bear interest at such rate or rates, mature on such date or dates,
be
subject to such mandatory or optional prepayments, if any, on the
dates
and with the make-whole amounts, premiums or breakage amounts if
any,
as are provided in the Supplement under which such Notes are
issued,
and shall have such additional or different conditions precedent
to
closing and such additional or different representations and
warranties
or, subject to the following clause (e), other terms and provisions
as
shall be specified in such Supplement;
(e) any additional or more restrictive covenants, Defaults,
Events of Default, rights or similar provisions that are added
or
varied by a Supplement for the benefit of the series of Notes to
be
issued pursuant to such Supplement shall apply to all
outstanding
Notes, whether or not the Supplement so provides; and
(f) except to the extent provided in foregoing clause (d), all
of the provisions of this Agreement shall apply to the Notes of
each
series.
The Purchasers of the Series 2006-A Notes need not purchase
subsequent series of
Notes.
1.2.
THE SERIES 2006-A NOTES.
The Company has authorized, as the initial series of Notes
hereunder, the issue and sale of $55,000,000 aggregate principal
amount of
Floating Rate Senior Notes, Series 2006-A, due September 30, 2011
(the "Series
2006-A Notes," such term to include any such Notes issued in
substitution
therefor pursuant to Section 13 of this Agreement). The Series
2006-A Notes
shall be substantially in the form set out in Exhibit 1.2, with
such changes
therefrom, if any, as may be approved by you and the Company.
1.3.
FLOATING INTEREST RATE PROVISIONS FOR FLOATING RATE NOTES.
(a) Adjusted LIBOR Rate. "Adjusted LIBOR Rate" means, for each
Interest Period, the rate per annum equal to LIBOR for such
Interest
Period plus the percentage applicable to a series or tranche of
floating rate Notes. The percentage applicable to the Series
2006-A
Notes is .60%.
2
<PAGE>
For purposes of determining Adjusted LIBOR Rate, the following
terms
have the following meanings:
"LIBOR" means, for any Interest Period, the rate per
annum (rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) for deposits in U.S.
Dollars for a 3-month period (or such other period as is
specified in the applicable Supplement) that appears on the
Bloomberg Financial Markets Service Page BBAM-1 (or if such
page is not available, the Reuters Screen LIBO Page) as of
11:00 a.m. (London, England time) on the date two Business
Days before the commencement of such Interest Period (or three
Business Days before the commencement of the first Interest
Period).
"REUTERS SCREEN LIBO PAGE" means the display
designated as the "LIBO" page on the Reuters Monitory Money
Rates Service (or such other page as may replace the LIBO page
on that service) or such other service as may be nominated by
the British Bankers' Association as the information vendor for
the purpose of displaying British Bankers' Association
Interest Settlement Rates for U.S. Dollar deposits.
(b) Determination of the Adjusted LIBOR Rate. The Adjusted
LIBOR Rate shall be determined by the Company, and notice thereof
shall
be given to the holders of the applicable series or tranche of
floating
rate Notes, within two Business Days after the beginning of
each
Interest Period, together with (i) a copy of the relevant screen
used
for the determination of LIBOR, (ii) a calculation of the
Adjusted
LIBOR Rate for such Interest Period, (iii) the number of days in
such
Interest Period, (iv) the date on which interest for such
Interest
Period will be paid and (v) the amount of interest to be paid to
each
holder of Notes of such series or tranche on such date. If the
holders
of a majority in principal amount of the Notes of such series
or
tranche outstanding do not concur with such determination by
the
Company, as evidenced by a single written notice (together with
such
holders' determination of items (ii) to (v) of the preceding
sentence
and in the case of item (i), a copy of the screen used by such
holders), delivered to the Company within 10 Business Days
after
receipt by such holders of the notice delivered by the Company
pursuant
to the immediately preceding sentence, the determination of the
Adjusted LIBOR Rate shall be made by such holders of the Notes, and
any
such determination made in accordance with the provisions of
this
Agreement shall be conclusive and binding absent manifest
error.
(c) Interest Period. "INTEREST PERIOD" means for any series or
tranche of floating rate Notes and for any period for which
interest is
to
be calculated or paid, the period commencing on an interest
payment
date for such series or tranche of floating rate Notes, or on the
date
of Closing in the case of the first such period, and continuing up
to,
but not including, the next interest payment date. The interest
payment
dates for the Series 2006-A Notes are March 30, June 30, September
30
and December 30.
3
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1.4.
GUARANTIES; RELEASE OF SUBSIDIARY GUARANTY.
(a) Guaranties. The Notes will be guaranteed (i) by the Parent
pursuant to a guaranty in substantially the form of Exhibit 1.4(a)
(the
"Parent Guaranty") and (ii) by the Subsidiary Guarantors pursuant
to a
guaranty in substantially the form of Exhibit 1.4(b) (the
"Subsidiary
Guaranty," and, together with the Parent Guaranty, the
"Guaranties").
(b) Release of Subsidiary Guaranty. Each holder of a Note
agrees to release and discharge a Subsidiary Guarantor from the
Subsidiary Guaranty upon written request of the Company, provided
that
(i) such Subsidiary has been, or concurrently with the release by
the
holders of Notes, will be released and discharged as guarantor
under
and in respect of the Credit Agreement and any other Senior Debt;
(ii)
such release and discharge is not part of a plan of financing
that
contemplates such Subsidiary Guarantor guaranteeing any other Debt
of
the Company or becoming a borrower under the Credit Agreement;
(iii) no
Default or Event of Default exists or will exist immediately
following
such release and discharge; (iv) if any fee or other consideration
is
paid
or given to any holder of Debt in connection with such release,
other than the repayment of all or a portion of such Debt, each
holder
of a Note receives equivalent consideration on a pro rata basis;
and
(v) at the time of such written request, the Company delivers to
each
holder of Notes a certificate of a Responsible Officer certifying
the
matters set forth in clauses (i) through (iv).
2. SALE
AND PURCHASE OF SERIES 2006-A NOTES.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and each of the other purchasers
named in
Schedule A (the "Other Purchasers"), and you and the Other
Purchasers will
purchase from the Company, at the Closing provided for in Section
3, Series
2006-A Notes in the principal amount specified opposite your names
in Schedule A
at the purchase price of 100% of the principal amount thereof. Your
obligation
hereunder and the obligations of the Other Purchasers are several
and not joint
obligations and you shall have no liability to any Person for the
performance or
non-performance by any Other Purchaser hereunder.
3.
CLOSING.
The sale and purchase of the Series 2006-A Notes to be
purchased by you and the Other Purchasers shall occur at the
offices of Gardner,
Carton & Douglas LLP, Suite 3700, 191 North Wacker Drive,
Chicago, Illinois
60606 at 9:00 a.m., Chicago time, at a closing on September 28,
2006 (the
"Closing") or on such other Business Day thereafter, not later than
October 6,
2006, as may be agreed upon by the Company and the purchasers that
are scheduled
to purchase Notes at such Closing. At the Closing, the Company will
deliver to
you the Series 2006-A Notes to be purchased by you in the form of a
single
Series 2006-A Note (or such greater number of Series 2006-A Notes
in
denominations of at least $100,000 as you may request) dated the
date of Closing
and registered in your name (or in the name of your nominee),
against delivery
by you to the Company or its order of immediately available funds
in the amount
of the purchase price therefor by wire transfer of immediately
available funds
for the account of the
4
<PAGE>
Company to account number 4779592667 at Bank of America, N.A., 901
Main Street,
67th Floor, Dallas TX, ABA No. 111 0000 25. If at the Closing the
Company fails
to tender such Series 2006-A Notes to you as provided above in this
Section 3,
or any of the conditions specified in Section 4 shall not have been
fulfilled to
your satisfaction, you shall, at your election, be relieved of all
further
obligations under this Agreement, without thereby waiving any
rights you may
have by reason of such failure or such nonfulfillment.
4.
CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold
to you at the Closing is subject to the fulfillment to your
satisfaction, prior
to or at the Closing, of the following conditions:
4.1.
REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Parent and the
Company in this Agreement shall be correct when made and at the
time of the
Closing.
4.2.
PERFORMANCE; NO DEFAULT.
The Parent and the Company shall have performed and complied
with all agreements and conditions contained in this Agreement
required to be
performed or complied with by them prior to or at the Closing and
after giving
effect to the issue and sale of the Notes (and the application of
the proceeds
thereof as contemplated by Schedule 5.14) no Default or Event of
Default shall
have occurred and be continuing. Neither the Parent nor any
Subsidiary,
including the Company, shall have entered into any transaction
since June 30,
2006 that would have been prohibited by Sections 10, had such
Section applied
since such date.
4.3.
COMPLIANCE CERTIFICATES.
(a) Officer's Certificate. The Parent and the Company each
shall have delivered to you an Officer's Certificate, dated the
date of
such Closing, certifying that the conditions specified in Sections
4.1,
4.2 and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Parent, the Company and each
Subsidiary Guarantor shall have delivered to you a certificate
certifying as to the resolutions attached thereto and other
corporate
proceedings relating to the authorization, execution and delivery
of
the Notes and the Agreement.
4.4.
OPINIONS OF COUNSEL.
You shall have received opinions in form and substance
reasonably satisfactory to you, dated the date of the Closing (a)
from Thompson
& Knight LLP, counsel for the Parent, the Company and the
Subsidiary Guarantors,
covering the matters set forth in Exhibit 4.4(a) and covering such
other matters
incident to the transactions contemplated hereby as you or your
counsel may
reasonably request (and the Parent and the Company instruct their
counsel to
deliver
5
<PAGE>
such opinion to you) and (b) from Gardner Carton & Douglas LLP,
your special
counsel in connection with such transactions, substantially in the
form set
forth in Exhibit 4.4(b) and covering such other matters incident to
such
transactions as you may reasonably request.
4.5.
PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of the Closing your purchase of Notes shall (i) be
permitted by the laws and regulations of each jurisdiction to which
you are
subject, without recourse to provisions (such as section 1405(a)(8)
of the New
York Insurance Law) permitting limited investments by insurance
companies
without restriction as to the character of the particular
investment, (ii) not
violate any applicable law or regulation (including Regulation U, T
or X of the
Board of Governors of the Federal Reserve System) and (iii) not
subject you to
any tax, penalty or liability under or pursuant to any applicable
law or
regulation, which law or regulation was not in effect on the date
hereof. If
requested by you, you shall have received an Officer's Certificate
certifying as
to such matters of fact as you may reasonably specify to enable you
to determine
whether such purchase is so permitted.
4.6.
SALE OF OTHER NOTES.
Contemporaneously with the Closing the Company shall sell to
the Other Purchasers and the Other Purchasers shall purchase the
Notes to be
purchased by them at the Closing as specified in Schedule A.
4.7.
PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company
shall have paid on or before the Closing the fees, charges and
disbursements of
your special counsel referred to in Section 4.4, to the extent
reflected in a
reasonably detailed statement of such counsel rendered to the
Company at least
one Business Day prior to the Closing.
4.8.
PRIVATE PLACEMENT NUMBER.
A Private Placement Number issued by Standard & Poor's
CUSIP
Service Bureau (in cooperation with the Securities Valuation Office
of the
National Association of Insurance Commissioners) shall have been
obtained by
Gardner Carton & Douglas LLP for the series of Notes to be
issued at the
Closing.
4.9.
CHANGES IN CORPORATE STRUCTURE.
Neither the Parent nor the Company shall have changed its
jurisdiction of incorporation or been a party to any merger or
consolidation and
shall not have succeeded to all or any substantial part of the
liabilities of
any other entity, at any time following the date of the most recent
financial
statements referred to in Schedule 5.5.
6
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4.10.
GUARANTIES.
The Parent shall have executed and delivered the Parent
Guaranty and each Subsidiary Guarantor shall have executed and
delivered the
Subsidiary Guaranty.
4.11.
AMENDMENT TO THE CREDIT AGREEMENT.
You and your special counsel shall have been provided with a
copy of the Second Amendment to the Credit Agreement executed by
the Company.
4.12.
FUNDING INSTRUCTIONS.
At least three Business Days prior to the date of the Closing,
each Purchaser shall have received written instructions signed by a
Responsible
Officer on letterhead of the Company confirming the information
specified in
Section 3 including (i) the name and address of the transferee
bank, (ii) such
transferee bank's ABA number and (iii) the account name and number
into which
the purchase price for the Notes is to be deposited.
4.13.
PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and
instruments
incident to such transactions shall be reasonably satisfactory to
you and your
special counsel, and you and your special counsel shall have
received all such
counterpart originals or certified or other copies of such
documents as you or
they may reasonably request.
5.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Each of the Company and the Parent represents and warrants to
you that:
5.1.
ORGANIZATION; POWER AND AUTHORITY.
Each of the Company and the Parent is a limited partnership or
corporation duly organized, validly existing and in good standing
under the laws
of its jurisdiction of organization, and is duly qualified as a
foreign limited
partnership or corporation and is in good standing in each
jurisdiction in which
such qualification is required by law, other than those
jurisdictions as to
which the failure to be so qualified or in good standing could not,
individually
or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Each of the Company and the Parent has the limited partnership or
corporate
power and authority to own or hold under lease the properties it
purports to own
or hold under lease, to transact the business it transacts and
proposes to
transact, to execute and deliver this Agreement, the Parent
Guaranty (in the
case of the Parent) and the Series 2006-A Notes (in the case of the
Company) and
to perform the provisions hereof and thereof.
7
<PAGE>
5.2.
AUTHORIZATION, ETC.
This Agreement and the Series 2006-A Notes have been duly
authorized by all necessary limited partnership action on the part
of the
Company, and this Agreement constitutes, and upon execution and
delivery thereof
each Series 2006-A Note will constitute, a legal, valid and binding
obligation
of the Company enforceable against the Company in accordance with
its terms,
except as such enforceability may be limited by (i) applicable
bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the
enforcement of creditors' rights generally and (ii) general
principles of equity
(regardless of whether such enforceability is considered in a
proceeding in
equity or at law).
The Guaranties have been duly authorized by all necessary
corporate action on the part of the Parent or each Subsidiary
Guarantor, as the
case may be, and upon execution and delivery thereof will
constitute the legal,
valid and binding obligation of the Parent and each Subsidiary
Guarantor,
enforceable against the Parent or each Subsidiary Guarantor, as the
case may be,
in accordance with their respective terms, except as such
enforceability may be
limited by (i) applicable bankruptcy, insolvency, fraudulent
conveyance,
reorganization, moratorium or other similar laws affecting the
enforcement of
creditors' rights generally and (ii) general principles of equity
(regardless of
whether such enforceability is considered in a proceeding in equity
or at law).
5.3.
DISCLOSURE.
This Agreement, the documents, certificates or other writings
delivered to you by or on behalf of the Company in connection with
the
transactions contemplated hereby and the financial statements
listed in Schedule
5.5, taken as a whole, do not contain any untrue statement of a
material fact or
omit to state any material fact necessary to make the statements
therein not
misleading in light of the circumstances under which they were
made. Except as
expressly described in Schedule 5.3, or in one of the documents,
certificates or
other writings identified therein, or in the financial statements
listed in
Schedule 5.5, since December 31, 2005, there has been no change in
the financial
condition, operations, business or properties of the Parent or any
Subsidiary,
including the Company, except changes that individually or in the
aggregate
could not reasonably be expected to have a Material Adverse Effect.
There is no
fact known to the Parent or the Company that could reasonably be
expected to
have a Material Adverse Effect that has not been set forth herein
or in the
other documents, certificates and other writings delivered to you
by or on
behalf of the Parent or the Company specifically for use in
connection with the
transactions contemplated hereby.
5.4.
ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES.
(a)
Schedule 5.4 contains (except as noted therein) complete
and correct lists of (i) the Parent's Subsidiaries, showing, as to
each
Subsidiary, the correct name thereof, the jurisdiction of its
organization and the percentage of shares of each class of its
capital
stock or similar equity interests outstanding owned by the Parent
and
each other Subsidiary, including the Company, (ii) the Parent's
Affiliates, other than Subsidiaries, and (iii) the Parent's and
the
Company's directors and senior officers.
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(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as
being
owned by the Parent and its Subsidiaries, including the Company,
have
been validly issued, are fully paid and nonassessable and are owned
by
the Parent or another Subsidiary, including the Company, free and
clear
of any Lien (except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly existing
and
in good standing under the laws of its jurisdiction of
organization,
and is duly qualified as a foreign corporation or other legal
entity
and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as
to
which the failure to be so qualified or in good standing could
not,
individually or in the aggregate, reasonably be expected to have
a
Material Adverse Effect. Each such Subsidiary has the corporate
or
other power and authority to own or hold under lease the properties
it
purports to own or hold under lease and to transact the business
it
transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement,
the
agreements listed on Schedule 5.4 and customary limitations imposed
by
corporate, partnership or limited liability company law
statutes)
restricting the ability of such Subsidiary to pay dividends out
of
profits or make any other similar distributions of profits to
the
Company or any of its Subsidiaries that owns outstanding shares
of
capital stock or similar equity interests of such Subsidiary.
5.5.
FINANCIAL STATEMENTS.
The Parent has delivered to you and each Other Purchaser
copies of the consolidated financial statements of the Parent and
its
Subsidiaries, including the Company, listed on Schedule 5.5. All of
said
financial statements (including in each case the related schedules
and notes)
fairly present in all material respects the consolidated financial
position of
the Parent and its Subsidiaries, including the Company, as of the
respective
dates specified in such Schedule and the consolidated results of
their
operations and cash flows for the respective periods so specified
and have been
prepared in accordance with GAAP consistently applied throughout
the periods
involved except as set forth in the notes thereto (subject, in the
case of any
interim financial statements, to normal year-end adjustments and to
the absence
of footnotes). The Parent and its Subsidiaries, including the
Company, do not
have any Material liabilities that are not disclosed on such
financial
statements or otherwise disclosed in this Agreement or the
documents,
certificates or other writings delivered to you by or on behalf of
the Company
in connection with the transactions contemplated hereby.
5.6.
COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Company and the
Parent of this Agreement and by the Company of the Series 2006-A
Notes will not
(i) contravene, result in any breach of, or constitute a default
under, or
result in the creation of any Lien in respect of any property of
the Parent or
any Subsidiary, including the Company, under, any indenture,
mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate charter
or by-laws,
or any other
9
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Material agreement or instrument to which the Parent or any
Subsidiary,
including the Company, is bound or by which any of their respective
properties
may be bound or affected, (ii) conflict with or result in a breach
of any of the
terms, conditions or provisions of any order, judgment, decree, or
ruling of any
court, arbitrator or Governmental Authority applicable to the
Parent or any
Subsidiary, including the Company, or (iii) violate any provision
of any statute
or other rule or regulation of any Governmental Authority
applicable to the
Parent or any Subsidiary, including the Company.
The execution, delivery and performance by each of the Parent
and each Subsidiary Guarantor of the Guaranty to which it is a
party will not
(i) contravene, result in any breach of, or constitute a default
under, or
result in the creation of any Lien in respect of any property of
the Parent or
such Subsidiary Guarantor under, any agreement, or corporate
charter or by-laws,
to which the Parent or such Subsidiary Guarantor is bound or by
which the Parent
or such Subsidiary Guarantor or any of their properties may be
bound or
affected, (ii) conflict with or result in a breach of any of the
terms,
conditions or provisions of any order, judgment, decree, or ruling
of any court,
arbitrator or Governmental Authority applicable to the Parent or
such Subsidiary
Guarantor or (iii) violate any provision of any statute or other
rule or
regulation of any Governmental Authority applicable to the Parent
or such
Subsidiary Guarantor.
5.7.
GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration,
filing or declaration with, any Governmental Authority is required
in connection
with the execution, delivery or performance by the Company of this
Agreement or
the Series 2006-A Notes or the execution, delivery or performance
by the Parent
of this Agreement or the Parent Guaranty or by each Subsidiary
Guarantor of the
Subsidiary Guaranty.
5.8.
LITIGATION; OBSERVANCE OF STATUTES AND ORDERS.
(a) There are no actions, suits or proceedings pending or, to
the knowledge of the Parent or the Company, threatened against
or
affecting the Parent or any Subsidiary, including the Company, or
any
property of the Parent or any Subsidiary, including the Company, in
any
court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate,
could
reasonably be expected to have a Material Adverse Effect.
(b) Neither the Parent nor any Subsidiary, including the
Company, is in default under any term of any agreement or
instrument to
which it is a party or by which it is bound, or any order,
judgment,
decree or ruling of any court, arbitrator or Governmental Authority
or
is in violation of any applicable law, ordinance, rule or
regulation
(including Environmental Laws and the USA Patriot Act) of any
Governmental Authority, which default or violation, individually or
in
the aggregate, could reasonably be expected to have a Material
Adverse
Effect.
10
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5.9.
TAXES.
The Parent and its Subsidiaries, including the Company, have
filed all tax returns that are required to have been filed in any
jurisdiction,
and have paid all taxes shown to be due and payable on such returns
and all
other taxes and assessments levied upon them or their properties,
assets, income
or franchises, to the extent such taxes and assessments have become
due and
payable and before they have become delinquent, except for any
taxes and
assessments (i) the amount of which is not individually or in the
aggregate
Material or (ii) the amount, applicability or validity of which is
currently
being contested in good faith by appropriate proceedings and with
respect to
which the Parent or a Subsidiary, as the case may be, has
established adequate
reserves in accordance with GAAP. Neither the Parent nor the
Company knows of
any basis for any other tax or assessment that could reasonably be
expected to
have a Material Adverse Effect. The charges, accruals and reserves
on the books
of the Parent and its Subsidiaries, including the Company, in
respect of
Federal, state or other taxes for all fiscal periods are, in the
good faith
judgment of the Parent, adequate. The federal income tax
liabilities of the
Parent and its Subsidiaries, including the Company, have been
determined by the
Internal Revenue Service and paid for all fiscal years up to and
including the
fiscal year ended December 31, 2003.
5.10.
TITLE TO PROPERTY; LEASES.
The Parent and its Subsidiaries, including the Company, have
good and defensible title to their respective Material properties,
including all
such properties reflected in the most recent audited balance sheet
referred to
in Section 5.5 or acquired by the Company or any Subsidiary after
said date
(except as sold or otherwise disposed of in the ordinary course of
business), in
each case free and clear of Liens prohibited by this Agreement. All
leases that
individually or in the aggregate are Material are valid and
subsisting and are
in full force and effect in all material respects.
5.11.
LICENSES, PERMITS, ETC.
(a) the Parent and its Subsidiaries, including the Company,
own or possess all licenses, permits, franchises,
authorizations,
patents, copyrights, service marks, trademarks and trade names,
or
rights thereto necessary for the conduct of their businesses
without
known conflict with the rights of others;
(b) to the knowledge of the Parent and the Company, no product
of the Parent or any Subsidiary, including the Company, infringes
any
license, permit, franchise, authorization, patent, copyright,
service
mark, trademark, trade name or other right owned by any other
Person;
and
(c) to the knowledge of the Parent, there is no violation by
any Person of any right of the Parent or any of its
Subsidiaries,
including the Company, with respect to any patent, copyright,
service
mark, trademark, trade name or other right owned or used by the
Parent
or any of its Subsidiaries, including the Company;
11
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except, in each instance, for the lack of ownership or
possession,
conflicts or violations that, individually or in the aggregate,
could
not reasonably be expected to have a Material Adverse Effect.
5.12. COMPLIANCE WITH ERISA.
(a) The Parent and each ERISA Affiliate, including the
Company, have operated and administered each Plan in compliance
with
all applicable laws except for such instances of noncompliance as
have
not resulted in and could not reasonably be expected to result in
a
Material
Adverse Effect. Neither the Parent nor any ERISA Affiliate,
including the Company, has incurred any liability pursuant to Title
I
or IV of ERISA or the penalty or excise tax provisions of the
Code
relating to employee benefit plans (as defined in Section 3 of
ERISA),
and no event, transaction or condition has occurred or exists
that
could reasonably be expected to result in the incurrence of any
such
liability by the Parent or any ERISA Affiliate, including the
Company,
or in the imposition of any Lien on any of the rights, properties
or
assets of the Parent or any ERISA Affiliate, including the Company,
in
either case pursuant to Title I or IV of ERISA or to such penalty
or
excise tax provisions or to Section 401(a)(29) or 412 of the
Code,
other than such liabilities or Liens as could not be individually
or in
the aggregate Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans),
determined as
of the end of such Plan's most recently ended plan year on the
basis of
the actuarial assumptions specified for funding purposes in such
Plan's
most recent actuarial valuation report, did not exceed the
aggregate
current value of the assets of such Plan allocable to such
benefit
liabilities. The term "benefit liabilities" has the meaning
specified
in section 4001 of ERISA and the terms "current value" and
"present
value" have the meaning specified in section 3 of ERISA.
(c) The Parent and its ERISA Affiliates, including the
Company, have not incurred withdrawal liabilities (and are not
subject
to contingent withdrawal liabilities) under section 4201 or 4204
of
ERISA in respect of Multiemployer Plans that individually or in
the
aggregate are Material.
(d) The expected postretirement benefit obligation (determined
as of the last day of the Parent's most recently ended fiscal year
in
accordance with Financial Accounting Standards Board Statement No.
106,
without regard to liabilities attributable to continuation
coverage
mandated by section 4980B of the Code) of the Parent and its
ERISA
Affiliates, including the Company, is not Material.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Series 2006-A Notes hereunder will not
involve
any transaction that is subject to the prohibitions of section 406
of
ERISA or in connection with which a tax could be imposed pursuant
to
section 4975(c)(1)(A)-(D) of the Code. The representation by the
Parent
and the Company in the first sentence of this Section 5.12(e) is
made
in reliance upon and
12
<PAGE>
subject to the accuracy of your representation in Section 6.2 as to
the
sources of the funds used to pay the purchase price of the
Series
2006-A Notes to be purchased by you.
5.13.
PRIVATE OFFERING BY THE COMPANY.
None of the Parent, the Company or anyone acting on their
behalf has offered the Series 2006-A Notes or any similar
securities for sale
to, or solicited any offer to buy any of the same from, or
otherwise approached
or negotiated in respect thereof with, any Person other than you,
the Other
Purchasers and not more than one (1) other Institutional Investor,
each of which
has been offered the Series 2006-A Notes at a private sale for
investment. None
of the Parent, the Company or anyone authorized to act on their
behalf has
taken, or will take, any action that would subject the issuance or
sale of the
Series 2006-A Notes to the registration requirements of Section 5
of the
Securities Act.
5.14. USE
OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Series
2006-A Notes to repay Debt as set forth in Schedule 5.14 and for
general
corporate purposes. No part of the proceeds from the sale of the
Series 2006-A
Notes will be used, directly or indirectly, for the purpose of
buying or
carrying any margin stock within the meaning of Regulation U of the
Board of
Governors of the Federal Reserve System (12 CFR 221), or for the
purpose of
buying or carrying or trading in any securities under such
circumstances as to
involve the Company in a violation of Regulation X of said Board
(12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of
said Board (12
CFR 220). Margin stock does not constitute more than 5% of the
value of the
consolidated assets of the Company and its Subsidiaries and the
Company does not
have any present intention that margin stock will constitute more
than 5% of the
value of such assets. As used in this Section, the terms "margin
stock" and
"purpose of buying or carrying" shall have the meanings assigned to
them in said
Regulation U.
5.15.
EXISTING DEBT.
(a) Except as described therein, Schedule 5.15 sets forth a
complete and correct list of all outstanding Debt of the Parent and
its
Subsidiaries, including the Company, as of June 30, 2006, since
which
date there has been no Material change in the amounts, interest
rates,
sinking funds, installment payments or maturities of the Debt of
the
Company or its Subsidiaries. Neither the Parent nor any
Subsidiary,
including the Company, is in default and no waiver of default
is
currently in effect, in the payment of any principal or interest on
any
Debt of the Parent or such Subsidiary, including the Company, and
no
event or condition exists with respect to any Debt of the Parent or
any
Subsidiary, including the Company, that would permit (or that
with
notice or the lapse of time, or both, could permit) one or more
Persons
to cause such Debt to become due and payable before its stated
maturity
or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Parent
nor any Subsidiary, including the Company, has agreed or consented
to
cause or permit in the
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future (upon the happening of a contingency or otherwise) any of
its
property, whether now owned or hereafter acquired, to be subject to
a
Lien not permitted by Section 10.4.
5.16.
FOREIGN ASSETS CONTROL REGULATIONS, ETC.
(a) Neither the sale of the Series 2006-A 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) Neither the Parent nor any Subsidiary, including the
Company, (i) is a Person described or designated in the
Specially
Designated Nationals and Blocked Persons List of the Office of
Foreign
Assets Control or in Section 1 of the Anti-Terrorism Order or
(ii)
engages in any dealings or transactions with any such Person.
The
Parent and its Subsidiaries are in compliance, in all material
respects, with the USA Patriot Act.
(c) No part of the proceeds from the sale of the Series 2006-A
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 Parent and its
Subsidiaries,
including the Company.
5.17.
STATUS UNDER CERTAIN STATUTES.
Neither the Parent nor any Subsidiary, including the Company,
is subject to regulation under the Investment Company Act of 1940,
as amended,
the Interstate Commerce Act, as amended by the ICC Termination Act,
as amended,
or the Federal Power Act, as amended.
5.18.
ENVIRONMENTAL MATTERS.
Neither the Parent nor any Subsidiary, including the Company,
has knowledge of any claim or has received any notice of any claim,
and no
proceeding has been instituted raising any claim against the Parent
or any of
its Subsidiaries, including the Company, or any of their respective
real
properties now or formerly owned, leased or operated by any of them
or other
assets, alleging any damage to the environment or violation of any
Environmental
Laws, except, in each case, such as could not reasonably be
expected to result
in a Material Adverse Effect. Except as otherwise disclosed to you
in writing,
(a) neither the Parent nor any Subsidiary, including the
Company, has knowledge of any facts which could give rise to any
claim,
public or
private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to
real
properties now or formerly owned, leased or operated by any of
14
<PAGE>
them or to other assets or their use, except, in each case, such
as
could not reasonably be expected to result in a Material
Adverse
Effect;
(b) neither the Parent nor any Subsidiary, including the
Company, has stored any Hazardous Materials on real properties now
or
formerly owned, leased or operated by any of them and has not
disposed
of any Hazardous Materials in a manner contrary to any
Environmental
Laws in each case in any manner that could reasonably be expected
to
result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Parent or any of its Subsidiaries, including
the
Company, are in compliance with applicable Environmental Laws,
except
where failure to comply could not reasonably be expected to result
in a
Material Adverse Effect.
5.19.
SOLVENCY OF SUBSIDIARY GUARANTORS.
After giving effect to the transactions contemplated herein
and after giving due consideration to any rights of contribution
(i) each
Subsidiary Guarantor has received fair consideration and reasonably
equivalent
value for the incurrence of its obligations under the Subsidiary
Guaranty, (ii)
the fair value of the assets of each Subsidiary Guarantor (both at
fair
valuation and at present fair saleable value) exceeds its
liabilities, (iii)
each Subsidiary Guarantor is able to and expects to be able to pay
its debts as
they mature, and (iv) each Subsidiary Guarantor has capital
sufficient to carry
on its business as conducted and as proposed to be conducted.
6.
REPRESENTATIONS OF THE PURCHASERS.
6.1.
PURCHASE FOR INVESTMENT.
You represent that you are purchasing the Notes for your own
account or for one or more separate accounts maintained by you or
for the
account of one or more pension or trust funds and not with a view
to the
distribution thereof, provided that the disposition of your or
their property
shall at all times be within your or their control. You understand
that the
Notes have not been registered under the Securities Act and may be
resold only
if registered pursuant to the provisions of the Securities Act or
if an
exemption from registration is available, except under
circumstances where
neither such registration nor such an exemption is required by law,
and that the
Company is not required to register the Notes. You represent that
you are an
"accredited investor" within the meaning of subparagraph (a)(1),
(2), (3) or (7)
of Rule 501 of Regulation D under the Securities Act.
6.2.
SOURCE OF FUNDS.
You represent that at least one of the following statements is
an accurate representation as to each source of funds (a "Source")
to be used by
you to pay the purchase price of the Notes to be purchased by you
hereunder:
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(a) the Source is an "insurance company general account" (as
the term is defined in the United States Department of Labor's
Prohibited Transaction Exemption ("PTE") 95-60) in respect of which
the
reserves and liabilities (as defined by the annual statement for
life
insurance companies approved by the National Association of
Insurance
Commissioners (the "NAIC Annual Statement")) for the general
account
contract(s) held by or on behalf of any employee benefit plan
together
with the amount of the reserves and liabilities for the general
account
contract(s) held by or on behalf of any other employee benefit
plans
maintained by the same employer (or affiliate thereof as defined in
PTE
95-60) or by the same employee organization in the general account
do
not exceed 10% of the total reserves and liabilities of the
general
account (exclusive of separate account liabilities) plus surplus as
set
forth in the NAIC Annual Statement filed with such Purchaser's
state of
domicile; or
(b) the Source is a separate account that is maintained solely
in connection with such Purchaser's fixed contractual obligations
under
which the amounts payable, or credited, to any employee benefit
plan
(or its related trust) that has any interest in such separate
account
(or to any participant or beneficiary of such plan (including
any
annuitant)) are not affected in any manner by the investment
performance of
the separate account; or
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January
29,
1990), or (ii) a bank collective investment fund, within the
meaning of
PTE 91-38 (issued August 12, 1991) and, except as you have
disclosed to
the Company in writing pursuant to this paragraph (c), no
employee
benefit plan or group of plans maintained by the same employer
or
employee organization beneficially owns more than 10% of all
assets
allocated to such pooled separate account or collective
investment
fund; or
(d) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of PTE 84-14 (the "QPAM
Exemption"))
managed by a "qualified professional asset manager" or "QPAM"
(within
the meaning of Part V of the QPAM Exemption), no employee
benefit
plan's assets that are included in such investment fund, when
combined
with the assets of all other employee benefit plans established
or
maintained by the same employer or by an affiliate (within the
meaning
of Section V(c)(1) of the QPAM Exemption) of such employer or by
the
same employee organization and managed by such QPAM, exceed 20% of
the
total client assets managed by such QPAM, the conditions of Part
I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor
a
person controlling or controlled by the QPAM (applying the
definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or
more
interest in the Company or any Guarantor and (i) the identity of
such
QPAM and (ii) the names of all employee benefit plans whose assets
are
included in such investment fund have been disclosed to the Company
in
writing pursuant to this clause (d); or
(e) the Source constitutes assets of a "plan(s)" (within the
meaning of Section IV of PTE 96-23 (the "INHAM Exemption")) managed
by
an "in-house asset manager" or "INHAM" (within the meaning of Part
IV
of the INHAM exemption), the conditions
16
<PAGE>
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 or any Guarantor and (i)
the
identity of such INHAM and (ii) the name(s) of the employee
benefit
plan(s) whose assets constitute the Source have been disclosed to
the
Company in writing pursuant to this clause (e); or
(f) the Source is a governmental plan; or
(g) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more
employee
benefit plans, each of which has been identified to the Company
in
writing pursuant to this paragraph (g); or
(h) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental
plan" and "separate account" shall have the respective meanings
assigned to such
terms in section 3 of ERISA.
7.
INFORMATION AS TO THE PARENT AND THE COMPANY.
7.1.
FINANCIAL AND BUSINESS INFORMATION.
The Parent will deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 60 days (or such other
shorter period within which Quarterly Reports on Form 10-Q are
required
to be timely filed with the Securities and Exchange Commission,
including any extension permitted by Rule 12b-25 of the Exchange
Act)
after the end of each quarterly fiscal period in each fiscal year
of
the Parent (other than the last quarterly fiscal period of each
such
fiscal year), duplicate copies of,
(i) a consolidated balance sheet of the Parent and
its Subsidiaries, including the Company, as at the end of such
quarter,
(ii) consolidated statements of income and
shareholders' equity of the Parent and its Subsidiaries,
including the Company, for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal
year ending with such quarter, and
(iii) consolidated statements of cash flows of the
Parent and its Subsidiaries, including the Company, for such
quarter or (in the case of the second and third quarters) for
the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for
the
corresponding periods in the previous fiscal year, all in
reasonable
detail, prepared in accordance with GAAP
17
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applicable to
quarterly financial statements generally, and certified
by a Senior Financial Officer as fairly presenting, in all
material
respects, the financial position of the companies being reported on
and
their results of operations and cash flows, subject to changes
resulting from year-end adjustments, provided that delivery within
the
time period specified above of copies of the Parent's Quarterly
Report
on Form 10-Q prepared in compliance with the requirements therefor
and
filed with the Securities and Exchange Commission shall be deemed
to
satisfy the requirements of this Section 7.1(a);
(b) Annual Statements -- within 105 days (or such other
shorter period within which Annual Reports on Form 10-K are
required to
be timely filed with the Securities and Exchange Commission,
including
any extension permitted by Rule 12b-25 of the Exchange Act) after
the
end of each fiscal year of the Parent, duplicate copies of,
(i) a consolidated balance sheet of the Parent and
its Subsidiaries, including the Company, as at the end of such
year, and
(ii) consolidated statements of income, shareholders'
equity and cash flows of the Parent and its Subsidiaries,
including the Company, for such year,
setting forth in each case in comparative form the figures for
the
previous fiscal year, all in reasonable detail, prepared in
accordance
with GAAP, and accompanied by an opinion thereon of independent
certified public accountants of recognized regional or national
standing, which opinion shall state that such financial
statements
present fairly, in all material respects, the financial position of
the
companies being reported upon and their results of operations and
cash
flows and have been prepared in conformity with GAAP, and that
the
examination of such accountants in connection with such
financial
statements has been made in accordance with generally accepted
auditing
standards, and that such audit provides a reasonable basis for
such
opinion in the circumstances; provided that the delivery within
the
time period specified above of the Parent's Annual Report on Form
10-K
for such fiscal year (together with the Parent's annual report
to
shareholders, if any, prepared pursuant to Rule 14a-3 under the
Exchange Act) prepared in accordance with the requirements therefor
and
filed with the Securities and Exchange Commission shall be deemed
to
satisfy the requirements of this Section (b);
(c) Unrestricted Subsidiaries -- if, at the time of delivery
of any financial statements pursuant to Section 7.1(a) or (b),
Unrestricted Subsidiaries account for more than 10% of (i) the
consolidated total assets of the Parent and its Subsidiaries,
including
the Company, reflected in the consolidated balance sheet included
in
such financial statements or (ii) the consolidated revenues of
the
Parent and its Subsidiaries, including the Company, reflected in
the
consolidated statement of income included in such financial
statements,
an unaudited balance sheet for all Unrestricted Subsidiaries taken
as
whole as at the end of the fiscal period included in such
financial
statements and the related unaudited statements of income,
stockholders' equity and cash flows for such Unrestricted
Subsidiaries
for such period, together with consolidating statements reflecting
all
eliminations or
adjustments necessary to reconcile such group financial
statements to the consolidated financial statements of the Parent
and
its Subsidiaries,
18
<PAGE>
including the Company, shall be delivered together with the
financial
statements required pursuant to Sections 7.1(a) and (b);
(d) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice
or
proxy statement sent by the Parent or any Subsidiary, including
the
Company, to public securities holders generally, and (ii) each
regular
or periodic report, each registration statement that shall have
become
effective (without exhibits except as expressly requested by
such
holder), and each final prospectus and all amendments thereto filed
by
the Parent or any Subsidiary, including the Company, with the
Securities and Exchange Commission and of all press releases and
other
statements made available generally by the Company or any
Subsidiary to
the public concerning developments that are Material;
(e) Notice of Default or Event of Default -- promptly, and in
any event within five Business Days after a Responsible Officer
becoming aware of the existence of any Default or Event of Default,
a
written notice specifying the nature and period of existence
thereof
and
what action the Parent or the Company is taking or proposes to
take
with respect thereto;
(f) ERISA Matters -- promptly, and in any event within five
Business Days after a Responsible Officer becoming aware of any of
the
following, a written notice setting forth the nature thereof and
the
action, if any, that the Parent or an ERISA Affiliate, including
the
Company, proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof;
or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Parent or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Parent or an
ERISA Affiliate, including the Company, pursuant to Title I or
IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, or in the imposition
of any Lien on any of the rights, properties or assets of the
Parent or an ERISA Affiliate, including the Company, pursuant
to Title I or IV of ERISA or such penalty or excise tax
provisions, if such liability or Lien, taken together with any
other such liabilities or Liens then existing, could
reasonably be expected to have a Material Adverse Effect;
19
<PAGE>
(g) Notices from Governmental Authority -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice
to
the Company or any Subsidiary from any Federal or state
Governmental
Authority relating to any order, ruling, statute or other law
or
regulation that could reasonably be expected to have a Material
Adverse
Effect;
(h) Requested Information -- with reasonable promptness, such
other data and information relating to the business,
operations,
affairs, financial condition, assets or properties of the Parent or
any
of its Subsidiaries, including the Company, or relating to the
ability
of the Parent or the Company to perform its obligations hereunder
and
under the Notes as from time to time may be reasonably requested by
any
such holder of Notes; and
(i) Supplements to Agreement -- in the event an additional
series of Notes is, or is proposed to be, issued under this
Agreement,
promptly, and in any event within 10 Business Days after execution
and
delivery thereof, a true copy of the Supplement pursuant to which
such
Notes are to be, or were, issued.
7.2.
OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be
accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Parent was
in
compliance with the requirements of Section 10.1 through Section
10.9,
inclusive, during the quarterly or annual period covered by the
statements then being furnished (including with respect to each
such
Section, where applicable, the calculations of the maximum or
minimum
amount, ratio or percentage, as the case may be, permissible under
the
terms of such Sections, and the calculation of the amount, ratio
or
percentage then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be
made,
under his or her supervision, a review of the transactions and
conditions of the Parent and its Subsidiaries, including the
Company,
from the beginning of the quarterly or annual period covered by
the
statements then being furnished to the date of the certificate and
that
such review shall not have disclosed the existence during such
period
of any condition or event that constitutes a Default or an Event
of
Default or, if any such condition or event existed or exists
(including
any such event or condition resulting from the failure of the
Parent or
any Subsidiary, including the Company, to comply with any
Environmental
Law), specifying the nature and period of existence thereof and
what
action the Parent or the Company shall have taken or proposes to
take
with respect thereto.
20
<PAGE>
7.3.
INSPECTION.
The Parent and the Company will permit the representatives of
each holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior
notice
to
the Parent or the Company, to visit the principal executive
office
of the Parent or the Company, to discuss the affairs, finances
and
accounts of the Parent and its Subsidiaries, including the
Company,
with the Parent's and the Company's officers, and (with the consent
of
the Parent and the Company, which consent will not be
unreasonably
withheld) its independent public accountants, and (with the consent
of
the Parent and the Company which consent will not be
unreasonably
withheld), to visit the other offices and properties of the Parent
and
each Subsidiary, including the Company, all at such reasonable
times
and as often as may be reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists,
at the expense of the Company, to visit and inspect any of the
offices
or properties of the Parent or any Subsidiary, including the
Company,
to examine all their respective books of account, records, reports
and
other papers, to make copies and extracts therefrom, and to
discuss
their respective affairs, finances, and accounts with their
respective
officers and independent public accountants (and by this provision
the
Parent and the Company authorize said accountants to discuss
the
affairs, finances and accounts of the Parent and its
Subsidiaries,
including the Company), all at such times and as often as may
be
requested.
8.
PREPAYMENT OF THE NOTES.
8.1.
REQUIRED PREPAYMENTS OF SERIES 2006-A NOTES.
No regularly scheduled prepayments are due on the Series
2006-A Notes prior to their stated maturity.
8.2.
OPTIONAL PREPAYMENTS.
The Company may, at its option, as provided below, prepay at
any time all, or from time to time any part of, the Notes in an
amount not less
than $1,000,000 in the aggregate in the case of a partial
prepayment.
(a) Fixed Rate Notes. Prepayments of fixed rate Notes shall be
made at 100% of the principal amount so prepaid, plus the
Make-Whole
Amount determined for the prepayment date with respect to such
principal amount. The Company will give each holder of fixed rate
Notes
written notice of each optional prepayment under this Section
8.2(a)
not less than 30 days and not more than 60 days prior to the date
fixed
for such prepayment. Each such notice shall specify such date
(which
shall be a Business Day), the aggregate principal amount of the
fixed
rate Notes to be prepaid on such date,
21
<PAGE>
the principal amount of each fixed rate Note held by such holder to
be
prepaid (determined in accordance with Section 8.3), and the
interest
to be paid on the prepayment date with respect to such principal
amount
being prepaid, and shall be accompanied by a certificate of a
Senior
Financial Officer as to the estimated Make-Whole Amount due in
connection with such prepayment (calculated as if the date of
such
notice were the date of the prepayment), setting forth the details
of
such computation. Two Business Days prior to such prepayment,
the
Company shall deliver to each holder of fixed rate Notes a
certificate
of a Senior Financial Officer specifying the calculation of
such
Make-Whole Amount as of the specified prepayment date.
(b) Floating Rate Notes. Prepayments of Series 2006-A Notes
shall be made at 100% of the principal amount so prepaid, plus
the
prepayment premium set forth below, and if such prepayment is to
occur
on any date other than an interest payment date, the LIBOR
Breakage
Amount, if any.
<TABLE>
<CAPTION>
IF PREPAID DURING THE PERIOD
PREPAYMENT PREMIUM
----------------------------
------------------
<S>
<C>
September 28, 2006 through
September 29, 2007
1.0%
September 30, 2007 and thereafter
0.0%
</TABLE>
The terms on which floating rate Notes other than the Series
2006-A
Notes may be prepaid at the option of the Company will be set forth
in
the Supplement pursuant to which such Notes are issued.
The Company will give each holder of floating rate Notes to be
prepaid written notice of each optional prepayment under this
Section
8.2(b) not less than 30 days and not more than 60 days prior to
the
date fixed for such prepayment. Each such notice shall specify
such
date, the aggregate principal amount of floating rate Notes to
be
prepaid on such date, the principal amount of each floating rate
Note
held by such holder to be prepaid (determined in accordance
with
Section 8.3), the interest to be paid on the prepayment date
with
respect to such principal amount being prepaid and the amount of
any
prepayment premium and LIBOR Breakage Amount to be paid.
8.3.
ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes, the
principal amount of the Notes to be prepaid shall be allocated
among all of the
Notes at the time outstanding in proportion, as nearly as
practicable, to the
respective unpaid principal amounts thereof not theretofore called
for
prepayment.
8.4.
MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this
Section 8, the principal amount of each Note to be prepaid shall
mature and
become due and payable on the date fixed for such prepayment (which
shall be a
Business Day), together with interest on such principal
22
<PAGE>
amount accrued to such date and any applicable Make-Whole Amount,
prepayment
premium and/or LIBOR Breakage Amount. From and after such date,
unless the
Company shall fail to pay such principal amount when so due and
payable,
together with the interest and any applicable Make-Whole Amount,
prepayment
premium and/or LIBOR Breakage Amount, as aforesaid, interest on
such principal
amount shall cease to accrue. Any Note paid or prepaid in full
shall be
surrendered to the Company and canceled and shall not be reissued,
and no Note
shall be issued in lieu of any prepaid principal amount of any
Note.
8.5.
PURCHASE OF NOTES.
Neither the Parent nor the Company will, and will not permit
any Affiliate to, purchase, redeem, prepay or otherwise acquire,
directly or
indirectly, any of the outstanding Notes except (a) upon the
payment or
prepayment of the Notes in accordance with the terms of this
Agreement and the
Notes or (b) pursuant to an offer to purchase made by the Company
or an
Affiliate pro rata to the holders of all Notes at the time
outstanding upon the
same terms and conditions. Any such offer shall provide each holder
with
sufficient information to enable it to make an informed decision
with respect to
such offer, and shall remain open for at least 30 Business Days. If
the holders
of more than 25% of the principal amount of the Notes then
outstanding accept
such offer, the Company shall promptly notify the remaining holders
of such fact
and the expiration date for the acceptance by holders of Notes of
such offer
shall be extended by the number of days necessary to give each such
remaining
holder at least ten Business Days from its receipt of such notice
to accept such
offer. The Company will promptly cancel all Notes acquired by it or
any
Affiliate pursuant to any payment, prepayment or purchase of Notes
pursuant to
any provision of this Agreement and no Notes may be issued in
substitution or
exchange for any such Notes.
8.6.
MAKE-WHOLE AMOUNT.
The term "MAKE-WHOLE AMOUNT" means, with respect to any fixed
rate Note, an amount equal to the excess, if any, of the Discounted
Value of the
Remaining Scheduled Payments with respect to the Called Principal
of such fixed
rate Note over the amount of such Called Principal, provided that
the Make-Whole
Amount may in no event be less than zero. For the purposes of
determining the
Make-Whole Amount, the following terms have the following
meanings:
"CALLED PRINCIPAL" means, with respect to any fixed rate Note,
the principal of such fixed rate Note that is to be prepaid
pursuant to
Section 8.2(a) or has become or is declared to be immediately due
and
payable pursuant to Section 12.1, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any fixed rate Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called Principal
from
their respective scheduled due dates to the Settlement Date
with
respect to such Called Principal, in accordance with accepted
financial
practice and at a discount factor (applied on the same periodic
basis
as that on
23
<PAGE>
which interest on such fixed rate Notes is payable) equal to
the
Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any fixed rate Note, .50% over the yield to
maturity
implied by (i) the yields reported, as of 10:00 A.M. (New York
City
time) on the second Business Day preceding the Settlement Date
with
respect to such Called Principal, on the display designated as the
"PX1
Screen" on the Bloomberg Financial Market Service (or such
other
display as may replace the PX1 Screen on Bloomberg Financial
Market
Service) for actively traded U.S. Treasury securities having a
maturity
equal to the Remaining Average Life of such Called Principal as of
such
Settlement Date, or (ii) if such yields are not reported as of
such
time or the yields reported as of such time are not ascertainable,
the
Treasury Constant Maturity Series Yields reported, for the latest
day
for which such yields have been so reported as of the second
Business
Day preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519) (or
any
comparable successor publication) for actively traded U.S.
Treasury
securities having a constant maturity equal to the Remaining
Average
Life of such Called Principal as of such Settlement Date. Such
implied
yield will be determined, if necessary, by (a) converting U.S.
Treasury
bill quotations to bond-equivalent yields in accordance with
accepted
financial practice and (b) interpolating linearly between (1)
the
actively traded U.S. Treasury security with the maturity closest to
and
greater than the Remaining Average Life and (2) the actively
traded
U.S. Treasury security with the maturity closest to and less than
the
Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest
one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the
sum
of the products obtained by multiplying (a) the principal component
of
each Remaining Scheduled Payment with respect to such Called
Principal
by (b) the number of years (calculated to the nearest one-twelfth
year)
that will elapse between the Settlement Date with respect to
such
Called Principal and the scheduled due date of such Remaining
Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any fixed rate Note, all payments of such
Called
Principal and interest thereon that could be due after the
Settlement
Date with respect to such Called Principal if no payment of such
Called
Principal were made prior to its scheduled due date, provided that
if
such Settlement Date is not a date on which interest payments are
due
to be made under the terms of such fixed rate Notes, then the
amount of
the next succeeding scheduled interest payment will be reduced by
the
amount of interest accrued to such Settlement Date and required to
be
paid on such Settlement Date pursuant to Section 8.2(a) or
12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any fixed rate Note, the date on which such Called Principal is
to
be prepaid pursuant to Section 8.2(a) or has become or is declared
to
be immediately due and payable pursuant to Section 12.1, as the
context
requires.
24
<PAGE>
8.7.
LIBOR BREAKAGE AMOUNT.
The term "LIBOR Breakage Amount" means any loss, cost or
expense reasonably incurred by any holder of a floating rate Note
as a result of
any payment or prepayment of such floating rate Note (whether
voluntary,
mandatory, automatic, by reason of acceleration or otherwise) on a
day other
than an interest payment date or at scheduled maturity thereof,
and, without
duplication, any loss or expense arising from the liquidation or
reemployment of
funds obtained by such holder or from fees payable to terminate the
deposits
from which such funds were obtained. Any such loss, cost or expense
shall be
limited to the time period from the date of such prepayment through
the earlier
of the next interest payment date or the maturity of such floating
rate Note.
Each holder of a floating rate Note shall determine the LIBOR
Breakage Amount
with respect to the principal amount of its floating rate Notes
then being paid
or prepaid (or required to be paid or prepaid) by written notice to
the Company
setting forth such determination in reasonable detail with
supporting
calculations not less than two Business Days prior to the date of
prepayment.
Each such determination shall be conclusive absent manifest
error.
9.
AFFIRMATIVE COVENANTS.
Each of the Parent and the Company covenants that so long as
any of the Notes are outstanding:
9.1.
COMPLIANCE WITH LAW.
The Parent and the Company will, and will cause each other
Subsidiary to, comply with all laws, ordinances or governmental
rules or
regulations to which each of them is subject, including,
Environmental Laws, and
will obtain and maintain in effect all licenses, certificates,
permits,
franchises and other governmental authorizations necessary to the
ownership of
their respective properties or to the conduct of their respective
businesses, in
each case to the extent necessary to ensure that non-compliance
with such laws,
ordinances or governmental rules or regulations or failures to
obtain or
maintain in effect such licenses, certificates, permits, franchises
and other
governmental authorizations could not, individually or in the
aggregate,
reasonably be expected to have a Material Adverse Effect.
9.2.
INSURANCE.
The Parent and
the Company will, and will cause each
Restricted Subsidiary to, maintain, with financially sound and
reputable
insurers, insurance with respect to their respective properties and
businesses
against such casualties and contingencies, of such types, on such
terms and in
such amounts (including deductibles, co-insurance and
self-insurance, if
customary reserves are maintained with respect thereto) as is
customary in the
case of entities of established reputations engaged in the same or
a similar
business and similarly situated.
25
<PAGE>
9.3.
MAINTENANCE OF PROPERTIES.
The Parent and the Company will, and will cause each
Restricted Subsidiary to, maintain and keep, or cause to be
maintained and kept,
their respective properties in good repair, working order and
condition (other
than ordinary wear and tear), so that the business carried on in
connection
therewith may be properly conducted at all times, provided that
this Section
shall not prevent the Parent or any Subsidiary, including the
Company, from
discontinuing the operation and the maintenance of any of its
properties if such
discontinuance is desirable in the conduct of its business and the
Parent has
concluded that such discontinuance could not, individually or in
the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.4.
PAYMENT OF TAXES.
The Parent and the Company will, and will cause each other
Subsidiary to, file all tax returns required to be filed in any
jurisdiction and
to pay and discharge all taxes shown to be due and payable on such
returns and
all other taxes, assessments, governmental charges, or levies
imposed on them or
any of their properties, assets, income or franchises, to the
extent such taxes
and assessments have become due and payable and before they have
become
delinquent, and all claims for which sums have become due and
payable that have
or might become a Lien on properties or assets of the Parent or any
Subsidiary,
including the Company, provided that neither the Parent nor any
Subsidiary,
including the Company, need pay any such tax or assessment or
claims if (i) the
amount, applicability or validity thereof is contested by the
Parent or such
Subsidiary on a timely basis in good faith and in appropriate
proceedings, and
the Parent or a Subsidiary, including the Company, has established
adequate
reserves therefor in accordance with GAAP on the books of the
Parent or such
Subsidiary or (ii) the nonpayment of all such taxes and assessments
in the
aggregate could not reasonably be expected to have a Material
Adverse Effect.
9.5.
CORPORATE EXISTENCE, ETC.
Each of the Parent and the Company will at all times preserve
and keep in full force and effect its corporate existence. Subject
to Sections
10.5 and 10.6, the Parent and the Company will at all times
preserve and keep in
full force and effect the corporate existence of each Restricted
Subsidiary
(unless merged into the Parent or a Wholly Owned Restricted
Subsidiary,
including the Company) and all rights and franchises of the Parent
and its
Restricted Subsidiaries, including the Company, unless, in the good
faith
judgment of the Parent, the termination of or failure to preserve
and keep in
full force and effect each corporate existence, right or franchise
could not,
individually or in the aggregate, have a Material Adverse
Effect.
9.6.
ADDITIONAL SUBSIDIARY GUARANTORS.
The Parent and the Company will cause any Subsidiary that
(whether or not required by the terms of the Credit Agreement) is
to become a
party to, or guarantee, Debt in respect of the Credit Agreement or
any other
Senior Debt, to enter into the Subsidiary Guaranty concurrently
therewith and as
a part thereof to deliver to each of the holders:
26
<PAGE>
(a) a copy of an executed joinder to the Subsidiary Guaranty;
(b) a certificate signed by a Responsible Officer confirming
the accuracy of the
representations and warranties in Sections 5.2,
5.6, 5.7 and 5.19, with respect to such Subsidiary and the
Subsidiary
Guaranty as it relates to such Subsidiary, as applicable; and
(c) an opinion of counsel (who may be counsel for the Company)
reasonably satisfactory to the Required Holders addressed to
each
holder of the Notes to the effect that the Subsidiary Guaranty of
such
Person has been duly authorized, executed and delivered and that
the
Subsidiary Guaranty constitutes the legal, valid and binding
contract
and agreement of such Person enforceable in accordance with its
terms,
except as an enforcement of such terms may be limited by
bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting
the
enforcement of creditors' rights generally and by general
equitable
principles.
9.7.
RANKING OF NOTES.
The Debt evidenced by the Notes will at all times rank at
least pari passu with all of the Company's outstanding unsecured
Senior Debt.
10. NEGATIVE
COVENANTS.
Each of the Parent and the Company covenants that so long as
any of the Notes are outstanding:
10.1.
CONSOLIDATED DEBT.
The Parent will not permit the ratio of Consolidated Debt (as
of the end of any fiscal quarter of the Parent) to Consolidated
EBITDA (for the
Parent's then most recently completed four fiscal quarters) (a) to
be greater
than 3.50 to 1.00 at any time or (b) to be greater than 3.25 to
1.00 for more
than two consecutive fiscal quarters.
10.2.
INTEREST COVERAGE.
The Parent will not permit the ratio of Consolidated EBIT to
Consolidated Interest Expense (in each case for the Parent's then
most recently
completed four fiscal quarters) to be less than 2.0 to 1.0 at any
time.
10.3.
PRIORITY DEBT.
The Parent and the Company will not permit Priority Debt to
exceed 20% of Consolidated Net Worth (determined as of the end of
the Parent's
most recently completed fiscal quarter) at any time.
27
<PAGE>
10.4.
LIENS.
The Parent and the Company will not, and will not permit any
Restricted Subsidiary to, permit to exist, create, assume or incur,
directly or
indirectly, any Lien on its properties or assets, whether now owned
or hereafter
acquired, unless the Notes are equally and ratably secured by a
Lien on the same
property and assets pursuant to an agreement reasonably acceptable
to the
Required Holders, except:
(a) Liens for taxes, assessments or governmental charges not
then due and delinquent or the nonpayment of which is permitted
by
Section 9.4;
(b) Liens incidental to the conduct of business or the
ownership of properties and assets (including landlords',
lessors',
carriers', operators', warehousemen's, mechanics', materialmen's
and
other similar Liens) and Liens to secure the performance of
bids,
tenders, leases or trade contracts, or to secure statutory
obligations
(including obligations under workers compensation, unemployment
insurance and other social security legislation), surety or
appeal
bonds or other Liens of like general nature incurred in the
ordinary
course of business and not in connection with the borrowing of
money;
(c) encumbrances in the nature of leases, subleases, zoning
restrictions, easements, rights of way and other rights and
restrictions of record on the use of real property and defects in
title
arising or incurred in the ordinary course of business, which,
individually and in the aggregate, do not materially impair the use
or
value of the property or assets subject thereto;
(d) any attachment or judgment Lien, unless the judgment it
secures has not, within 60 days after the entry thereof, been
discharged or execution thereof stayed pending appeal, or has not
been
discharged within 60 days after the expiration of any such
stay;
(e) Liens securing Debt of a Restricted Subsidiary to the
Parent or to another Restricted Subsidiary, including the
Company;
(f) Liens (i) existing on property at the time of its
acquisition by the Parent or a Restricted Subsidiary, including
the
Company, and not created in contemplation thereof, whether or not
the
Debt secured by such Lien is assumed by the Parent or a
Restricted
Subsidiary; including the Company, or (ii) on property created
contemporaneously with its acquisition or within 365 days of
the
acquisition or
completion of construction or development thereof to
secure or provide for all or a portion of the purchase price or
cost of
the acquisition, construction or development of such property after
the
date of Closing; or (iii) existing on property of a Person at the
time
such Person is merged or consolidated with, or becomes a
Restricted
Subsidiary of, or substantially all of its assets are acquired by,
the
Parent or a Restricted Subsidiary, including the Company, and
not
created in contemplation thereof; provided that in the case of
clauses
(i), (ii) and (iii) such Liens do not extend to additional property
of
the Parent or any Restricted Subsidiary, including the Company,
(other
than property that is an improvement to or is acquired for specific
use
in
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connection with the subject property) and that the aggregate
principal
amount of Debt secured by each such Lien does not exceed the
fair
market value (determined in good faith by one or more officers of
the
Parent to whom authority to enter into such transaction has
been
delegated by the board of directors of the Parent) of the
property
subject thereto;
(g) Liens resulting from extensions, renewals or replacements
of Liens permitted by paragraphs (e), (f) and (g), provided that
(i)
there is no increase in the principal amount or decrease in
maturity of
the Debt secured thereby at the time of such extension, renewal
or
replacement, (ii) any new Lien attaches only to the same
property
theretofore subject to such earlier Lien and (iii) immediately
after
such extension, renewal or replacement no Default or Event of
Default
would exist; and
(h) Liens securing Debt not otherwise permitted by paragraphs
(a) through (g) of this Section 10.4, provided that Priority Debt
does
not exceed 20% of Consolidated Net Worth at any time.
10.5.
MERGERS, CONSOLIDATIONS, ETC.
The Parent and the Company will not, and will not permit any
Restricted Subsidiary to, consolidate with or merge with any other
Person or
convey, transfer, sell or lease all or substantially all of its
assets in a
single transaction or series of transactions to any Person except
that:
(a) the Company may consolidate or merge with the Parent or
convey, transfer, sell or lease all or substantially all of its
assets
in a single transaction or series of transactions to the
Parent,
provided that the Parent is the successor or survivor; and
(b) the Parent may consolidate or merge with any other Person
or convey, transfer, sell or lease all or substantially all of
its
assets in a single transaction or series of transactions to any
Person,
provided that:
(i) the
successor formed by such consolidation or the
survivor of such merger or the Person that acquires by
conveyance, transfer, sale or lease of all or substantially
all of the assets of the Parent as an entirety, as the case
may be, shall be a solvent corporation organized and existing
under the laws of the United States or any state thereof
(including the District of Columbia), and, if the Parent is
not such corporation, such corporation (y) shall have exec
