<PAGE>
EXHIBIT 10(t)
EXECUTION COPY
================================================================================
G&K SERVICES, INC.
$75,000,000 Floating Rate Senior Notes
due June 30, 2015
----------------
NOTE PURCHASE AGREEMENT
----------------
Dated as of June 15, 2005
================================================================================
<PAGE>
TABLE OF CONTENTS
(not part of the Agreement)
<TABLE>
<CAPTION>
SECTION
PAGE
<S>
<C>
SECTION 1.
AUTHORIZATION OF
NOTES.....................................................
1
Section 1.1
Description of
Notes..................................................
1
Section 1.2 Interest
Rate.........................................................
1
SECTION 2.
SALE AND PURCHASE OF NOTES; SUBSIDIARY
GUARANTY............................ 2
Section 2.1 Sale and
Purchase of Notes............................................
2
Section 2.2 Subsidiary
Guaranty...................................................
2
SECTION 3.
CLOSING....................................................................
3
SECTION 4.
CONDITIONS TO
CLOSING......................................................
3
Section 4.1
Representations and
Warranties........................................ 3
Section 4.2
Performance; No
Default............................................... 3
Section 4.3 Compliance
Certificates...............................................
4
Section 4.4 Opinions
of Counsel...................................................
4
Section 4.5 Purchase
Permitted By Applicable Law, Etc.............................
4
Section 4.6 Sale of
Other Notes...................................................
5
Section 4.7 Payment of
Special Counsel Fees.......................................
5
Section 4.8 Private
Placement Number..............................................
5
Section 4.9 Changes in
Corporate Structure........................................
5
Section 4.10 Subsidiary
Guaranty...................................................
5
Section 4.11 Funding
Instructions..................................................
5
Section 4.12 Proceedings and
Documents............................................. 5
SECTION 5.
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.............................. 5
Section 5.1
Organization; Power and
Authority..................................... 5
Section 5.2
Authorization,
Etc....................................................
6
Section 5.3
Disclosure............................................................
6
Section 5.4
Organization and Ownership of Shares of Subsidiaries;
Affiliates...... 7
Section 5.5 Financial
Statements; Material Liabilities............................
7
Section 5.6 Compliance
with Laws, Other Instruments, Etc..........................
8
Section 5.7
Governmental Authorizations,
Etc...................................... 8
Section 5.8
Litigation; Observance of Agreements, Statutes and
Orders............. 8
Section 5.9
Taxes.................................................................
8
Section 5.10 Title to
Property; Leases.............................................
9
Section 5.11 Licenses,
Permits, Etc................................................
9
Section 5.12 Compliance with
ERISA................................................. 9
</TABLE>
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<PAGE>
TABLE OF CONTENTS
(not part of the Agreement)
<TABLE>
<CAPTION>
SECTION
PAGE
<S>
<C>
Section 5.13 Private Offering
by the Company....................................... 10
Section 5.14 Use of Proceeds;
Margin Regulations................................... 11
Section 5.15 Existing Debt;
Future Liens...........................................
11
Section 5.16 Foreign Assets
Control Regulations, Etc...............................
11
Section 5.17 Status under
Certain Statutes.........................................
12
Section 5.18 Environmental
Matters.................................................
12
Section 5.19 Notes Rank Pari
Passu................................................. 13
SECTION 6.
REPRESENTATIONS OF THE
PURCHASERS.......................................... 13
Section 6.1 Purchase
for Investment...............................................
13
Section 6.2 Accredited
Investor...................................................
13
Section 6.3 Source of
Funds.......................................................
13
SECTION 7.
INFORMATION AS TO THE
COMPANY.............................................. 15
Section 7.1 Financial
and Business Information....................................
15
Section 7.2 Officer's
Certificate.................................................
18
Section 7.3
Visitation............................................................
18
SECTION 8.
PAYMENT OF THE
NOTES.......................................................
19
Section 8.1 Required
Prepayments..................................................
19
Section 8.2 Optional
Prepayments..................................................
19
Section 8.3 Allocation
of Partial Prepayments.....................................
20
Section 8.4 Maturity;
Surrender, Etc..............................................
20
Section 8.5 Purchase
of Notes.....................................................
20
Section 8.6 Change of
Control.....................................................
20
SECTION 9.
AFFIRMATIVE
COVENANTS......................................................
21
Section 9.1 Compliance
with Law...................................................
21
Section 9.2
Insurance.............................................................
21
Section 9.3
Maintenance of
Properties.............................................
22
Section 9.4 Payment of
Taxes and Claims...........................................
22
Section 9.5 Corporate
Existence, Etc..............................................
22
Section 9.6
Designation of
Subsidiaries...........................................
22
Section 9.7 Notes and
Subsidiary Guaranty to Rank Pari Passu......................
23
Section 9.8 Books and
Records.....................................................
23
Section 9.9 Line of
Business......................................................
23
Section 9.10 Additional
Subsidiary Guarantors......................................
23
</TABLE>
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<PAGE>
TABLE OF CONTENTS
(not part of the Agreement)
<TABLE>
<CAPTION>
SECTION
PAGE
<S>
<C>
SECTION 10.
NEGATIVE
COVENANTS.........................................................
24
Section 10.1 Maintenance of
Consolidated Net Worth.................................
24
Section 10.2 Consolidated
Debt to Consolidated EBITDA Ratio........................
24
Section 10.3 Limitation on
Priority Debt...........................................
24
Section 10.4 Limitation on
Liens...................................................
24
Section 10.5 Merger and
Consolidation..............................................
26
Section 10.6 Sales of
Assets.......................................................
27
Section 10.7 Transactions
with Affiliates..........................................
28
Section 10.8 Terrorism
Sanctions Regulations.......................................
28
SECTION 11.
EVENTS OF
DEFAULT..........................................................
28
SECTION 12.
REMEDIES ON DEFAULT,
ETC................................................... 31
Section 12.1
Acceleration..........................................................
31
Section 12.2 Other
Remedies........................................................
31
Section 12.3
Rescission............................................................
32
Section 12.4 No Waivers or
Election of Remedies, Expenses, Etc.....................
32
SECTION 13.
REGISTRATION; EXCHANGE; SUBSTITUTION OF
NOTES.............................. 32
Section 13.1 Registration of
Notes................................................. 32
Section 13.2 Transfer and
Exchange of Notes........................................
33
Section 13.3 Replacement of
Notes..................................................
33
SECTION 14.
PAYMENTS ON
NOTES..........................................................
34
Section 14.1 Place of
Payment......................................................
34
Section 14.2 Home Office
Payment...................................................
34
SECTION 15.
EXPENSES,
ETC..............................................................
34
Section 15.1 Transaction
Expenses..................................................
34
Section 15.2
Survival..............................................................
35
SECTION 16.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT............... 35
SECTION 17.
AMENDMENT AND
WAIVER.......................................................
35
Section 17.1
Requirements..........................................................
35
Section 17.2 Solicitation of
Holders of Notes...................................... 35
Section 17.3 Binding Effect,
Etc................................................... 36
Section 17.4 Notes Held by
the Company, Etc........................................
36
SECTION 18.
NOTICES....................................................................
36
</TABLE>
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<PAGE>
TABLE OF CONTENTS
(not part of the Agreement)
<TABLE>
<CAPTION>
SECTION
PAGE
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SECTION 19.
REPRODUCTION OF
DOCUMENTS..................................................
37
SECTION 20.
CONFIDENTIAL
INFORMATION...................................................
37
SECTION 21.
SUBSTITUTION OF
PURCHASER..................................................
38
SECTION 22.
MISCELLANEOUS..............................................................
38
Section 22.1 Successors and
Assigns................................................
38
Section 22.2 Payments Due on
Non-Business Days..................................... 39
Section 22.3 Accounting
Terms......................................................
39
Section 22.4
Severability..........................................................
39
Section 22.5
Construction..........................................................
39
Section 22.6
Counterparts..........................................................
39
Section 22.7 Governing
Law.........................................................
39
Section 22.8 Jurisdiction and
Process; Waiver of Jury Trial........................ 40
</TABLE>
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<PAGE>
ATTACHMENTS TO NOTE PURCHASE AGREEMENT:
SCHEDULE A --
Information Relating
to Purchasers
SCHEDULE B --
Defined Terms
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company,
Ownership of Subsidiary Stock
and Affiliates
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.15 -- Existing Debt
SCHEDULE 10.4 -- Existing Liens
EXHIBIT 1
-- Form of Floating
Rate Senior Note due June 30, 2015
EXHIBIT 2.2 --
Form of Subsidiary
Guaranty
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel
to the Company and the
Subsidiary Guarantors
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel
to the Purchasers
-v-
<PAGE>
G&K SERVICES, INC.
5995 OPUS PARKWAY, SUITE 500
MINNETONKA, MINNESOTA 55343
$75,000,000 Floating Rate Senior Note due June 30, 2015
Dated as of
June 15, 2005
TO THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
G&K
SERVICES, INC., a Minnesota corporation (the "Company"), agrees
with
the Purchasers listed in the attached
Schedule A (the "Purchasers") to this Note
Purchase Agreement (this "Agreement") as
follows:
SECTION 1. AUTHORIZATION OF NOTES.
Section
1.1 Description of Notes. The Company will authorize the issue
and
sale of $75,000,000 aggregate principal
amount of its Floating Rate Senior Notes
due June 30, 2015 (the "Notes," such term
shall also include any such notes
issued in substitution therefor pursuant to
Section 13 of this Agreement). The
Notes shall be substantially in the form
set out in Exhibit 1. 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.
Section
1.2 Interest Rate.
(a) The Notes shall bear interest (computed on the basis of a
360-day
year and actual days elapsed) on the unpaid principal thereof
from
the date
of issuance at a floating rate equal to the Adjusted LIBOR Rate
for the
Interest Period in effect from time to time, payable quarterly
in
arrears on
the 30th day of March, June, September and December and at
maturity,
commencing on September 30, 2005, until such principal sum
shall
have
become due and payable (whether at maturity, upon notice of
prepayment
or otherwise) (each such date being referred to herein as an
"Interest
Payment Date") and interest (so computed) on any overdue
principal,
any overdue Prepayment Premium, any overdue LIBOR Breakage
Amount
and, to the extent permitted by applicable law, overdue
interest
from the
due date thereof (whether by acceleration or otherwise) at the
Default
Rate until paid.
(b) The Adjusted LIBOR Rate shall be determined by the Company,
and
notice
thereof shall be given to the holders of the Notes, within
three
Business
Days after the beginning of each Interest Period, together with
a
copy of
the relevant screen used for
<PAGE>
the
determination of LIBOR, a calculation of Adjusted LIBOR Rate for
such
Interest
Period, the number of days in such Interest Period, the date on
which
interest for such Interest Period will be paid and the amount
of
interest
to be paid to each holder of Notes on such date. In the event
that the
Required Holders do not concur with such determination by 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 Required Holders shall provide notice to the Company,
together
with a copy of the relevant screen used for the determination
of
LIBOR, a
calculation of the Adjusted LIBOR Rate for such Interest
Period,
the number
of days in such Interest Period, the date on which interest for
such
Interest Period will be paid and the amount of interest to be paid
to
each
holder of Notes on such date, and any such determination made
in
accordance
with the provisions of this Agreement, shall be conclusive
absent
manifest error.
SECTION 2. SALE AND PURCHASE OF NOTES;
SUBSIDIARY GUARANTY.
Section
2.1 Sale and Purchase of Notes. Subject to the terms and
conditions of this Agreement, the Company
will issue and sell to each Purchaser
and each Purchaser will purchase from the
Company, at the closing provided for
in Section 3, the Notes in the principal
amount specified opposite such
Purchaser's name in Schedule A at the
purchase price of 100% of the principal
amount thereof. The obligations of each
Purchaser hereunder are several and not
joint obligations and no Purchaser shall
have any liability to any Person for
the performance or nonperformance of any
obligation by any other Purchaser
hereunder.
Section
2.2 Subsidiary Guaranty.
(a) The payment by the Company of all amounts due with respect
to
the Notes
and the performance by the Company of its obligations under
this
Agreement
will be absolutely and unconditionally guaranteed by the
Subsidiary
Guarantors pursuant to the Subsidiary Guaranty Agreement dated
as of even
date herewith, which shall be substantially in the form of
Exhibit
2.2 attached hereto, and otherwise in accordance with the
provisions
of Section 9.10 hereof (the "Subsidiary Guaranty").
(b) The holders of Notes agree to discharge and release any
Subsidiary
Guarantor from the Subsidiary Guaranty upon the written request
of the
Company, provided that (1) such Subsidiary Guarantor has been
released
and discharged (or will be released and discharged concurrently
with the
release of such Subsidiary Guarantor under the Subsidiary
Guaranty)
as an obligor and guarantor under and in respect of the Bank
Credit
Agreement and the Company so certifies to the holders of Notes in
a
certificate of a Responsible Officer, (2) at the time of such
release and
discharge,
the Company shall deliver a certificate of a Responsible
Officer to
the holders of Notes stating that no Default or Event of
Default
exists or will result from such release and discharge and (3)
if
any fee or
other form of consideration is given to any party to the Bank
Credit
Agreement expressly for the purpose of its release of such
Subsidiary
Guarantor, holders of the Notes shall receive equivalent
consideration.
-2-
<PAGE>
SECTION 3. CLOSING.
The sale
and purchase of the Notes to be purchased by each Purchaser
shall
occur at the offices of Schiff Hardin LLP,
623 Fifth Avenue, 28th Floor, New
York, New York 10022 at 11:00 a.m. New
York, New York time, at a closing on June
30, 2005 or on such other Business Day
thereafter on or prior to July 7, 2005 as
may be agreed upon by the Company and the
Purchasers (the "Closing Date"). On
the Closing Date, the Company will deliver
to each Purchaser the Notes to be
purchased by such Purchaser in the form of
a single Note (or such greater number
of Notes in denominations of at least
$100,000 as such Purchaser may request)
dated the Closing Date and registered in
such Purchaser's name (or in the name
of its nominee), against delivery by such
Purchaser to the Company or its order
of immediately available funds in the
amount of the purchase price therefor by
wire transfer of immediately available
funds for the account of the Company. If,
on the Closing Date, the Company shall fail
to tender such Notes to any
Purchaser as provided above in this Section
3, or any of the conditions
specified in Section 4 shall not have been
fulfilled to any Purchaser's
satisfaction, such Purchaser shall, at its
election, be relieved of all further
obligations under this Agreement, without
thereby waiving any rights such
Purchaser may have by reason of such
failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Each
Purchaser's obligation to purchase and pay for the Notes to be
sold
to such Purchaser on the Closing Date is
subject to the fulfillment to such
Purchaser's satisfaction, prior to or on
the Closing Date of the following
conditions:
Section
4.1 Representations and Warranties.
(a) Representations and Warranties of the Company. The
representations and warranties of the Company in this Agreement
shall be
correct
when made and on the Closing Date.
(b) Representations and Warranties of the Subsidiary Guarantors.
The
representations and warranties of the Subsidiary Guarantors in
the
Subsidiary
Guaranty shall be correct when made and on the Closing Date.
Section
4.2 Performance; No Default. The Company and each Subsidiary
Guarantor shall have performed and complied
with all agreements and conditions
contained in this Agreement and the
Subsidiary Guaranty required to be performed
or complied with by it prior to or on the
Closing Date, and after giving effect
to the issue and sale of the Notes (and the
application of the proceeds thereof
as contemplated by Section 5.14), no
Default or Event of Default shall have
occurred and be continuing. Neither the
Company nor any Subsidiary shall have
entered into any transaction since the date
of the Memorandum that would have
been prohibited by Section 10 hereof had
such Section applied since such date.
-3-
<PAGE>
Section
4.3 Compliance Certificates.
(a) Officer's Certificate of the Company. The Company shall
have
delivered
to such Purchaser an Officer's Certificate, dated the Closing
Date,
certifying that the conditions specified in Sections 4.1, 4.2
and
4.9 have
been fulfilled.
(b) Secretary's Certificate of the Company. The Company shall
have
delivered
to such Purchaser a certificate of its Secretary or an
Assistant
Secretary,
dated the Closing Date, certifying as to the resolutions
attached
thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes and this
Agreement.
(c) Officer's Certificate of the Subsidiary Guarantors. Each
Subsidiary
Guarantor shall have delivered to such Purchaser an Officer's
Certificate, dated the Closing Date, certifying that the
conditions
specified
in Sections 4.1(b), 4.2 and 4.9 have been fulfilled.
(d) Secretary's Certificate of the Subsidiary Guarantors. Each
Subsidiary
Guarantor shall have delivered to such Purchaser a certificate
of its
Secretary or an Assistant Secretary, dated the Closing Date,
certifying as to the
resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and delivery
of the
Subsidiary
Guaranty.
Section
4.4 Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance satisfactory
to such Purchaser, dated the Closing
Date (a) from Maslon Edelman Borman &
Brand, LLP, special counsel to 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 such Purchaser or special counsel to the
Purchasers may reasonably request
(and the Company hereby instructs its
special counsel to deliver such opinion to
the Purchasers) and (b) from Schiff Hardin
LLP, special counsel to the
Purchasers 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 such Purchaser may
reasonably request.
Section
4.5 Purchase Permitted By Applicable Law, Etc. On the Closing
Date, such Purchaser's purchase of Notes
shall (a) be permitted by the laws and
regulations of each jurisdiction to which
such Purchaser is subject, without
recourse to provisions (such as Section
1405(a)(8) of the New York Insurance
Law) permitting limited investments by
insurance companies without restriction
as to the character of the particular
investment, (b) not violate any applicable
law or regulation (including, without
limitation, Regulation T, U or X of the
Board of Governors of the Federal Reserve
System) and (c) not subject such
Purchaser to any tax, penalty or liability
under or pursuant to any applicable
law or regulation. If requested by such
Purchaser, such Purchaser shall have
received from the Company an Officer's
Certificate certifying as to such matters
of fact as such Purchaser may reasonably
specify to enable such Purchaser to
determine whether such purchase is so
permitted.
-4-
<PAGE>
Section
4.6 Sale of Other Notes. On the Closing Date, the Company shall
sell to each other Purchaser and each other
Purchaser shall purchase the Notes
to be purchased by it on the Closing Date
as specified in Schedule A.
Section
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
Date, the reasonable fees, reasonable
charges and reasonable disbursements of
special counsel to the Purchasers referred
to in Section 4.4(b) to the extent
reflected in a statement of such counsel
rendered to the Company at least one
Business Day prior to the Closing Date.
Section
4.8 Private Placement Number. A Private Placement Number issued
by
Standard & Poor's CUSIP Service Bureau
(in cooperation with the SVO of the NAIC)
shall have been obtained for the Notes.
Section
4.9 Changes in Corporate Structure. Neither the Company nor any
Subsidiary Guarantor shall have changed its
jurisdiction of organization or been
a party to any merger or consolidation, or
shall have succeeded to all or any
substantial part of the liabilities of any
other entity, at any time following
the date of the most recent financial
statements referred to in Schedule 5.5.
Section
4.10 Subsidiary Guaranty. The Subsidiary Guaranty shall have
been
duly authorized, executed and delivered by
each Subsidiary Guarantor and shall
constitute the legal, valid and binding
contract and agreement of each
Subsidiary Guarantor and such Purchaser
shall have received a duly executed copy
thereof.
Section
4.11 Funding Instructions. At least three Business Days prior
to
the Closing Date, each Purchaser shall have
received written instructions signed
by a Responsible Officer on letterhead of
the Company directing the manner of
the payment of funds and setting forth (a)
the name and address of the
transferee bank, (b) such transferee bank's
ABA number, (c) the account name and
number into which the purchase price for
the Notes is to be deposited and (d)
the name and telephone number of the
account representative responsible for
verifying receipt of such funds.
Section
4.12 Proceedings and Documents. All corporate and other
organizational proceedings in connection
with the transactions contemplated by
this Agreement and the Subsidiary Guaranty
and all documents and instruments
incident to such transactions shall be
satisfactory to such Purchaser and
special counsel to the Purchasers, and such
Purchaser and special counsel to the
Purchasers shall have received all such
counterpart originals or certified or
other copies of such documents as such
Purchaser or such special counsel may
reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES
OF THE COMPANY.
The
Company represents and warrants to each Purchaser that:
Section
5.1 Organization; Power and Authority. The Company is a
corporation duly organized, validly
existing and in good standing under the laws
of its jurisdiction of
-5-
<PAGE>
incorporation, and is duly qualified as a
foreign corporation and is in good
standing in each jurisdiction in which such
qualification is required by law,
other than those jurisdictions as to which
the failure to be so qualified or in
good standing would not, individually or in
the aggregate, reasonably be
expected to have a Material Adverse Effect.
The Company has the corporate power
and authority to own or hold under lease
the properties it purports to own or
hold under lease, to transact the business
it transacts and proposes to
transact, to execute and deliver this
Agreement and the Notes and to perform the
provisions hereof and thereof.
Section
5.2 Authorization, Etc.
(a) This Agreement and the Notes have been duly authorized by
all
necessary
corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note
will
constitute, a legal, valid and binding obligation of the
Company
enforceable against the Company in accordance with its terms,
except as
such
enforceability may be limited by (1) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the
enforcement of creditors' rights generally and (2) general
principles of
equity
(regardless of whether such enforceability is considered in a
proceeding
in equity or at law).
(b) The Subsidiary Guaranty has been duly authorized by all
necessary
corporate or other action on the part of each Subsidiary
Guarantor
and the Subsidiary Guaranty constitutes a legal, valid and
binding
obligation of each Subsidiary Guarantor enforceable against
each
Subsidiary
Guarantor in accordance with its terms, except as such
enforceability may be limited by (1) applicable bankruptcy,
insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement
of
creditors' rights generally and (2) general principles of
equity
(regardless of whether such enforceability is considered in a
proceeding
in equity
or at law).
Section
5.3 Disclosure. The Company, through its agent, Banc of America
Securities LLC, has delivered to each
Purchaser a copy of a Private Placement
Memorandum, dated April 2005 (the
"Memorandum"), relating to the transactions
contemplated hereby. The Memorandum fairly
describes, in all material respects,
the general nature of the business and
principal properties of the Company and
its Subsidiaries. This Agreement, the
Memorandum, the documents, certificates or
other writings identified in Schedule 5.3
and the financial statements listed in
Schedule 5.5, in each case, delivered to
the Purchasers prior to May 9, 2005
(this Agreement, the Memorandum and such
documents, certificates or other
writings and such financial statements
being referred to, collectively, as the
"Disclosure Documents"), taken as a whole,
do not contain any untrue statement
of a material fact or omit to state any
material fact necessary to make the
statements therein not misleading in light
of the circumstances under which they
were made. Except as disclosed in the
Disclosure Documents, since July 3, 2004,
there has been no change in the financial
condition, operations, business or
properties of the Company or any Restricted
Subsidiary except changes that
individually or in the aggregate would not
reasonably be expected to have a
Material Adverse Effect. There is no fact
known to the Company that would
reasonably be expected to have a Material
Adverse Effect that has not been set
forth herein or in the Disclosure
Documents.
-6-
<PAGE>
Section
5.4 Organization and Ownership of Shares of Subsidiaries;
Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete
and
correct
lists (1) of the Company's Restricted and Unrestricted
Subsidiaries, showing, as to each Subsidiary, the correct name
thereof,
the
jurisdiction of its organization, and the percentage of shares of
each
class of
its capital stock or similar equity interests outstanding owned
by the
Company and each other Subsidiary, and all other Investments of
the
Company
and its Restricted Subsidiaries existing on the Closing Date,
(2)
of the
Company's Affiliates, other than Subsidiaries and (3) of the
Company's
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar
equity
interests
of each Subsidiary shown in Schedule 5.4 as being owned by the
Company
and its Subsidiaries have been validly issued, are fully paid
and
nonassessable and are owned by the Company or another Subsidiary
free and
clear of
any Lien (except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation
or
other
legal entity duly organized, validly existing and in good
standing
under the
laws of its jurisdiction of organization, and is duly qualified
as a
foreign corporation or other legal entity and is in good standing
in
each
jurisdiction in which such qualification is required by law,
other
than those
jurisdictions as to which the failure to be so qualified or in
good
standing would 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 and, in the case of each
such
Subsidiary that is a Subsidiary Guarantor, to execute and deliver
the
Subsidiary
Guaranty and to perform the provisions thereof.
(d) No Subsidiary is a party to, or otherwise subject to, any
legal,
regulatory, contractual or other restriction (other than this
Agreement,
the
agreements listed on Schedule 5.4 and customary limitations imposed
by
corporate
or similar law statutes) restricting the ability of such
Subsidiary
to pay dividends out of profits or make any other similar
distributions of profits to the Company or any of its Subsidiaries
that
owns
outstanding shares of capital stock or similar equity interests
of
such
Subsidiary.
Section
5.5 Financial Statements; Material Liabilities. The Company has
delivered to each Purchaser copies of the
financial statements of the Company
and its Subsidiaries listed on Schedule
5.5. All of said financial statements
(including in each case the related
schedules and notes) fairly present in all
material respects the consolidated
financial position of the Company and its
Subsidiaries as of the respective dates
specified in such 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). The Company and its
Subsidiaries do not have any Material
liabilities
-7-
<PAGE>
that are not disclosed on such financial
statements or otherwise disclosed in
the Disclosure Documents.
Section
5.6 Compliance with Laws, Other Instruments, Etc. The
execution,
delivery and performance by the Company of
this Agreement and the Notes and the
execution, delivery and performance by each
Subsidiary Guarantor of the
Subsidiary Guaranty will not (a)
contravene, result in any breach of, or
constitute a default under, or result in
the creation of any Lien in respect of
any property of the Company or any
Subsidiary under, any indenture, mortgage,
deed of trust, loan, purchase or credit
agreement, lease, corporate charter or
by-laws, or any other agreement or
instrument to which the Company or any
Subsidiary is bound or by which the Company
or any Subsidiary or any of their
respective properties may be bound or
affected, (b) conflict with or result in a
breach of any of the terms, conditions or
provisions of any order, judgment,
decree, or ruling of any court, arbitrator
or Governmental Authority applicable
to the Company or any Subsidiary or (c)
violate any provision of any statute or
other rule or regulation of any
Governmental Authority applicable to the Company
or any Subsidiary.
Section
5.7 Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing
or declaration with, any Governmental
Authority is required in connection with
the execution, delivery or performance
by (a) the Company of this Agreement or the
Notes or (b) any Subsidiary
Guarantor of the Subsidiary Guaranty.
Section
5.8 Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits, investigations or proceedings
pending
or, to the knowledge of the Company, threatened against or
affecting
the Company or any Restricted Subsidiary or any property of the
Company or any Restricted
Subsidiary in any court or before any arbitrator
of any
kind or before or by any Governmental Authority that,
individually
or in the
aggregate, would reasonably be expected to have a Material
Adverse
Effect.
(b) Neither the Company nor any Restricted Subsidiary is in
default
under any
term of any agreement or instrument to which it is a party or
by
which it
is bound, or any order, judgment, decree or ruling of any
court,
arbitrator
or Governmental Authority or is in violation of any applicable
law,
ordinance, rule or regulation (including, without limitation,
Environmental Laws or the USA Patriot Act) of any Governmental
Authority,
which
default or violation, individually or in the aggregate, would
reasonably
be expected to have a Material Adverse Effect.
Section
5.9 Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been
filed in any jurisdiction, and have paid
all taxes shown to be due and payable on
such returns and all other taxes and
assessments levied upon them or their
properties, assets, income or franchises,
to the extent such taxes and assessments
have become due and payable and before
they have become delinquent, except for any
taxes and assessments (a) the amount
of which is not, individually or in the
aggregate, Material or (b) the amount,
applicability or validity of which is
currently being contested in good faith by
appropriate proceedings and with respect to
which the Company or a Subsidiary,
as the case may be, has established
adequate
-8-
<PAGE>
reserves in accordance with GAAP. The
Company knows of no basis for any other
tax or assessment that would reasonably be
expected to have a Material Adverse
Effect. The charges, accruals and reserves
on the books of the Company and its
Subsidiaries in respect of federal, state
or other taxes for all fiscal periods
are adequate. The federal income tax
liabilities of the Company and its
Subsidiaries have been finally determined
(whether by reason of completed audits
or the statute of limitations having run)
for all fiscal years up to and
including the fiscal year ended June 29,
1999.
Section
5.10 Title to Property; Leases. The Company and its Restricted
Subsidiaries have good and sufficient title
to their respective properties which
the Company and its Restricted Subsidiaries
own or purport to own that,
individually or in the aggregate, are
Material, including all such properties
reflected in the most recent audited
balance sheet referred to in Section 5.5 or
purported to have been acquired by the
Company or any Restricted 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.
Section
5.11 Licenses, Permits, Etc.
(a) The Company and its Restricted Subsidiaries own or possess
all
licenses,
permits, franchises, authorizations, patents, copyrights,
proprietary software, service marks, trademarks, trade names and
domain
names, or
rights thereto, that, individually or in the aggregate, are
Material,
without known conflict with the rights of others.
(b) To the best knowledge of the Company, no product of the
Company
or any of
its Restricted Subsidiaries infringes in any material respect
any
license, permit, franchise, authorization, patent, copyright,
proprietary software, service mark, trademark, trade name, domain
name or
other
right owned by any other Person.
(c) To the best knowledge of the Company, there is no Material
violation
by any Person of any right of the Company or any of its
Restricted
Subsidiaries with respect to any patent, copyright, proprietary
software,
service mark, trademark, trade name, domain name or other right
owned or
used by the Company or any of its Restricted Subsidiaries.
Section
5.12 Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws
except for
such
instances of noncompliance as have not resulted in and would
not
reasonably
be expected to result in a Material Adverse Effect. Neither the
Company
nor any ERISA Affiliate has incurred any liability pursuant to
Title I or
IV of ERISA or the penalty or excise tax provisions of the Code
relating
to employee benefit plans (as defined in Section 3 of ERISA),
and
no event,
transaction or condition has occurred or exists that could
reasonably
be expected to result in the incurrence of any such liability
by the
Company or any ERISA Affiliate, or in the imposition of any Lien
on
any of the
rights, properties or assets of the Company or any
-9-
<PAGE>
ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or
to
such
penalty or excise tax provisions or to Section 401(a)(29) or 412
of
the Code
or Section 4068 of ERISA, other than such liabilities or Liens
as
would not
be, individually or in the aggregate, Material.
(b) The present value of the aggregate benefit liabilities
under
each of
the Plans (other than Multiemployer Plans), determined as of
the
end of
such Plan's most recently ended plan year on the basis of the
actuarial
assumptions specified for funding purposes in such Plan's most
recent
actuarial valuation report, did not exceed the aggregate
current
value of
the assets of such Plan allocable to such benefit liabilities.
The term
"benefit liabilities" has the meaning specified in Section 4001
of ERISA
and the terms "current value" and "present value" have the
meanings
specified in Section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred any
withdrawal
liabilities (and are not subject to contingent withdrawal
liabilities) under Section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that, individually or in the aggregate, are
Material.
(d) The expected post-retirement benefit obligation (determined
as
of the
last day of the Company's most recently ended fiscal year in
accordance
with Financial Accounting Standards Board Statement No. 106,
without
regard to liabilities attributable to continuation coverage
mandated
by Section 4980B of the Code) of the Company and its
Subsidiaries
is not
Material.
(e) The execution and delivery of this Agreement and the
issuance
and sale
of the Notes hereunder will not involve any transaction that is
subject to
the prohibitions of Section 406 of ERISA or in connection with
which a
tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of
the
Code. The
representation by the Company to each Purchaser in the first
sentence
of this Section 5.12(e) is made in reliance upon and subject to
the
accuracy of such Purchaser's representation in Section 6.2 as to
the
sources of
the funds to be used to pay the purchase price of the Notes to
be
purchased by such Purchaser.
Section
5.13 Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the
Notes, the Subsidiary Guaranty, or
any similar securities for sale to, or
solicited any offer to buy any of the
same from, or otherwise approached or
negotiated in respect thereof with, any
Person other than the Purchasers and not
more than 25 other Institutional
Investors of the type described in clause
(c) of the definition thereof, each of
which has been offered the Notes and the
Subsidiary Guaranty in connection with
a private sale for investment. Neither the
Company nor anyone acting on its
behalf has taken, or will take, any action
that would subject the issuance or
sale of the Notes or the Subsidiary
Guaranty to the registration requirements of
Section 5 of the Securities Act or to the
registration requirements of any
securities or blue sky laws of any
applicable jurisdiction.
-10-
<PAGE>
Section
5.14 Use of Proceeds; Margin Regulations. The Company will
apply
the proceeds of the sale of the Notes as
set forth in the "Summary of Proposed
Terms" of the Memorandum and for other
general corporate purposes of the
Company. No part of the proceeds from the
sale of the Notes hereunder will be
used, directly or indirectly, for the
purpose of buying or carrying any margin
stock within the meaning of Regulation 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 total
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.
Section
5.15 Existing Debt; Future Liens.
(a) Except as described therein, Schedule 5.15 sets forth a
complete
and
correct list of all outstanding Debt of the Company and its
Restricted
Subsidiaries as of April 2, 2005 (including a description of the
obligors
and
obligees, principal amount outstanding and collateral therefor,
if
any, and
Guaranty thereof, if any), 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 Restricted
Subsidiaries. Neither the Company nor any Restricted Subsidiary is
in
default
and no waiver of default is currently in effect, in the payment
of
any
principal or interest on any Debt of the Company or such
Restricted
Subsidiary
and no event or condition exists with respect to any Debt of
the
Company or any Restricted Subsidiary that would permit (or that
with
notice or
the lapse of time, or both, would permit) one or more Persons
to
cause such
Debt to become due and payable before its stated maturity or
before its
regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company
nor
any
Restricted Subsidiary has agreed or consented to cause or permit
in
the future (upon the
happening of a contingency or otherwise) any of its
property,
whether now owned or hereafter acquired, to be subject to a
Lien
not
permitted by Section 10.4.
(c) Neither the Company nor any Subsidiary is a party to, or
otherwise
subject to any provision contained in, any instrument
evidencing
Debt of
the Company or such Subsidiary, any agreement relating thereto
or
any other
agreement (including, but not limited to, its charter or other
organizational document) which
limits the amount of, or otherwise imposes
restrictions on the incurring of, Debt of the Company or any
Subsidiary
Guarantor,
except as specifically indicated in Schedule 5.15.
Section
5.16 Foreign Assets Control Regulations, Etc.
(a) Neither the sale of the Notes by the Company hereunder nor
its
use of the
proceeds thereof will violate the Trading with the Enemy Act,
as
amended, or any of the
-11-
<PAGE>
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 Company nor any Subsidiary (1) 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, (2) to the knowledge of the Company, after
due
inquiry,
engages in any dealings or transactions with any such Person.
The
Company
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 Notes
hereunder
will be
used, directly or indirectly, for any payments to any
government
official
or employee, political party, official of a political party,
candidate
for political office, or anyone else acting in an official
capacity,
in order to obtain, retain or direct business or obtain any
improper
advantage, in violation of the United States Foreign Corrupt
Practices
Act of 1977, as amended, assuming in all cases that such Act
applies to
the Company.
Section
5.17 Status under Certain Statutes. Neither the Company nor any
Restricted Subsidiary is an "investment
company" registered or required to be
registered under the Investment Company Act
of 1940, as amended, or is subject
to regulation under the Public Utility
Holding Company Act of 1935, as amended,
the ICC Termination Act of 1995, as
amended, or the Federal Power Act, as
amended.
Section
5.18 Environmental Matters.
(a) Neither the Company nor any Restricted Subsidiary has
knowledge
of any
liability or has received any notice of any liability, and no
proceeding
has been instituted raising any liability against the Company
or any of
its Restricted Subsidiaries or any of their respective real
properties
now or formerly owned, leased or operated by any of them, or
other
assets, alleging any damage to the environment or violation of
any
Environmental Laws, except, in each case, such as would not
reasonably be
expected
to result in a Material Adverse Effect.
(b) Neither the Company nor any Restricted Subsidiary has
knowledge
of any
facts which would give rise to any liability, public or
private,
violation
of Environmental Laws or damage to the environment emanating
from,
occurring on or in any way related to real properties now or
formerly
owned, leased or operated by any of them or to other assets or
their use,
except, in each case, such as would not reasonably be expected
to result
in a Material Adverse Effect.
(c) Neither the Company nor any Restricted Subsidiary has stored
any
Hazardous
Materials on real properties now or formerly owned, leased or
operated
by any of them or has disposed of any Hazardous Materials in
each
case in a
manner contrary to any Environmental Laws in each case in any
manner
that would reasonably be expected to result in a Material
Adverse
Effect.
-12-
<PAGE>
(d) All buildings on all real properties now owned, leased or
operated
by the Company or any Restricted Subsidiary are in compliance
with
applicable Environmental Laws, except where failure to comply
would
not
reasonably be expected to result in a Material Adverse Effect.
Section
5.19 Notes Rank Pari Passu.
(a) The obligations of the Company under this Agreement and the
Notes rank
pari passu in right of payment with all other senior unsecured
Debt
(actual or contingent) of the Company, including, without
limitation,
all senior
unsecured Debt of the Company described in Schedule 5.15.
(b) The obligations of each Subsidiary Guarantor under the
Subsidiary
Guaranty rank pari passu in right of payment with all other
senior
unsecured Debt (actual or contingent) of such Subsidiary
Guarantor,
including,
without limitation, all senior unsecured Debt of such
Subsidiary
Guarantor described in Schedule 5.15.
SECTION 6. REPRESENTATIONS OF THE
PURCHASERS.
Section
6.1 Purchase for Investment. Each Purchaser severally
represents
that it is purchasing the Notes for its own
account or for one or more separate
accounts maintained by it or for the
account of one or more pension or trust
funds and not with a view to the
distribution thereof (other than any Notes
purchased by Banc of America Securities LLC
on the Closing Date which are
intended to be resold to a "qualified
institutional buyer" pursuant to Rule 144A
of the Securities Act), provided that the
disposition of such Purchaser's or
such pension or trust fund's property shall
at all times be within such
Purchaser's or such pension or trust fund's
control. Each Purchaser understands
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.
Section
6.2 Accredited Investor. Each Purchaser severally represents
that
it is an "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act
acting for its own account (and not for
the account of others) or as a fiduciary or
agent for others (which others are
also "accredited investors"). Each
Purchaser further severally represents that
such Purchaser has had the opportunity to
ask questions of the Company and has
received answers concerning the terms and
conditions of the sale of the Notes.
Section
6.3 Source of Funds. Each Purchaser severally represents that
at
least one of the following statements is an
accurate representation as to each
source of funds (a "Source") to be used by
such Purchaser to pay the purchase
price of the Notes to be purchased by such
Purchaser hereunder:
(a) the Source is an "insurance company general account" (as
the
term is
defined in the United States Department of Labor's Prohibited
Transaction Exemption
-13-
<PAGE>
("PTE")
95-60) in respect of which the reserves and liabilities (as
defined by
the annual statement for life insurance companies approved by
the NAIC
(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 (1) an insurance company pooled
separate
account,
within the meaning of PTE 90-1 or (2) a bank collective
investment
fund, within the meaning of PTE 91-38 and, except as disclosed
by such
Purchaser to the Company in writing pursuant to this clause
(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 and (1) the identity
of such
QPAM and (2) the names of all employee benefit plans whose
assets
are
included in such investment fund have been disclosed to the Company
in
writing
pursuant to this clause (d); or
(e) the Source constitutes assets of a "plan(s)" (within the
meaning
of Section
IV of PTE 96-23 (the "INHAM Exemption")) managed by an
"in-house
asset manager" or "INHAM" (within the meaning of Part IV of the
INHAM
Exemption), the conditions of Part I(a), (g) and (h) of the
INHAM
Exemption
are satisfied, neither the INHAM nor a Person controlling or
controlled
by the INHAM (applying the definition of "control" in Section
IV(d) of
the INHAM Exemption) owns a 5% or more interest in the Company
and (1)
the identity of such INHAM and (2) the name(s) of the employee
benefit
plan(s)
-14-
<PAGE>
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
clause (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 6.3, the terms
"employee benefit plan," "governmental
plan," and "separate account" shall have
the respective meanings assigned to
such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO THE
COMPANY.
Section
7.1 Financial and Business Information. The Company shall
deliver
to each holder of Notes that is an
Institutional Investor:
(a) Quarterly
Statements -- within 60 days after the end of each
quarterly
fiscal period in each fiscal year of the Company (other than
the
last
quarterly fiscal period of each such fiscal year), copies of:
(1) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(2) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second
and
third quarters) for the portion of the fiscal year ending with
such
quarter,
setting
forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in
reasonable
detail,
prepared in accordance with GAAP applicable to quarterly
financial
statements
generally, and certified by a Senior Financial Officer as
fairly
presenting, in all material respects, the financial position of
the
companies
being reported on and their results of operations and cash
flows,
subject to changes resulting from year-end adjustments,
provided
that
delivery within the time period specified above of copies of
the
Company's
Quarterly Report on Form 10-Q prepared in compliance with the
requirements therefor and filed with the SEC shall be deemed to
satisfy
the
requirements of this Section 7.1(a);
(b) Annual
Statements -- within 105 days after the end of each
fiscal
year of the Company, copies of:
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<PAGE>
(1) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(2) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting
forth in each case in comparative form the figures for the
previous
fiscal year, all in reasonable detail, prepared in accordance
with GAAP,
and accompanied by an opinion thereon of independent certified
public
accountants of recognized national standing, which opinion
shall
state that
such financial statements present fairly, in all material
respects,
the financial position of the companies being reported upon and
their
results of operations and cash flows and have been prepared in
conformity
with GAAP, and that the examination of such accountants in
connection
with such financial statements has been made in accordance with
generally
accepted auditing standards, and that such audit provides a
reasonable
basis for such opinion in the circumstances, provided that
delivery
within the time period specified above of copies of the
Company's
Annual
Report on Form 10-K for such fiscal year (together with the
Company's
annual report to shareholders, if any, prepared pursuant to
Rule
14a-3
under the Exchange Act) prepared in accordance with the
requirements
therefor
and filed with the SEC shall be deemed to satisfy the
requirements of this Section 7.1(b);
(c) SEC and
Other Reports -- except for filings referred to in
Sections
7.1(a) and (b) above, promptly upon their becoming available
one
copy of
(1) each financial statement, report, notice or proxy statement
sent by
the Company or any Subsidiary to its public securities holders
generally
and (2) each regular or periodic report, each registration
statement
(without exhibits except as expressly requested by such
holder),
and each
prospectus and all amendments thereto filed by the Company or
any
Subsidiary
with the SEC and of all press releases and other statements
made
available generally by the Company or any Subsidiary to the
public
concerning
developments that are Material;
(d) Notice of
Default or Event of Default -- promptly, and in any
event
within five Business Days after a Responsible Officer becomes
aware
of the
existence of any Default or Event of Default or that any Person
has
given any
notice or taken any action with respect to a claimed default
hereunder
or that any Person has given any notice or taken any action
with
respect to
a claimed default of the type referred to in paragraph (g) of
Section
11, a written notice specifying the nature and period of
existence
thereof
and what action the Company is taking or proposes to take with
respect
thereto;
(e) ERISA
Matters -- promptly, and in any event within five
Business
Days after a Responsible Officer becomes aware of any of the
following,
a written notice setting forth the nature thereof and the
action, if
any, that the Company or an ERISA Affiliate proposes to take
with
respect thereto:
(1) with respect to any Plan, any reportable event, as defined
in Section 4043(c) of ERISA and the regulations thereunder, for
which notice
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thereof has not been waived pursuant to such regulations as in
effect on the date thereof; or
(2) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings
under
Section 4042 of ERISA for the termination of, or the appointment
of
a trustee to administer, any Plan, or the receipt by the Company
or
any ERISA Affiliate of a notice from a Multiemployer Plan that
such
action has been taken by the PBGC with respect to such
Multiemployer
Plan;
or
(3) any event, transaction or condition that could result in
the incurrence of any liability by the Company or any ERISA
Affiliate pursuant to Title I or IV of ERISA or the imposition of
a
penalty or
excise tax under the provisions of the Code relating to
employee benefit plans, or the imposition of any Lien on any of
the
rights, properties or assets of the Company or any ERISA
Affiliate
pursuant to Title I or IV of ERISA or such penalty or excise
tax
provisions, if such liability or Lien, taken together with any
other
such liabilities or Liens then existing, would reasonably be
expected to have a Material Adverse Effect;
(f) Notices from
Governmental Authority -- promptly, and in any
event
within 30 days of receipt thereof, copies of any notice to the
Company or
any Subsidiary from any federal or state Governmental Authority
relating
to any order, ruling, statute or other law or regulation that
would
reasonably be expected to have a Material Adverse Effect; and
(g) Requested
Information -- with reasonable promptness, such
other data
and information relating to the business, operations, affairs,
financial
condition, assets or properties of the Company or any of its
Subsidiaries or relating to the ability of the Company or any
Subsidiary
Guarantor
to perform its obligations hereunder, under the Subsidiary
Guaranty
or under the Notes as from time to time may be reasonably
requested
by any such holder of Notes or such information regarding the
Company
required to satisfy the requirements of 17 C.F.R. Section
230.144A,
as amended from time to time, in connection with any
contemplated transfer of the Notes.
Notwithstanding the foregoing, in the event that one or more
Unrestricted
Subsidiaries shall either (i) own more than
10% of the consolidated total assets
of the Company and its Subsidiaries or (ii)
account for more than 10% of the
consolidated gross revenues of the Company
and its Subsidiaries, in each case
determined in accordance with GAAP, then,
within the respective periods provided
in Sections 7.1(a) and (b) above, the
Company shall deliver to each holder of
Notes that is an Institutional Investor,
unaudited financial statements of the
character and for the dates and periods as
in said Sections 7.1(a) and (b)
covering such group of Unrestricted
Subsidiaries (on a consolidated basis),
together with a consolidating statement
reflecting eliminations or adjustments
required in order to reconcile the
financial statements of such group of
Unrestricted Subsidiaries to the
consolidated financial statements delivered
pursuant to Sections 7.1(a) and (b);
provided that for purposes of making the
calculations set
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forth in clauses (i) and (ii) of this
paragraph, there shall be excluded from
such calculation the total assets and gross
revenues of one or more
Securitization Subsidiaries to the extent
that the aggregate amount of Debt of
such Securitization Subsidiaries does not
exceed $75,000,000.
Section
7.2 Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to
Section 7.1(a) or Section 7.1(b)
shall be accompanied by a certificate of a
Senior Financial Officer setting
forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company
was in
compliance
with the requirements of Section 10.1 through Section 10.4,
inclusive,
and Section 10.6 during the quarterly or annual period covered
by the
statements then being furnished (including with respect to each
such
Section, where applicable, the calculations of the maximum or
minimum
amount,
ratio or percentage, as the case may be, permissible under the
terms of
such Sections, and the calculation of the amount, ratio or
percentage
then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed
the
relevant terms hereof and has made, or caused to be made, under his
or
her
supervision, a review of the transactions and conditions of the
Company
and its Subsidiaries from the beginning of the quarterly or
annual
period
covered by the statements then being furnished to the date of
the
certificate and that such review shall not have disclosed the
existence
during
such period of any condition or event that constitutes a Default
or
an Event
of Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition
resulting,
from the
failure of the Company or any Subsidiary to comply with any
Environmental Law) specifying the nature and period of existence
thereof
and what
action the Company shall have taken or proposes to take with
respect
thereto.
Section
7.3 Visitation. The Company shall permit the representatives of
each holder of Notes that is an
Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists,
at
the
expense of such holder and upon reasonable prior notice to the
Company,
to visit the principal executive office of the Company, to
discuss
the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of
the
Company,
which consent will not be unreasonably withheld) its
independent
public
accountants, and (with the consent of the Company, which
consent
will not
be unreasonably withheld) to visit the other offices and
properties
of the Company and each Restricted Subsidiary, all at such
reasonable
times and as often as may be reasonably requested in writing;
and
(b) Default -- if a Default or Event of Default then exists, at
the
expense of
the Company, to visit and inspect any of the offices or
properties
of the Company or any Restricted Subsidiary, to examine all
their
respective books of account, records, reports and other papers,
to
make
copies and extracts therefrom, and to discuss their respective
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<PAGE>
affairs,
finances and accounts with their respective officers and
independent public accountants (and by this provision the
Company
authorizes
said accountants to discuss the affairs, finances and accounts
of the
Company and its Restricted Subsidiaries), all at such times and
as
often as
may be requested.
SECTION 8. PAYMENT OF THE NOTES.
Section
8.1 Required Prepayments. The Notes shall not be subject to any
required prepayment and the entire unpaid
principal amount of the Notes shall
become due and payable on the stated
maturity thereof.
Section
8.2 Optional Prepayments.
(a) The Company may, at its option, upon notice as provided
below,
prepay at
any time all, or from time to time any part of, the Notes, in
an
amount not
less than 10% of the original aggregate principal amount of the
Notes to
be prepaid in the case of a partial prepayment (or such lesser
amount as
shall be required to effect a partial prepayment resulting from
an
optional prepayment pursuant to Section 10.6), at 100% of the
principal
amount so
prepaid, together with interest accrued thereon to the date of
such
prepayment, plus the LIBOR Breakage Amount (unless the date
specified
for
prepayment is an Interest Payment Date) and Prepayment Premium,
if
any,
determined for the prepayment date with respect to such
principal
amount of
each Note then outstanding. The Company will give each holder
of
Notes
written notice of each optional prepayment under this Section
8.2
not less
than 30 days and not more than 60 days prior to the date fixed
for such
prepayment. Each such notice shall specify such date (which
shall
be a
Business Day), the aggregate principal amount of the Notes to
be
prepaid on
such date, the principal amount of each Note held by such
holder to
be prepaid (determined in accordance with Section 8.3), and the
interest
to be paid on the prepayment date with respect to such
principal
amount
being prepaid, and shall be accompanied by a certificate of a
Senior
Financial Officer as to the Prepayment Premium, if any, due in
connection
with such prepayment, setting forth the details of such
computation.
(b) The term "LIBOR Breakage Amount" shall mean any loss, cost
or
expense
(other than lost profits) actually incurred by any holder of a
Note as a
result of any payment or prepayment of any Note on a day other
than a
regularly scheduled Interest Payment Date or at the scheduled
maturity
(whether voluntary, mandatory, automatic, by reason of
acceleration or otherwise), and any loss or expense arising from
the
liquidation or reemployment of funds obtained by such holder or
from fees
payable to
terminate the deposits from which such funds were obtained;
provided
that any such loss, cost or expense shall be limited to the
time
period
from the date of such prepayment through the earlier of (1) the
next
Interest Payment Date or (2) the maturity date of the Notes.
Each
holder
shall determine the LIBOR Breakage Amount with respect to the
principal
amount of its Notes then being paid or prepaid (or required to
be paid or
prepaid) by written notice to the Company setting forth such
determination in reasonable detail not less than two Business Days
prior
to the
date of prepayment in the case of any prepayment pursuant
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to Section
8.2(a) or Section 8.6 and within five Business Days after any
payment
required by Section 12.1. Each such determination shall be
conclusive
absent manifest error.
Section
8.3 Allocation of Partial Prepayments. In the case of each
partial
prepayment of the Notes pursuant to the
provisions of Section 8.2(a), the
principal amount of the Notes 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. Each
purchase made pursuant to Section 8.5 or
prepayment made pursuant to Section 8.6
shall be applied only to the Notes of the
holders who are participating in such
purchase or prepayment.
Section
8.4 Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this Section 8, the
principal amount of each Note to be
prepaid shall mature and become due and
payable on the date fixed for such
prepayment (which shall be a Business Day),
together with interest on such
principal amount accrued to such date and
the Prepayment Premium, if any, and
the LIBOR Breakage Amount, if any. From and
after such date, unless the Company
shall fail to pay such principal amount
when so due and payable, together with
the interest and the Prepayment Premium, if
any, and the LIBOR Breakage Amount,
if any, as aforesaid, interest on such
principal amount shall cease to accrue.
Any Note paid or prepaid in full shall be
surrendered to the Company and
cancelled and shall not be reissued, and no
Note shall be issued in lieu of any
prepaid principal amount of any Note.
Section
8.5 Purchase of Notes. The Company will not, 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 20 Business Days. If the holders
of more than 50% 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 five 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.
Section
8.6 Change of Control.
(a) Promptly and in any event within five Business Days after
any
Responsible Officer has knowledge of the occurrence of a Change
of
Control,
the Company shall give written notice thereof to each holder of
a
Note,
which notice shall (1) refer specifically to this Section 8.6
and
describe
the Change of Control in reasonable detail (including the
Persons
party
thereto), (2) specify a Business Day not less than 30 days and
not
more than
45 days after the date of such notice (the "Control Prepayment
Date") and
specify the Control Response Date (as defined below) and (3)
offer to
prepay
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<PAGE>
on the
Control Prepayment Date the Notes of such holder, at 100% of
the
principal
amount thereof, together with interest accrued thereon to the
Control
Prepayment Date, without any premium but with the LIBOR
Breakage
Amount, if
any, if such prepayment occurs on a date other than an Interest
Payment Date.
Each holder of a Note shall notify the Company of such
holder's
acceptance or rejection of such offer by giving written notice
of
such
acceptance or rejection to the Company on a date at least 10
days
prior to
the Control Prepayment Date (such date 10 days prior to the
Control
Prepayment Date being the "Control Response Date"), and the
Company
shall prepay on the Control Prepayment Date all Notes held by
each
holder
that has accepted such offer in accordance with this Section
8.6(a)
at a price
in respect of each such Note held by such holder equal to 100%
of the
principal amount thereof, together with interest accrued thereon
to
the
Control Prepayment Date, without any premium but with the LIBOR
Breakage
Amount, if any, if such prepayment occurs on a date other than
an
Interest
Payment Date.
(b) A "Change of Control" will be deemed to have occurred for
purposes
of Section 8.6(a) if any Person or two or more Persons acting
in
concert
acquires beneficial ownership (within the meaning of Rule 13d-3
under the
Exchange Act) of more than 35% of the Company's Voting Stock,
provided,
however, that no acquisition of any of the Company's Voting
Stock by Richard M. Fink, his
spouse, any direct or indirect lineal
descendant
and/or any trust created primarily for the benefit of any or
all of
such persons shall constitute or be considered in determining
whether or
not a Change of Control has occurred.
SECTION 9. AFFIRMATIVE COVENANTS.
The
Company covenants that so long as any of the Notes are
outstanding:
Section
9.1 Compliance with Law. Without limiting Section 10.8, the
Company will, and will cause each of its
Subsidiaries to, comply with all laws,
ordinances or governmental rules or
regulations to which each of them is
subject, including, without limitation,
ERISA, the USA Patriot Act and
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 would not,
individually or in the aggregate,
reasonably be expected to have a Material
Adverse Effect.
Section
9.2 Insurance. The Company will, and will cause each of its
Restricted Subsidiaries to, maintain, with
financially sound and reputable
insurers, insurance with respect to their
respective properties and businesses
against such casualties and contingencies,
of such types, on such terms and in
such amounts (including deductibles,
co-insurance and self-insurance, if
adequate reserves are maintained with
respect thereto) as is customary in the
case of entities of established reputations
engaged in the same or a similar
business and similarly situated except for
any non-maintenance that would not
reasonably be expected to have a Material
Adverse Effect.
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<PAGE>
Section
9.3 Maintenance of Properties. The Company will, and will cause
each of its Restricted Subsidiaries to,
maintain and keep, or cause to be
maintained and kept, their respective
properties in good repair, working order
and condition (other than ordinary wear and
tear), so that the business carried
on in connection therewith may be properly
conducted at all times, provided that
this Section shall not prevent the Company
or any Restricted Subsidiary from
discontinuing the operation and the
maintenance of any of its properties if such
discontinuance is desirable in the conduct
of its business and the Company has
concluded that such discontinuance would
not, individually or in the aggregate,
reasonably be expected to have a Material
Adverse Effect.
Section
9.4 Payment of Taxes and Claims. The Company will, and will
cause
each of its Subsidiaries to, file all tax
returns required to be filed in any
jurisdiction and to pay and discharge all
taxes shown to be due and payable on
such returns and all other taxes,
assessments, governmental charges or levies
imposed on them or any of their properties,
assets, income or franchises, to the
extent such taxes, assessments,
governmental charges or levies have become due
and payable and before they have become
delinquent and all claims for which sums
have become due and payable that have or
might become a Lien on properties or
assets of the Company or any Subsidiary not
permitted by Section 10.4, provided
that neither the Company nor any Subsidiary
need pay any such tax, assessment,
governmental charge, levy or claim if (a)
the amount, applicability or validity
thereof is contested by the Company or such
Subsidiary on a timely basis in good
faith and in appropriate proceedings, and
the Company or a Subsidiary has
established adequate reserves therefor in
accordance with GAAP on the books of
the Company or such Subsidiary or (b) the
non-filing of all such tax returns or
the nonpayment of all such taxes,
assessments, governmental charges, levies and
claims, in the aggregate, would not
reasonably be expected to have a Material
Adverse Effect.
Section
9.5 Corporate Existence, Etc. Subject to Section 10.5, 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 Company will at all times
preserve and keep in full force and effect
the legal existence of each of its
Restricted Subsidiaries (unless merged into
the Company or another Restricted
Subsidiary) and all rights and franchises
of the Company and its Restricted
Subsidiaries unless, in the good faith
judgment of the Company, the termination
of or failure to preserve and keep in full
force and effect such corporate
existence, right or franchise would not,
individually or in the aggregate,
reasonably be expected to have a Material
Adverse Effect.
Section
9.6 Designation of Subsidiaries. The Company may from time to
time
cause any Restricted Subsidiary (other than
a Subsidiary Guarantor) to be
designated as an Unrestricted Subsidiary or
any Unrestricted Subsidiary to be
designated a Restricted Subsidiary;
provided, however, that at the time of such
designation and immediately after giving
effect thereto, (a) no Default or Event
of Default would exist under the terms of
this Agreement and (b) the Company and
its Subsidiaries or Restricted
Subsidiaries, as the case may be, would be in
compliance with all of the covenants set
forth in this Section 9 and Section 10
if tested on the date of such action and
provided, further, that once a
Subsidiary has been designated an
Unrestricted Subsidiary or a Restricted
Subsidiary pursuant to this Section 9.6, it
shall not thereafter be redesignated
as a Restricted Subsidiary or an
Unrestricted Subsidiary on more than one
occasion. Within 10 days following any
designation described above, the Company
will deliver to each holder of Notes a
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notice of such designation accompanied by a
certificate signed by a Senior
Financial Officer certifying compliance
with all requirements of this Section
9.6 and setting forth all information
required in order to establish such
compliance.
Section
9.7 Notes and Subsidiary Guaranty to Rank Pari Passu.
(a) The Notes and all other obligations of the Company under
this
Agreement
are and at all times shall remain direct and senior unsecured
obligations of the Company ranking pari passu
