EXHIBIT 10.4
------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SCHAWK, INC.
--------
NOTE PURCHASE AND PRIVATE SHELF AGREEMENT
--------
$10,000,000 4.81% SERIES C SENIOR NOTES DUE JANUARY 28, 2010
$20,000,000 4.99% SERIES D SENIOR NOTES DUE JANUARY 28, 2011
$20,000,000 5.17% SERIES E SENIOR NOTES DUE JANUARY 28, 2012
AND
$25,000,000
PRIVATE SHELF FACILITY
DATED AS OF JANUARY 28, 2005
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S>
<C>
SECTION 1. AUTHORIZATION OF
NOTES................................................................................1
Section 1.1. Authorization of Issue of Series C
Notes...................................................1
Section 1.2. Authorization of Issue of Series D
Notes...................................................2
Section 1.3. Authorization of Issue of Series E
Notes...................................................2
Section 1.4. Authorization of Issue of Shelf
Notes......................................................2
SECTION 2. SALE AND PURCHASE OF
NOTES............................................................................3
Section 2.1. Purchase and Sale of Series C, Series D and Series E
Notes.................................3
Section 2.2. Purchase and Sale of Shelf
Notes...........................................................3
Section 2.3. Subsidiary
Guaranty........................................................................7
SECTION 3.
CLOSING...............................................................................................7
SECTION 4. CONDITIONS TO
CLOSING.................................................................................8
Section 4.1. Representations and
Warranties.............................................................8
Section 4.2. Performance; No
Default....................................................................8
Section 4.3. Compliance
Certificates....................................................................8
Section 4.4. Opinions of
Counsel........................................................................9
Section 4.5. Purchase Permitted by Applicable Law,
Etc..................................................9
Section 4.6. Acquisition of Seven Worldwide; Related Equity
Financing...................................9
Section 4.7. Payment of Special Counsel
Fees............................................................9
Section 4.8. Private Placement
Number..................................................................10
Section 4.9. Changes in Corporate
Structure............................................................10
Section 4.10. Subsidiary
Guaranty......................................................................10
Section 4.11. Payment of
Fees..........................................................................10
Section 4.12. Material Adverse
Change..................................................................10
Section 4.13. Amendment to 1995 Note
Agreement.........................................................10
Section 4.14. Bank Credit
Agreement....................................................................10
Section 4.15. Amendment to 2003 Note
Agreement.........................................................10
Section 4.16. Proceedings and
Documents................................................................11
SECTION 5. REPRESENTATIONS AND WARRANTIES
OF THE
COMPANY........................................................11
Section 5.1. Organization; Power and
Authority.........................................................11
Section 5.2. Authorization,
Etc........................................................................11
Section 5.3.
Disclosure................................................................................11
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates..........................12
Section 5.5. Financial
Statements......................................................................12
Section 5.6. Compliance with Laws, Other Instruments,
Etc..............................................13
Section 5.7. Governmental Authorizations,
Etc..........................................................13
Section 5.8. Litigation; Observance of Statutes and
Orders.............................................13
Section 5.9.
Taxes.....................................................................................13
-i-
<PAGE>
TABLE OF CONTENTS
(continued)
PAGE
Section 5.10. Title to Property;
Leases................................................................14
Section 5.11. Licenses, Permits,
Etc...................................................................14
Section 5.12. Compliance with
ERISA....................................................................14
Section 5.13. Private Offering by the
Company..........................................................15
Section 5.14. Use of Proceeds; Margin
Regulations......................................................15
Section 5.15. Existing Debt; Future
Liens..............................................................16
Section 5.16. Foreign Assets Control Regulations,
Etc..................................................16
Section 5.17. Status under Certain
Statutes............................................................16
Section 5.18. Environmental
Matters....................................................................16
Section 5.19. Notes Rank Pari
Passu....................................................................17
Section 5.20. Share Repurchase
Obligations.............................................................17
SECTION 6. REPRESENTATIONS OF THE
PURCHASER.....................................................................17
Section 6.1. Purchase for
Investment...................................................................17
Section 6.2. Source of
Funds...........................................................................17
SECTION 7. INFORMATION AS TO
COMPANY............................................................................19
Section 7.1. Financial and Business
Information........................................................19
Section 7.2. Officer's
Certificate.....................................................................21
Section 7.3.
Inspection................................................................................22
SECTION 8. PAYMENT OF THE
NOTES.................................................................................22
Section 8.1. Required
Prepayments......................................................................22
Section 8.2. Optional Prepayments with Make-Whole
Amount...............................................22
Section 8.3. Allocation of Partial
Prepayments.........................................................23
Section 8.4. Maturity; Surrender,
Etc..................................................................23
Section 8.5. Purchase of
Notes.........................................................................23
Section 8.6. Make-Whole
Amount.........................................................................23
Section 8.7. Offer to Prepay Notes in the Event of Asset
Sale..........................................25
SECTION 9. AFFIRMATIVE
COVENANTS................................................................................26
Section 9.1. Compliance with
Law.......................................................................26
Section 9.2.
Insurance.................................................................................26
Section 9.3. Maintenance of
Properties.................................................................26
Section 9.4. Payment of Taxes and
Claims...............................................................26
Section 9.5. Corporate Existence,
Etc..................................................................27
Section 9.6. Additional Subsidiary
Guarantors..........................................................27
Section 9.7. Designation of
Subsidiaries...............................................................28
Section 9.8. Notes to Rank Pari
Passu..................................................................28
SECTION 10. NEGATIVE
COVENANTS..................................................................................28
Section 10.1. Consolidated Net
Worth...................................................................28
-ii-
<PAGE>
Section 10.2. Limitations on
Debt......................................................................29
Section 10.3. Limitation on
Liens......................................................................29
Section 10.4. Sales of
Assets..........................................................................31
Section 10.5. Merger and
Consolidation.................................................................32
Section 10.6. Nature of
Business.......................................................................32
Section 10.7. Transactions with
Affiliates.............................................................32
Section 10.8. Restricted
Payments......................................................................33
Section 10.9. Share Repurchase
Obligations.............................................................33
SECTION 11. EVENTS OF
DEFAULT...................................................................................33
SECTION 12. REMEDIES ON DEFAULT,
ETC............................................................................35
Section 12.1.
Acceleration.............................................................................35
Section 12.2. Other
Remedies...........................................................................36
Section 12.3.
Rescission...............................................................................36
Section
12.4. No Waivers or Election of Remedies, Expenses,
Etc........................................36
SECTION 13. REGISTRATION; EXCHANGE;
SUBSTITUTION OF
NOTES.......................................................37
Section 13.1. Registration of
Notes....................................................................37
Section 13.2. Transfer and Exchange of
Notes...........................................................37
Section 13.3. Replacement of
Notes.....................................................................37
SECTION 14. PAYMENTS ON
NOTES...................................................................................38
Section 14.1. Place of
Payment.........................................................................38
Section 14.2. Home Office
Payment......................................................................38
SECTION 15. EXPENSES,
ETC.......................................................................................38
Section 15.1. Transaction
Expenses.....................................................................38
Section 15.2.
Survival.................................................................................39
SECTION 16. SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; ENTIRE
AGREEMENT........................................39
SECTION 17. AMENDMENT AND
WAIVER................................................................................39
Section 17.1.
Requirements.............................................................................39
Section 17.2. Solicitation of Holders of
Notes.........................................................40
Section 17.3. Binding Effect,
Etc......................................................................40
Section 17.4. Notes Held by Company,
Etc...............................................................40
-iii-
<PAGE>
SECTION 18.
NOTICES.............................................................................................41
SECTION 19. REPRODUCTION OF
DOCUMENTS...........................................................................41
SECTION 20. CONFIDENTIAL
INFORMATION............................................................................42
SECTION 21. SUBSTITUTION OF
PURCHASER...........................................................................43
SECTION 22.
MISCELLANEOUS.......................................................................................43
Section 22.1. Successors and
Assigns...................................................................43
Section 22.2. Payments Due on Non-Business
Days........................................................43
Section 22.3.
Severability.............................................................................43
Section 22.4.
Construction.............................................................................43
Section 22.5.
Counterparts.............................................................................44
Section 22.6. Governing
Law............................................................................44
</TABLE>
-iv-
<PAGE>
EXHIBITS AND SCHEDULES
INFORMATION SCHEDULE
SCHEDULE A --
PURCHASER
SCHEDULE
SCHEDULE B --
DEFINITIONS
EXHIBIT A-1 -- FORM OF SERIES C
NOTE
EXHIBIT A-2 -- FORM OF SERIES D
NOTE
EXHIBIT A-3 -- FORM OF SERIES E
NOTE
EXHIBIT A-4 -- FORM OF SHELF NOTE
EXHIBIT B --
FORM OF
DISBURSEMENT DIRECTION LETTER
EXHIBIT C --
FORM OF
REQUEST FOR PURCHASE
EXHIBIT D --
FORM OF
CONFIRMATION OF ACCEPTANCE
EXHIBIT E --
FORM OF
SUBSIDIARY GUARANTY
EXHIBIT F --
FORM OF
OPINION OF COMPANY AND GUARANTORS
COUNSEL
SCHEDULE 4.9 -- CHANGES IN CORPORATE
STRUCTURE
SCHEDULE 5.4 -- SUBSIDIARIES AND
AFFILIATES
SCHEDULE 5.5 -- FINANCIAL
STATEMENTS
SCHEDULE 5.11 -- LICENSES AND
PERMITS
SCHEDULE 5.15 -- EXISTING DEBT
SCHEDULE 10.3 -- EXISTING LIENS
-v-
<PAGE>
SCHAWK, INC.
1695 RIVER ROAD
DES PLAINES, ILLINOIS 60018
Dated as of January 28, 2005
Prudential Investment Management, Inc.
("PRUDENTIAL")
Each of the Purchasers named in
the Purchaser Schedule
attached
hereto as purchasers of Series
C
Notes, Series D Notes or Series
E
Notes (the "INITIAL
PURCHASERS")
Each other Prudential Affiliate (as
hereinafter defined) which
becomes
bound by certain provisions of
this
Agreement as hereinafter
provided
c/o Prudential Capital Group
Two Prudential Plaza, Suite 5600
Chicago, Illinois 60601
Ladies and Gentlemen:
SCHAWK, INC., a Delaware corporation (the "COMPANY"), agrees with
you
as follows:
SECTION 1. AUTHORIZATION OF NOTES.
SECTION 1.1. AUTHORIZATION OF ISSUE OF SERIES C NOTES. The Company
will
authorize the issue of its senior
promissory notes (the "SERIES C NOTES") in the
aggregate principal amount of $10,000,000,
to be dated the date of issue
thereof, to mature January 28, 2010, to
bear interest on the unpaid balance
thereof from the date thereof until the
principal thereof shall have become due
and payable at the rate of 4.81% per annum
(provided that, during any period
when an Event of Default shall be in
existence, at the election of the Required
Holder(s) of the Series C Notes the
outstanding principal balance of the Series
C Notes shall bear interest from and after
the date of such Event of Default and
until such Event of Default ceases to be in
existence at the rate per annum from
time to time equal to the Default Rate) and
on overdue payments at the rate per
annum from time to time equal to the
Default Rate, and to be substantially in
the form of Exhibit A-1 attached hereto.
The terms "SERIES C NOTE" and "SERIES C
NOTES" as used herein shall include each
Series C Note delivered pursuant to any
provision of this Agreement and each Series
C Note delivered in substitution or
exchange for any other Series C Note
pursuant to any such provision.
<PAGE>
SECTION 1.2. AUTHORIZATION OF ISSUE OF SERIES D NOTES. The Company
will
authorize the issue of its senior
promissory notes (the "SERIES D NOTES") in the
aggregate principal amount of $20,000,000,
to be dated the date of issue
thereof, to mature January 28, 2011, to
bear interest on the unpaid balance
thereof from the date thereof until the
principal thereof shall have become due
and payable at the rate of 4.99% per annum
(provided that, during any period
when an Event of Default shall be in
existence, at the election of the Required
Holder(s) of the Series D Notes the
outstanding principal balance of the Series
D Notes shall bear interest from and after
the date of such Event of Default and
until such Event of Default ceases to be in
existence at the rate per annum from
time to time equal to the Default Rate) and
on overdue payments at the rate per
annum from time to time equal to the
Default Rate, and to be substantially in
the form of Exhibit A-2 attached hereto.
The terms "SERIES D NOTE" and "SERIES D
NOTES" as used herein shall include each
Series D Note delivered pursuant to any
provision of this Agreement and each Series
D Note delivered in substitution or
exchange for any other Series D Note
pursuant to any such provision.
SECTION
1.3. AUTHORIZATION OF ISSUE OF SERIES E NOTES. The Company will
authorize the issue of its senior
promissory notes (the "SERIES E NOTES") in the
aggregate principal amount of $20,000,000,
to be dated the date of issue
thereof, to mature January 28, 2012, to
bear interest on the unpaid balance
thereof from the date thereof until the
principal thereof shall have become due
and payable at the rate of 5.17% per annum
(provided that, during any period
when an Event of Default shall be in
existence, at the election of the Required
Holder(s) of the Series E Notes the
outstanding principal balance of the Series
E Notes shall bear interest from and after
the date of such Event of Default and
until such Event of Default ceases to be in
existence at the rate per annum from
time to time equal to the Default Rate) and
on overdue payments at the rate per
annum from time to time equal to the
Default Rate, and to be substantially in
the form of Exhibit A-3 attached hereto.
The terms "SERIES E NOTE" and "SERIES E
NOTES" as used herein shall include each
Series E Note delivered pursuant to any
provision of this Agreement and each Series
E Note delivered in substitution or
exchange for any other Series E Note
pursuant to any such provision.
SECTION 1.4. AUTHORIZATION OF ISSUE OF SHELF NOTES. The Company
will
authorize the issue of its senior
promissory notes (the "SHELF NOTES") in the
aggregate principal amount of $25,000,000,
to be dated the date of issue
thereof, to mature, in the case of each
Shelf Note so issued, no more than 10
years after the date of original issuance
thereof, to have an average life, in
the case of each Shelf Note so issued, of
no more than 7 years after the date of
original issuance thereof, to bear interest
on the unpaid balance thereof from
the date thereof at the rate per annum, and
to have such other particular terms,
as shall be set forth, in the case of each
Shelf Note so issued, in the
Confirmation of Acceptance with respect to
such Shelf Note delivered pursuant to
Section 2.2(5), and to be substantially in
the form of Exhibit A-4 attached
hereto. The terms "SHELF NOTE" and "SHELF
NOTES" as used herein shall include
each Shelf Note delivered pursuant to any
provision of this Agreement and each
Shelf Note delivered in substitution or
exchange for any such Shelf Note
pursuant to any such provision. The terms
"NOTE" and "NOTES" as used herein
shall include each Series C Note, each
Series D Note, each Series E Note and
each Shelf Note. Notes which have (i) the
same final maturity, (ii) the same
principal prepayment dates, (iii) the same
principal prepayment amounts (as a
percentage of the original principal amount
of each Note), (iv) the same
interest rate, (v) the same interest
payment periods and (vi) the same date of
issuance (which, in the case of a Note
issued in exchange for
2
<PAGE>
another Note, shall be deemed for these
purposes the date on which such Note's
ultimate predecessor Note was issued), are
herein called a "SERIES" of Notes.
SECTION 2. SALE AND PURCHASE OF NOTES.
SECTION 2.1. PURCHASE AND SALE OF SERIES C, SERIES D AND SERIES
E
NOTES. The Company hereby agrees to sell to
each Initial Purchaser and, subject
to the terms and conditions herein set
forth, each Initial Purchaser agrees to
purchase from the Company the aggregate
principal amount of Series C Notes,
Series D Notes and/or Series E Notes set
forth opposite such Initial Purchaser's
name on the Purchaser Schedule attached
hereto at 100% of such aggregate
principal amount. On January 28, 2005
(herein called the "SERIES C-E CLOSING
DATE"), the Company will deliver to each
Initial Purchaser at the offices of
Schiff Hardin LLP, at 6600 Sears Tower,
Chicago, Illinois, one or more Series C
Notes, Series D Notes and/or Series E
Notes, as applicable, registered in such
Initial Purchaser's name (or, if specified
in the Purchaser Schedule, in the
name of the nominee(s) for such Initial
Purchaser specified in the Purchaser
Schedule), evidencing the aggregate
principal amount of Series C Notes, Series D
Notes and/or Series E Notes to be purchased
by such Initial Purchaser and in the
denomination or denominations specified
with respect to such Initial Purchaser
in the Purchaser Schedule attached hereto,
against payment of the purchase price
thereof by transfer of immediately
available funds for credit to the account or
accounts as shall be specified in a letter
on the Company's letterhead, in
substantially the form of Exhibit B
attached hereto, from the Company to the
Initial Purchasers delivered prior to the
Series C-E Closing Date.
SECTION 2.2. PURCHASE AND SALE OF SHELF NOTES.
SECTION 2.2(1). FACILITY. Prudential is willing to consider, in
its
sole discretion and within limits which may
be authorized for purchase by
Prudential Affiliates from time to time,
the purchase of Shelf Notes pursuant to
this Agreement. The willingness of
Prudential to consider such purchase of Shelf
Notes is herein called the "FACILITY". At
any time, the aggregate principal
amount of Shelf Notes stated in Section
1.4, minus the aggregate principal
amount of Shelf Notes purchased and sold
pursuant to this Agreement prior to
such time, minus the aggregate principal
amount of Accepted Notes (as
hereinafter defined) which have not yet
been purchased and sold hereunder prior
to such time, is herein called the
"AVAILABLE FACILITY AMOUNT" at such time.
NOTWITHSTANDING THE WILLINGNESS OF
PRUDENTIAL TO CONSIDER PURCHASES OF SHELF
NOTES BY PRUDENTIAL AFFILIATES, THIS
AGREEMENT IS ENTERED INTO ON THE EXPRESS
UNDERSTANDING THAT NEITHER PRUDENTIAL NOR
ANY PRUDENTIAL AFFILIATE SHALL BE
OBLIGATED TO MAKE OR ACCEPT OFFERS TO
PURCHASE SHELF NOTES, OR TO QUOTE RATES,
SPREADS OR OTHER TERMS WITH RESPECT TO
SPECIFIC PURCHASES OF SHELF NOTES, AND
THE FACILITY SHALL IN NO WAY BE CONSTRUED
AS A COMMITMENT BY PRUDENTIAL OR ANY
PRUDENTIAL AFFILIATE.
SECTION 2.2(2). ISSUANCE PERIOD. Shelf Notes may be issued and
sold
pursuant to this Agreement until the
earlier of (i) the third anniversary of the
date of this Agreement (or if the date of
such anniversary is not a Business
Day, the Business Day next preceding such
anniversary), (ii) the 30th day after
Prudential shall have given to the Company,
or the Company shall have given to
Prudential, a written notice stating that
it elects to terminate the issuance
and
3
<PAGE>
sale of Notes pursuant to this Agreement
(or if such 30th day is not a Business
Day, the Business Day next preceding such
30th day), (iii) the last Closing Date
after which there is no Available Facility
Amount, (iv) the termination of the
Facility under Section 12.1 of this
Agreement, and (v) the acceleration of any
Shelf Note under Section 12.1 of this
Agreement. The period during which Shelf
Notes may be issued and sold pursuant to
this Agreement is herein called the
"ISSUANCE PERIOD".
SECTION 2.2(3). REQUEST FOR PURCHASE. The Company may from time to
time
during the Issuance Period make requests
for purchases of Shelf Notes (each such
request being herein called a "REQUEST FOR
PURCHASE"). Each Request for Purchase
shall be made to Prudential by telecopier
or overnight delivery service, and
shall (i) specify the aggregate principal
amount of Shelf Notes covered thereby,
which shall not be less than $5,000,000 and
not be greater than the Available
Facility Amount at the time such Request
for Purchase is made, (ii) specify the
principal amounts, final maturities (which
shall be no more than 10 years from
the date of issuance), average life (which
shall be no more than 7 years from
the date of issuance), principal prepayment
dates (if any) and amounts and
interest payment periods (quarterly or
semi-annually in arrears) of the Shelf
Notes covered thereby, (iii) specify the
use of proceeds of such Shelf Notes,
(iv) specify the proposed day for the
closing of the purchase and sale of such
Shelf Notes, which shall be a Business Day
during the Issuance Period not less
than 10 days and not more than 25 days
after the making of such Request for
Purchase, (v) specify the number of the
account and the name and address of the
depository institution to which the
purchase prices of such Shelf Notes are to
be transferred on the Closing Date for such
purchase and sale, (vi) certify that
the representations and warranties
contained in Section 5 are true on and as of
the date of such Request for Purchase and
that there exists on the date of such
Request for Purchase no Event of Default or
Default, and (vii) be substantially
in the form of Exhibit C attached hereto.
Each Request for Purchase shall be in
writing and shall be deemed made when
received by Prudential.
SECTION 2.2(4). RATE QUOTES. Not later than five Business Days
after
the Company shall have given Prudential a
Request for Purchase pursuant to
Section 2.2(3), Prudential may, but shall
be under no obligation to, provide to
the Company by telephone or telecopier, in
each case between 9:30 A.M. and 1:30
P.M. New York City local time (or such
later time as Prudential may elect)
interest rate quotes for the several
principal amounts, maturities, principal
prepayment schedules and interest payment
periods of Shelf Notes specified in
such Request for Purchase. Each quote shall
represent the interest rate per
annum payable on the outstanding principal
balance of such Shelf Notes at which
a Prudential Affiliate or Affiliates would
be willing to purchase such Notes at
100% of the principal amount thereof.
SECTION 2.2(5). ACCEPTANCE. Within the Acceptance Window with
respect
to any interest rate quotes provided
pursuant to Section 2.2(4), the Company
may, subject to Section 2.2(6), elect to
accept such interest rate quotes as to
not less than $5,000,000 aggregate
principal amount of the Shelf Notes specified
in the related Request for Purchase. Such
election shall be made by an
Authorized Officer of the Company notifying
Prudential by telephone or
telecopier within the Acceptance Window
that the Company elects to accept such
interest rate quotes, specifying the Shelf
Notes (each such Shelf Note being
herein called an "ACCEPTED NOTE") as to
which such acceptance (herein called an
"ACCEPTANCE") relates. The day the Company
notifies Prudential of an Acceptance
with respect to any Accepted Notes is
herein
4
<PAGE>
called the "ACCEPTANCE DAY" for such
Accepted Notes. Any interest rate quotes as
to which Prudential does not receive an
Acceptance within the Acceptance Window
shall expire, and no purchase or sale of
Shelf Notes hereunder shall be made
based on such expired interest rate quotes.
Subject to Section 2.2(6) and the
other terms and conditions hereof, the
Company agrees to sell to a Prudential
Affiliate or Affiliates, and Prudential
agrees to cause the purchase by a
Prudential Affiliate or Affiliates of, the
Accepted Notes at 100% of the
principal amount of such Notes. As soon as
practicable following the Acceptance
Day, the Company and each Prudential
Affiliate which is to purchase any such
Accepted Notes will execute a confirmation
of such Acceptance substantially in
the form of Exhibit D attached hereto
(herein called a "CONFIRMATION OF
ACCEPTANCE"). If the Company should fail to
execute and return to Prudential
within three Business Days following the
Company's receipt thereof a
Confirmation of Acceptance with respect to
any Accepted Notes, Prudential or any
Prudential Affiliate may at its election at
any time prior to Prudential's
receipt thereof cancel the closing with
respect to such Accepted Notes by so
notifying the Company in writing.
SECTION 2.2(6). MARKET DISRUPTION. Notwithstanding the provisions
of
Section 2.2(5), if Prudential shall have
provided interest rate quotes pursuant
to Section 2.2(4) and thereafter prior to
the time an Acceptance with respect to
such quotes shall have been notified to
Prudential in accordance with Section
2.2(5) the domestic market for U.S.
Treasury securities or other financial
instruments shall have closed or there
shall have occurred a general suspension,
material limitation, or significant
disruption of trading in securities
generally on the New York Stock Exchange or
in the domestic market for U.S.
Treasury securities or other financial
instruments, then such interest rate
quotes shall expire, and no purchase or
sale of Shelf Notes hereunder shall be
made based on such expired interest rate
quotes. If the Company thereafter
notifies Prudential of the Acceptance of
any such interest rate quotes, such
Acceptance shall be ineffective for all
purposes of this Agreement, and
Prudential shall promptly notify the
Company that the provisions of this Section
2.2(6) are applicable with respect to such
Acceptance.
SECTION 2.2(7). FACILITY CLOSINGS. Not later than 11:30 A.M. (New
York
City local time) on the Closing Date for
any Accepted Notes, the Company will
deliver to each Purchaser listed in the
Confirmation of Acceptance relating
thereto at the offices of Prudential
Capital Group, 180 North Stetson Street,
Suite 5600, Chicago, Illinois 60601,
Attention: Law Department, the Accepted
Notes to be purchased by such Purchaser in
the form of one or more Notes in
authorized denominations as such Purchaser
may request for each Series of the
Accepted Notes to be purchased on the
Closing Date, dated the Closing Date and
registered in such Purchaser's name (or in
the name of its nominee), against
payment of the purchase price thereof by
transfer of immediately available funds
for credit to the Company's account
specified in the Request for Purchase of
such Notes. If the Company fails to tender
to any Purchaser the Accepted Notes
to be purchased by such Purchaser on the
scheduled Closing Date for such
Accepted Notes as provided above in this
Section 2.2(7), or any of the
conditions specified in Section 4 shall not
have been fulfilled by the time
required on such scheduled Closing Date,
the Company shall, prior to 1:00 P.M.,
New York City local time, on such scheduled
Closing Date notify Prudential
(which notification shall be deemed
received by each Purchaser) in writing
whether (i) such closing is to be
rescheduled (such rescheduled date to be a
Business Day during the Issuance Period not
less than one Business Day and not
more than 10 Business Days after such
scheduled Closing Date (the "RESCHEDULED
CLOSING DATE")) and certify to Prudential
(which certification shall be for the
benefit of each Purchaser) that the Company
reasonably
5
<PAGE>
believes that it will be able to comply
with the conditions set forth in Section
4 on such Rescheduled Closing Date and that
the Company will pay the Delayed
Delivery Fee in accordance with Section
2.2(8)(iii) or (ii) such closing is to
be canceled. In the event that the Company
shall fail to give such notice
referred to in the preceding sentence,
Prudential (on behalf of each Purchaser)
may at its election, at any time after 1:00
P.M., New York City local time, on
such scheduled Closing Date, notify the
Company in writing that such closing is
to be canceled. Notwithstanding anything to
the contrary appearing in this
Agreement, the Company may not elect to
reschedule a closing with respect to any
given Accepted Notes on more than one
occasion, unless Prudential shall have
otherwise consented in writing.
SECTION 2.2(8). FEES.
SECTION 2.2(8)(i). STRUCTURING FEE. On the Series C-E Closing Date,
the
Company will pay to Prudential by wire
transfer of immediately available funds a
fee (herein called the "STRUCTURING FEE")
in the amount of $25,000.00.
SECTION 2.2(8)(ii). ISSUANCE FEE. The Company will pay to each
Purchaser in immediately available funds a
fee (herein called the "ISSUANCE
FEE") on each Closing Date (other than the
Series C-E Closing Date) in an amount
equal to 0.10% of the aggregate principal
amount of Notes sold to such Purchaser
on such Closing Date.
SECTION
2.2(8)(iii). DELAYED DELIVERY FEE. If the closing of the
purchase and sale of any Accepted Note is
delayed for any reason beyond the
original Closing Date for such Accepted
Note, the Company will pay to the
Purchaser which shall have agreed to
purchase such Accepted Note (a) on the
Cancellation Date or actual closing date of
such purchase and sale and (b) if
earlier, the next Business Day following 90
days after the Acceptance Day for
such Accepted Note and on each Business Day
following 90 days after the prior
payment hereunder, a fee (herein called the
"DELAYED DELIVERY FEE") calculated
as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield,
i.e., the bond equivalent yield per
annum of such Accepted Note; "MMY" means
Money Market Yield, i.e., the yield per
annum on a commercial paper investment of
the highest quality selected by
Prudential and having a maturity date or
dates the same as, or closest to, the
Rescheduled Closing Date or Rescheduled
Closing Dates for such Accepted Note (a
new alternative investment being selected
by Prudential each time such closing
is delayed); "DTS" means Days to
Settlement, i.e., the number of actual days
elapsed from and including the original
Closing Date for such Accepted Note (in
the case of the first such payment with
respect to such Accepted Note) or from
and including the date of the next
preceding payment (in the case of any
subsequent Delayed Delivery Fee payment
with respect to such Accepted Note) to
but excluding the date of such payment; and
"PA" means Principal Amount, i.e.,
the principal amount of the Accepted Note
for which such calculation is being
made. In no case shall the Delayed Delivery
Fee be less than zero. Nothing
contained herein shall obligate any
Purchaser to purchase any Accepted Note on
any day other than the Closing Date for
such Accepted Note, as the same may be
rescheduled from time to time in compliance
with Section 2.2(7).
6
<PAGE>
SECTION 2.2(8)(iv). CANCELLATION FEE. If the Company at any
time
notifies Prudential in writing that the
Company is canceling the closing of the
purchase and sale of any Accepted Note, or
if Prudential notifies the Company in
writing under the circumstances set forth
in the last sentence of Section 2.2(5)
or the penultimate sentence of Section
2.2(7) that the closing of the purchase
and sale of such Accepted Note is to be
canceled, or if the closing of the
purchase and sale of such Accepted Note is
not consummated on or prior to the
last day of the Issuance Period (the date
of any such notification or the last
day of the Issuance Period, as the case may
be, being herein called the
"CANCELLATION DATE"), the Company will pay
to the Purchaser which shall have
agreed to purchase such Accepted Note in
immediately available funds an amount
(the "CANCELLATION FEE") calculated as
follows:
PI X PA
where "PI" means Price Increase, i.e., the
quotient (expressed in decimals)
obtained by dividing (a) the excess of the
ask price (as determined by
Prudential) of the Hedge Treasury Note(s)
on the Cancellation Date over the bid
price (as determined by Prudential) of the
Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by
(b) such bid price; and "PA" has the
meaning ascribed to it in Section
2.2(8)(iii). The foregoing bid and ask prices
shall be as reported by TradeWeb LLC (or,
if such data for any reason ceases to
be available through TradeWeb LLC, any
publicly available source of similar
market data). Each price shall be rounded
to the second decimal place. In no
case shall the Cancellation Fee be less
than zero.
SECTION 2.3. 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 E attached hereto, and
otherwise in accordance with the
provisions of Section 9.6 hereof (the
"SUBSIDIARY GUARANTY").
(b) The holders of the Notes agree to discharge and release any
Subsidiary Guarantor from the Subsidiary
Guaranty upon the written request of
the Company, provided that (i) 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 any other Debt
of the Company and the Company so certifies
to the holders of the Notes in a
certificate of a Responsible Officer, (ii)
at the time of such release and
discharge, the Company shall deliver a
certificate of a Responsible Officer to
the holders of the Notes stating that no
Default or Event of Default exists, and
(iii) if any fee or other form of
consideration is given to any holder of Debt
of the Company in connection with such
release, the holders of the Notes shall
receive the same consideration (a
"COLLATERAL RELEASE").
SECTION 3. CLOSING.
The sale and purchase of any Notes to be purchased by each
Purchaser
shall occur as provided in Section 2.1 or
2.2(7), as the case may be. If, on the
Closing Date for any Notes, the Company
shall fail to tender the Notes to any
Purchaser as provided above in Section 2.1
or 2.2(7), as the case may be, or any
of the conditions specified in Section 4
shall not have been
7
<PAGE>
fulfilled to any Purchaser's satisfaction,
such Purchaser shall, at such
Purchaser's election, be relieved of all
further obligations under this
Agreement, without thereby waiving any
rights such Purchaser may have by reason
of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
The obligation of each Purchaser to purchase and pay for the Notes
to
be sold to such Purchaser on any Closing
Date is subject to the fulfillment to
such Purchaser's satisfaction, prior to or
on such 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
at the time of such Closing Date, both
before and immediately after giving
effect to the issuance of the Notes on the
closing Date and the consummation of
the transactions contemplated hereby.
(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 at
the time of such 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 the Company and each
such Subsidiary Guarantor prior to or
on such 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)
and the consummation of the transactions
contemplated hereby, 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 December 31, 2003
that would have been prohibited by Section
10 hereof had such Section applied
since such date.
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 such Closing Date,
certifying that the conditions specified in
Sections 4.1(a), 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,
dated such 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
such 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, dated
such Closing Date, certifying as to the
8
<PAGE>
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 such
Closing Date (a) from Vedder, Price,
Kaufman & Kammholz, special counsel for the
Company, covering the matters set forth in
Exhibit F and covering such other
matters incident to the transactions
contemplated hereby as such Purchaser or
such Purchaser's counsel may reasonably
request (and the Company hereby
instructs its counsel to deliver such
opinion to such Purchaser) and (b) from
Wiley S. Adams, Vice President and
Corporate Counsel of Prudential or such other
counsel who is acting as special counsel
for Prudential in connection with this
transaction, a favorable opinion
satisfactory to Prudential as to such matters
incident to the matters herein contemplated
as it may reasonably request.
SECTION 4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC. On such
Closing
Date each purchase of Notes shall (a) be
permitted by the laws and regulations
of each jurisdiction to which each
Purchaser is subject, without recourse to
provisions (such as Section 1405(a)(8) of
the New York Insurance Law) permitting
limited investments by insurance companies
without restriction as to the
character of the particular investment, (b)
not violate any applicable law or
regulation (including, without limitation,
Regulation T, U or X of the Board of
Governors of the Federal Reserve System)
and (c) not subject any Purchaser to
any tax, penalty or liability under or
pursuant to any applicable law or
regulation, which law or regulation was not
in effect on the date hereof. If
requested by any Purchaser, such Purchaser
shall have received an Officer's
Certificate certifying as to such matters
of fact as such Purchaser may
reasonably specify to enable such Purchaser
to determine whether such purchase
is so permitted.
SECTION 4.6. ACQUISITION OF SEVEN WORLDWIDE; RELATED EQUITY
FINANCING.
With respect to the Series C-E Closing
Date, the Stock Purchase Agreement dated
December 17, 2004, among the Company, Seven
Worldwide, Inc., a Delaware
corporation, KAGT Holdings, Inc., a
Delaware corporation ("SEVEN WORLDWIDE
HOLDINGS"), Kohlberg Investors IV, L.P.,
Kohlberg TE Investors IV, L.P.,
Kohlberg Offshore Investors IV, L.P.,
Kohlberg Partners IV, L.P., KOCO
Investors, L.P., Silver Point Capital Fund,
L.P., Silver Point Capital Offshore
Fund, Limited, Hudson River Co. Investment
Fund, L.P., and VOIII, LLC (the
"ACQUISITION AGREEMENT"), providing for the
acquisition of stock of Seven
Worldwide Holdings for an aggregate
purchase price not in excess of
$191,000,000, subject to the adjustment for
working capital as set forth
therein, plus related fees and expenses,
shall be in form and substance
satisfactory to such Purchaser, shall have
been duly executed and delivered by
the parties thereto and shall be in full
force and effect. Such Purchaser shall
have received a copy of the Acquisition
Agreement and all instruments, documents
and agreements related thereto or to such
equity financing, certified by an
Officer's Certificate of the Company, dated
Series C-E Closing Date, as correct
and complete.
SECTION 4.7. PAYMENT OF SPECIAL COUNSEL FEES. Without limiting
the
provisions of Section 15.1, the Company
shall have paid on or before such
Closing Date, the reasonable fees,
reasonable charges and reasonable
disbursements of Schiff Hardin LLP,
Purchasers' special counsel, to the extent
reflected in a statement of such counsel
rendered to the Company at least one
Business Day prior to such Closing
Date.
9
<PAGE>
SECTION 4.8. PRIVATE PLACEMENT NUMBER. A Private Placement
Number
issued by Standard & Poor's CUSIP
Service Bureau (in cooperation with the
Securities Valuation Office of the National
Association of Insurance
Commissioners) shall have been obtained for
the Notes.
SECTION 4.9. CHANGES IN CORPORATE STRUCTURE. Neither the Company
nor
any Subsidiary Guarantor shall have changed
its jurisdiction of organization or,
except as reflected in Schedule 4.9, 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, shall
constitute the legal, valid and binding
contract and agreement of each
Subsidiary Guarantor, such Purchaser shall
have received a true, correct and
complete copy thereof and, with respect to
each Closing Date subsequent to the
Series C-E Closing Date, each Subsidiary
Guarantor shall have executed and
delivered to such Purchaser a Guaranty
Ratification in the form attached to the
Subsidiary Guaranty.
SECTION 4.11. PAYMENT OF FEES. The Company shall have paid to
Prudential or such Purchaser in immediately
available funds any fees due it
pursuant to or in connection with this
Agreement, including the Structuring Fee
due pursuant to Section 2.2(8)(i), any
Issuance Fee due pursuant to paragraph
2.2(8)(ii) and any Delayed Delivery Fee due
pursuant to paragraph 2.2(8)(iii).
SECTION 4.12. MATERIAL ADVERSE CHANGE. No material adverse change
in
the business, condition (financial or
otherwise), operations or prospects of the
Company and its Subsidiaries, taken as a
whole, or Seven Worldwide and its
Subsidiaries, taken as a whole, in either
case since December 31, 2003 shall
have occurred or be threatened, as
determined by such Purchaser in its sole
judgment.
SECTION 4.13. AMENDMENT TO 1995 NOTE AGREEMENT. With respect to
the
Series C-E Closing Date, the Company shall
have entered into an amendment to the
1995 Note Agreement which amends the 1995
Note Agreement to conform the
covenants therein to the covenants set
forth herein, all in form and substance
satisfactory to such Purchaser, and all
conditions precedent to the
effectiveness of such amendment shall have
been satisfied.
SECTION 4.14. BANK CREDIT AGREEMENT. The Company, the
Administrative
Agent and the other financial institutions
parties to the Bank Credit Agreement
shall have entered into the Bank Credit
Agreement, in form and substance
satisfactory such Purchaser, all conditions
precedent to the making of loans
thereunder shall have been satisfied (other
than the closing of the acquisition
referenced to in Section 4.6), and the Bank
Credit Agreement shall be in full
force and effect. Such Purchaser shall have
received copies of the Bank Credit
Agreement and such of the closing documents
delivered thereunder as such
Purchaser may request.
SECTION 4.15. AMENDMENT TO 2003 NOTE AGREEMENT. The Company and
the
holders of the 2003 Notes shall have
entered into an amendment to the 2003 Note
Agreement which amends Sections 9.6,
10.2(b) and 10.4 of the 2003 Note Agreement
to conform those Sections to
10
<PAGE>
Sections 9.6, 10.2(b) and 10.4 as set forth
herein, all in form and substance
satisfactory to such Purchaser, all
conditions precedent to the effectiveness of
such amendment shall have been satisfied
and such amendment shall be in full
force and effect. Such Purchaser shall have
received a copy of such amendment.
SECTION 4.16. PROCEEDINGS AND DOCUMENTS. All corporate or other
organizational proceedings in connection
with the transactions contemplated by
this Agreement and all documents and
instruments incident to such transactions
shall be satisfactory to such Purchaser and
such Purchaser's special counsel,
and such Purchaser and such Purchaser's
special counsel shall have received all
such counterpart originals or certified or
other copies of such documents as
such Purchaser or such Purchaser's special
counsel may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser that:
SECTION 5.1. ORGANIZATION; POWER AND AUTHORITY. The Company is
a
corporation duly organized, validly
existing and in good standing under the laws
of its jurisdiction of incorporation, and
is duly qualified as a foreign
corporation and is in good standing in each
jurisdiction in which such
qualification is required by law, other
than those jurisdictions as to which the
failure to be so qualified or in good
standing could not, individually or in the
aggregate, reasonably be expected to have a
Material Adverse Effect. The Company
has the corporate power and authority to
own or hold under lease the properties
it purports to own or hold under lease, to
transact the business it transacts
and proposes to transact, to execute and
deliver this Agreement and the Notes
and to perform the provisions hereof and
thereof.
SECTION 5.2.
AUTHORIZATION, ETC. 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 (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).
SECTION 5.3. DISCLOSURE. The Public Filings of the Company
fairly
describes, in all material respects, the
general nature of the business and
principal properties of the Company and its
Restricted Subsidiaries. This
Agreement, the Public Filings of the
Company, the documents, certificates or
other writings delivered to the Purchasers
by or on behalf of the Company in
connection with the transactions
contemplated hereby and the financial
statements listed in Schedule 5.5, taken as
a whole, do not contain any untrue
statement of a material fact or omit to
state any material fact necessary to
make the statements therein not misleading
in light of the circumstances under
which they were made. Since December 31,
2003, there has been no change in the
financial condition, operations, business
or properties of the Company or any of
its Restricted Subsidiaries except changes
that individually or in the aggregate
could not reasonably be expected to have a
Material Adverse Effect. There is no
fact known to the Company that could
reasonably be expected to have a Material
Adverse Effect that has not been set forth
herein
11
<PAGE>
or in the Public Filings of the Company or
in the other documents, certificates
and other writings delivered to each
Purchaser by or on behalf of the Company
specifically for use in connection with the
transactions contemplated hereby.
SECTION 5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF
SUBSIDIARIES;
AFFILIATES. (a) Schedule 5.4 contains
(except as noted therein) complete and
correct lists of (i) the Company's
Restricted and Unrestricted Subsidiaries,
showing, as to each Subsidiary, the correct
name thereof, the jurisdiction of
its organization, 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 whether, as of the Series
C-E Closing Date, such Subsidiary is a
Restricted or an Unrestricted Subsidiary,
and all other Investments of the
Company and its Restricted Subsidiaries,
(ii) the Company's Affiliates, other
than Subsidiaries, and (iii) the Company's
directors and senior officers.
(b) Except with respect to De Minimis Subsidiaries, 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) Except with respect to De Minimis Subsidiaries, 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. Except with
respect to De Minimis Subsidiaries, 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) Except with respect to De Minimis Subsidiaries, no Subsidiary
is a
party to, or otherwise subject to, any
legal restriction or any agreement (other
than this Agreement, the agreements listed
on Schedule 5.4 and customary
limitations imposed by corporate law
statutes) restricting the ability of such
Subsidiary to pay dividends out of profits
or make any other similar
distributions of profits to the Company or
any of its Subsidiaries that owns
outstanding shares of capital stock or
similar equity interests of such
Subsidiary.
SECTION 5.5. FINANCIAL STATEMENTS. The Company has delivered to
each
Purchaser copies of the financial
statements of the Company and its Subsidiaries
listed on Schedule 5.5. All of said
financial statements (including in each case
the related schedules and notes), and any
financial statements delivered
pursuant to Section 7.1, fairly present in
all material respects the
consolidated financial position of the
Company and its Subsidiaries as of the
respective dates specified in such
financial statements and the consolidated
results of their operations and cash flows
for the respective periods so
specified and have been prepared in
accordance with GAAP consistently applied
throughout the periods involved except as
set forth in the notes thereto
(subject, in the case of any interim
financial statements, to normal year-end
adjustments).
12
<PAGE>
SECTION
5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. The
execution, delivery and performance by the
Company of this Agreement and the
Notes will not (a) contravene, result in
any breach of, or constitute a default
under, or result in the creation of any
Lien 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 the Company of this Agreement or the
Notes.
SECTION 5.8. LITIGATION; OBSERVANCE OF STATUTES AND ORDERS. (a)
There
are no actions, suits or proceedings
pending or, to the knowledge of the
Company, threatened against or affecting
the Company or any 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, could 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) of any
Governmental Authority, which default or
violation, individually or in the
aggregate, could reasonably be expected to
have a Material Adverse Effect.
SECTION 5.9. TAXES. The Company and its Restricted Subsidiaries
have
filed all tax returns that are required to
have been filed in any jurisdiction
which the failure to file would result in a
Material Adverse Effect, and have
paid all taxes shown to be due and payable
on such returns and all other taxes
and assessments levied upon them or their
properties, assets, income or
franchises, to the extent such taxes and
assessments have become due and payable
and before they have become delinquent,
except for any taxes and assessments (a)
the amount of which is not individually or
in the aggregate Material or (b) the
amount, applicability or validity of which
is currently being contested in good
faith by appropriate proceedings and with
respect to which the Company or a
Subsidiary, as the case may be, has
established adequate reserves in accordance
with GAAP. The Company knows of no basis
for any other tax or assessment that
could reasonably be expected to have a
Material Adverse Effect. The charges,
accruals and reserves on the books of the
Company and its Subsidiaries in
respect of federal, state or other taxes
for all fiscal periods are adequate.
The federal income tax liabilities of the
Company and its Subsidiaries have been
determined by the Internal Revenue Service
and paid for all fiscal years up to
and including the fiscal year ended
December 31, 2000.
13
<PAGE>
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. Except as disclosed in
Schedule
5.11, (a) the Company and its Restricted
Subsidiaries own or possess all
licenses, permits, franchises,
authorizations, patents, copyrights, service
marks, trademarks and trade names, or
rights thereto, that individually or in
the aggregate are Material, without known
conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the Company
or
any of its Restricted Subsidiaries
infringes in any Material respect any
license, permit, franchise, authorization,
patent, copyright, service mark,
trademark, trade name or other right owned
by any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the
Company or any of its Restricted
Subsidiaries with respect to any patent,
copyright, service mark, trademark,
trade name or other right owned or used by
the Company or any of its 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 could not reasonably be expected to
result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate
has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code
relating to employee benefit plans (as
defined in section 3 of ERISA), and no
event, transaction or condition has
occurred or exists that could reasonably be
expected to result in the incurrence of any
such liability by the Company or any
ERISA Affiliate, or in the imposition of
any Lien on any of the rights,
properties or assets of the Company or any
ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to
such penalty or excise tax provisions
or to section 401(a)(29) or 412 of the
Code, other than such liabilities or
Liens as would not be individually or in
the aggregate Material.
(b) The present value of the aggregate benefit liabilities under
each
of the Plans (other than Multiemployer
Plans), determined as of the end of such
Plan's most recently ended plan year on the
basis of the actuarial assumptions
specified for funding purposes in such
Plan's most recent actuarial valuation
report, did not exceed the aggregate
current value of the assets of such Plan
allocable to such benefit liabilities. The
term "benefit liabilities" has the
meaning specified in section 4001 of ERISA
and the terms "current value" and
"present value" have the meaning specified
in section 3 of ERISA.
14
<PAGE>
(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 in the first sentence of
this Section 5.12(e) is made in reliance
upon and subject to the accuracy of each
Purchaser's representation in Section
6.2 as to the sources of the funds to be
used to pay the purchase price of the
Notes to be purchased by such
Purchaser.
SECTION 5.13. PRIVATE OFFERING BY THE COMPANY. Neither the Company
nor
anyone acting on the Company's behalf has
offered the Notes or any similar
securities for sale to, or solicited any
offer to buy any of the same from, or
otherwise approached or negotiated in
respect thereof with, any Person other
than the Purchasers and not more than ten
(10) other Institutional Investors,
each of which has been offered the Notes 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 to
the registration requirements of Section 5
of the Securities Act.
SECTION 5.14. USE OF PROCEEDS; MARGIN REGULATIONS. The Company
will
apply the proceeds of the sale of the
Series C Notes, the Series D Notes and the
Series E Notes to pay a portion of the
purchase price for the acquisition of the
stock described in Section 4.6, and will
hold such proceeds in cash or cash
equivalent investments until the
consummation of such closing. The Company will
not amend the Acquisition Agreement in any
manner materially adverse to the
Company or the holders of the Notes prior
to the consummation of the acquisition
thereunder without the consent of the
Required Holders(s). The Company will
apply the proceeds of the sale of any
Series of Shelf Notes as specified in the
Request for Purchase with respect to such
Series. 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 1% 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 1% 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. None of the proceeds of the
sale of any Notes will be used to finance a
Hostile Tender Offer.
15
<PAGE>
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 January 28, 2005,
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.
SECTION 5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC. Neither the
sale
of the Notes by the Company hereunder nor
its use of the proceeds thereof will
violate the Trading with the Enemy Act, as
amended, or any of the foreign assets
control regulations of the United States
Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling
legislation or executive order
relating thereto, or is in violation of any
federal statute or Presidential
Executive Order, including without
limitation Executive Order 13224 66 Fed. Reg.
49079 (September 25, 2001) (Blocking
Property and Prohibiting Transactions with
Persons who Commit, Threaten to Commit or
Support Terrorism), or The USA Patriot
Act.
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. Neither the Company nor
any
Restricted Subsidiary has knowledge of any
claim or has received any notice of
any claim, and no proceeding has been
instituted raising any claim against the
Company or any of its Restricted
Subsidiaries or any of their respective real
properties now or formerly owned, leased or
operated by any of them, or other
assets, alleging damage to the environment
or any violation of any Environmental
Laws, except, in each case, such as could
not reasonably be expected to result
in a Material Adverse Effect. Except as
otherwise disclosed to each Purchaser in
writing:
(a) neither the Company nor any Restricted Subsidiary has knowledge
of
any facts which would give rise to any
claim, public or private, for violation
of Environmental Laws or damage to the
environment emanating from, occurring on
or in any way related to real properties or
to other assets now or formerly
owned, leased or operated by any of them or
their use, except, in each case,
such as could not reasonably be expected to
result in a Material Adverse Effect;
16
<PAGE>
(b) neither the Company nor any of its Restricted Subsidiaries
has
stored any Hazardous Materials on real
properties now or formerly owned, leased
or operated by any of them or has disposed
of any Hazardous Materials in each
case in a manner contrary to any
Environmental Laws and in any manner that could
reasonably be expected to result in a
Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated
by the Company or any of its Restricted
Subsidiaries are in compliance with
applicable Environmental Laws, except where
failure to comply could not
reasonably be expected to result in a
Material Adverse Effect.
SECTION 5.19. NOTES RANK PARI PASSU. 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 hereto.
SECTION 5.20. SHARE REPURCHASE OBLIGATIONS. Neither the Company nor
any
Subsidiary is a party to any agreement
requiring it to, or is otherwise
obligated to, repurchase any shares of the
Company's capital stock issued in
connection with the acquisition described
in Section 4.6.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
SECTION 6.1. PURCHASE FOR INVESTMENT. Each Purchaser represents
that it
is an institutional "accredited investor,"
as such term is defined in Regulation
D under the Securities Act of 1933, as
amended, and 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, provided that the
disposition of such Purchaser's or such
pension or trust funds' property shall at
all times be within such Purchaser's
or such pension or trust funds' control.
Each Purchaser understands that the
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. SOURCE OF FUNDS. Each Purchaser represents that at
least
one of the following statements is an
accurate representation as to each source
of funds (a "SOURCE") to be used by it to
pay the purchase price of the Notes to
be purchased by it hereunder:
(a) the Source is an "insurance company general account" within
the
meaning of Department of Labor Prohibited
Transaction Exemption ("PTE") 95-60
(issued July 12, 1995) and there is no
employee benefit plan, treating as a
single plan all plans maintained by the
same employer or employee organization,
with respect to which the amount of the
general account reserves and liabilities
for all contracts held by or on behalf of
such plan, exceeds ten percent (10%)
of the total reserves and liabilities of
such general account (exclusive of
separate account liabilities) plus surplus,
as set forth in the NAIC Annual
Statement for such Purchaser most recently
filed with such Purchaser's state of
domicile; or
17
<PAGE>
(b) the Source is either (i) an insurance company pooled
separate
account, within the meaning of PTE 90-1
(issued January 29, 1990), or (ii) a
bank collective investment fund, within the
meaning of the PTE 91-38 (issued
July 12, 1991) and, except as such
Purchaser prior to the execution and delivery
of this Agreement has disclosed to the
Company in writing pursuant to this
paragraph (b), no employee benefit plan or
group of plans maintained by the same
employer or employee organization
beneficially owns more than 10% of all assets
allocated to such pooled separate account
or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within
the
meaning of Part V of the QPAM Exemption)
managed by a "qualified professional
asset manager" or "QPAM" (within the
meaning of Part V of the QPAM Exemption),
no employee benefit plan's assets that are
included in such investment fund,
when combined with the assets of all other
employee benefit plans established or
maintained by the same employer or by an
affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee
organization and managed by such QPAM,
exceed 20% of the total client assets
managed by such QPAM, the conditions of
Part I(c) and (g) of the QPAM Exemption
are satisfied, neither the QPAM nor a
person controlling or controlled by the
QPAM (applying the definition of "control"
in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in
the Company and (i) the identity of
such QPAM and (ii) the names of all
employee benefit plans whose assets are
included in such investment fund have been
disclosed to the Company in writing
pursuant to this paragraph (c) prior to the
execution and delivery of this
Agreement; or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate
account or trust fund comprised of one or
more employee benefit plans, each of
which prior to the execution and delivery
of this Agreement has been identified
to the Company in writing pursuant to this
paragraph (e); or
(f) the Source does not include assets of any employee benefit
plan,
other than a plan exempt from the coverage
of ERISA; or
(g) the Source is an insurance company separate account
maintained
solely in connection with the fixed
contractual obligations of the insurance
company under which the amounts payable, or
credited, to any employee benefit
plan (or its related trust) and to any
participant or beneficiary of such plan
(including any annuitant) are not affected
in any manner by the investment
performance of the separate account.
If any Purchaser or any subsequent transferee of the Notes
indicates
that such Purchaser or such transferee is
relying on any representation
contained in paragraph (b), (c) or (e)
above, the Company shall deliver on the
date of issuance of such Notes and on the
date of any applicable transfer a
certificate, which shall either state that
(i) it is neither a party in interest
nor a "disqualified person" (as defined in
Section 4975(e)(2) of the Code), with
respect to any plan identified pursuant to
paragraphs (b) or (e) above, or (ii)
with respect to any plan, identified
pursuant to paragraph (c) above, neither it
nor any "affiliate" (as defined in Section
V(c) of the QPAM Exemption) has at
such time, and during the immediately
preceding one year, exercised the
authority to appoint or terminate said QPAM
as manager of any plan identified in
writing
18
<PAGE>
pursuant to paragraph (c) above or to
negotiate the terms of said QPAM's
management agreement on behalf of any such
identified plan. As used in this
Section 6.2, the terms "employee benefit
plan", "governmental plan", "party in
interest" and "separate account" shall have
the respective meanings assigned to
such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO COMPANY.
SECTION 7.1. FINANCIAL AND BUSINESS INFORMATION. The Company
shall
deliver to Prudential and 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), duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second and
third
quarters) for the portion of the fiscal year ending with such
quarter,
setting forth in each case in comparative form the figures for
the
corresponding periods in the previous fiscal year, all in
reasonable
detail, prepared in accordance with GAAP applicable to
quarterly
financial statements generally, and certified by a Senior
Financial
Officer as fairly presenting, in all material respects, the
financial
position of the companies being reported on and their results
of
operations and cash flows, subject to changes resulting from
year-end
adjustments, provided that delivery within the time period
specified
above of copies of the Company's Quarterly Report on Form 10-Q
prepared
in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy
the
requirements of this Section 7.1(a);
(b) Annual Statements -- within 105 days after the end of each
fiscal
year of the Company, duplicate copies
of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year, setting forth in each case in
comparative
form the figures for the previous fiscal year, all in
reasonable
detail, prepared in accordance with GAAP, and accompanied by an
opinion
thereon of independent certified public accountants of
recognized
national standing, which opinion shall state that such
financial
statements present fairly, in all material respects, the
financial
position of the companies being reported upon and their results
of
operations and cash flows and have been prepared in conformity
with
GAAP, and that the examination of such accountants in connection
with
such financial statements has been made in accordance with
generally
accepted auditing standards, and that such audit provides a
reasonable
basis for such opinion in the circumstances, provided that the
delivery
within the time period specified above of the Company's Annual
Report
on
19
<PAGE>
Form 10-K for such fiscal year (together with the Company's
annual
report to shareholders, if any, prepared pursuant to Rule 14a-3
under
the Exchange Act) prepared in accordance with the requirements
therefor
and filed with the Securities and Exchange Commission shall be
deemed
to satisfy the requirements of this Section 7.1(b);
(c) SEC and
Other Reports -- promptly upon their becoming available,
one copy of (i) each financial statement,
report, notice or proxy statement sent
by the Company or any Subsidiary to public
securities holders generally, and
(ii) each regular or periodic report, each
registration statement (without
exhibits except as expressly requested by
such holder), and each prospectus and
all amendments thereto filed by the Company
or any Subsidiary with the
Securities and Exchange Commission 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 Section
11(f), a written notice specifying
the nature and period of existence thereof
and what action the Company is taking
or proposes to take with respect
thereto;
(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:
(i) with respect to any Plan, any reportable event, as defined
in Section 4043(c) of ERISA and the regulations thereunder, for
which
notice thereof has not been waived pursuant to such regulations as
in
effect on
the date thereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings
under
Section 4042 of ERISA for the termination of, or the appointment of
a
trustee to administer, any Plan, or the receipt by the Company or
any
ERISA Affiliate of a notice from a Multiemployer Plan that such
action
has been taken by the PBGC with respect to such Multiemployer Plan;
or
(iii) 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, could reasonably be expected to have a
Material
Adverse Effect;
20
<PAGE>
(f) Notices from Governmental Authority -- promptly, and in any
event
within 30 days of receipt thereof, copies
of any notice to the Company or any
Subsidiary from any federal or state
Governmental Authority relating to any
order, ruling, statute or other law or
regulation that could reasonably be
expected to have a Material Adverse Effect;
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 to
perform its obligations hereunder and
under the Notes as from time to time may be
reasonably requested by any such
holder of Notes.
Notwithstanding the foregoing, in the event that one or more
Unrestricted Subsidiaries shall either (i)
own more than 10% of the total
consolidated 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, determined in each case in
accordance with GAAP, then, within the
respective periods provided in Section
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 to
reconcile the financial statements of
such group of Unrestricted Subsidiaries to
the financial statements delivered
pursuant to Sections 7.1(a) and (b).
SECTION 7.2. OFFICER'S CERTIFICATE. Each set of financial
statements
delivered to a holder of Notes pursuant to
Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a
certificate of a Senior Financial Officer
setting forth:
(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 hereof,
inclusive, during the quarterly or annual
period covered by the statements then
being furnished (including with respect to
each such Section, where applicable,
the calculations of the maximum or minimum
amount, ratio or percentage, as the
case may be, permissible under the terms of
such Sections, and the calculation
of the amount, ratio or percentage then in
existence); 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.
21
<PAGE>
SECTION 7.3. INSPECTION. The Company shall permit the
representatives
of Prudential and 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 during normal
business hours and as often as may be
reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists, at
the
expense of the Company, to visit and
inspect any of the offices or properties of
the Company or any Restricted Subsidiary,
to examine all their respective books
of account, records, reports and other
papers, to make copies and extracts
therefrom, and to discuss their respective
affairs, finances and accounts with
their respective officers and independent
public accountants (and by this
provision the Company authorizes said
accountants to discuss the affairs,
finances and accounts of the Company and
its Subsidiaries), all at such times
and as often as may be requested.
SECTION 8. PAYMENT OF THE NOTES.
SECTION 8.1. REQUIRED PREPAYMENTS.
SECTION 8.1(1). NO REQUIRED PREPAYMENTS OF SERIES C NOTES, SERIES
D
NOTES OR SERIES E NOTES. The Series C
Notes, the Series D Notes and the Series E
Notes shall be subject to prepayment only
with respect to the optional
prepayments permitted by Section 8.2.
SECTION 8.1(2). REQUIRED PREPAYMENTS OF SHELF NOTES. Each Series
of
Notes shall be subject to required
prepayments, if any, set forth in the Notes
of such Series (provided that upon any
purchase of any Series of Shelf Notes
pursuant to Section 8.5 or 8.7 the
principal amount of each required prepayment
of such Series of Shelf Notes becoming due
under this Section 8.1(2) on and
after the date of such purchase shall be
reduced in the same proportion as the
aggregate unpaid principal amount of such
Series of Shelf Notes is reduced as
the result of such purchase).
SECTION 8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT. The
Company
may, at its option, upon notice as provided
below, prepay at any time all, or
from time to time any part of, the Notes of
any Series, in an amount not less
than $2,000,000 in the aggregate principal
amount of the Notes of such Series
then outstanding in the case of a partial
prepayment, at 100% of the principal
amount so prepaid, together with interest
accrued thereon to the date of such
prepayment, plus the Make-Whole Amount
determined for the prepayment date with
respect to such principal amount of each
Note then outstanding. The Company will
give each holder of Notes to be prepaid
written notice of each optional
prepayment under this Section 8.2 not less
than 30 days and not more than 60
days prior to the date fixed for such
prepayment. Each such notice shall specify
such date, the aggregate principal amount
of the Notes to be prepaid on such
date, the principal amount of each Note of
such Series held by such holder to be
prepaid (determined in accordance with
Section 8.3), and the interest to be paid
on the prepayment date
22
<PAGE>
with respect to such principal amount being
prepaid, and shall be accompanied by
a certificate of a Senior Financial Officer
as to the estimated respective
Make-Whole Amount due in connection with
such prepayment (calculated as if the
date of such notice were the date of the
prepayment), setting forth the details
of such computation. Two Business Days
prior to such prepayment, the Company
shall deliver to each holder of Notes to be
prepaid a certificate of a Senior
Financial Officer specifying the
calculation of each such Make-Whole Amount as
of the specified prepayment date. Any
partial prepayment of Notes of any Series
pursuant to this Section 8.2 shall be
applied in satisfaction of any required
payments of principal thereof (including
the required payment of principal of
principal due upon the maturity thereof)
under Section 8.1 hereof in inverse
order of their scheduled due dates.
SECTION 8.3. ALLOCATION OF PARTIAL PREPAYMENTS. In the case of
each
partial prepayment of the Notes of any
Series pursuant to the provisions of
Section 8.2, the principal amount of the
Notes to be prepaid shall be allocated
among all of the Notes of such Series at
the time outstanding in proportion, as
nearly as practicable, to the respective
unpaid principal amounts thereof.
SECTION 8.4. MATURITY; SURRENDER, ETC. In the case of each
prepayment
of Notes pursuant to this Section 8, the
principal amount of each Note to be
prepaid shall mature and become due and
payable on the date fixed for such
prepayment, together with interest on such
principal amount accrued to such date
and the applicable Make-Whole Amount, if
any. From and after such date, unless
the Company shall fail to pay such
principal amount when so due and payable,
together with the interest and Make-Whole
Amount, if any, as aforesaid, interest
on such principal amount shall cease to
accrue. Any Note paid or prepaid in full
shall be surrendered to 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
of any Series except (a) upon the
payment or prepayment of the Notes of such
Series in accordance with the terms
of this Agreement and the Notes or (b)
pursuant to a written offer to purchase
any outstanding Notes of such Series made
by the Company or an Affiliate pro
rata to the holders of the Notes of such
Series upon the same terms and
conditions. 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. MAKE-WHOLE AMOUNT. The term "MAKE-WHOLE AMOUNT" means
with
respect to a 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 the
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 a Note, the principal of
the
Note that is to be prepaid pursuant to
Section 8.2 or has become or is declared
to be immediately due and payable pursuant
to Section 12.1, as the context
requires.
23
<PAGE>
"DISCOUNTED V
