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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 4, 1998
SCHUFF STEEL COMPANY
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 000-22715 86-0318760
- ---------------------------- ------------- -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
420 SOUTH 19TH AVENUE, PHOENIX, ARIZONA 85009
---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (602) 252-7787
Not Applicable
- --------------------------------------------------------------
(Former name or former address, if changed since last report.)
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This Current Report on Form 8-K/A amends the Current Report on Form
8-K of Schuff Steel Company (the "Company") filed on June 17, 1998 (the
"Original Filing"). Item 7(c) and the Exhibit Index, which are set forth in
their entirety on page 3 and 5, respectively, are amended by adding reference to
Exhibits 2.2 and 2.3, and by adding revised descriptions to Exhibits 2.1 and
10.2. All exhibits listed in Item 7(c) and the Exhibit Index are hereby filed
with this Form 8-K/A. Any items in the Original Filing not expressly changed
hereby shall be as set forth in the Original Filing.
2
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
2.1 Stock Purchase Agreement dated as of May 12, 1998, by and among the
Company, E.C. Addison and The Addison Structural Services, Inc.
Leveraged Employee Stock Ownership Plan, and Addison Structural
Services, Inc. (1)
2.2 Amendment to Stock Purchase Agreement dated June 1, 1998, by and among the
Company, E.C. Addison and The Addison Structural Services, Inc.
Leveraged Employee Stock Ownership Plan, and Addison Structural
Services, Inc.
2.3 Amendment No. 2 to Stock Purchase Agreement dated June 4, 1998, by and
among the Company, E.C. Addison and The Addison Structural Services,
Inc. Leveraged Employee Stock Ownership Plan, and Addison Structural
Services, Inc.
10.1 Purchase Agreement, dated June 1, 1998, by and among the Company,
Donaldson, Lufkin & Jenrette Securities Corporation, Jefferies &
Company, Inc., and Friedman, Billings, Ramsey & Co., Inc.
10.2 Indenture dated June 4, 1998, by and between the Company and Harris Trust
Company of California, as Trustee.
10.3 Registration Rights Agreement, dated June 4, 1998, by and among the
Company, the Guarantors (as defined therein), Donaldson, Lufkin &
Jenrette Securities Corporation, Jefferies & Company, Inc., and
Friedman, Billings, Ramsey & Co., Inc.
23 Consent of Mauldin & Jenkins, LLC (regarding Form S-8 Registration
Statements).
99.1 Press Release dated June 4, 1998.
99.2 Press Release dated June 4, 1998.
</TABLE>
(1) Certain information in this exhibit has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a confidential
treatment request under Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SCHUFF STEEL COMPANY
Date: June 19, 1998 By:\s\ Kenneth F. Zylstra
---------------------------------------------
Vice President and Chief Financial Officer
(Principal Financial Officer and Duly Authorized
Officer)
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
2.1 Stock Purchase Agreement dated as of May 12, 1998, by and among the
Company, E.C. Addison and The Addison Structural Services Inc.
Leveraged Employee Stock Ownership Plan, and Addison Structural
Services, Inc. (1)
2.2 Amendment to Stock Purchase Agreement dated June 1, 1998, by and among the
Company, E.C. Addison and The Addison Structural Services, Inc.
Leveraged Employee Stock Ownership Plan, and Addison Structural
Services, Inc.
2.3 Amendment No. 2 to Stock Purchase Agreement dated June 4, 1998, by and
among the Company, E.C. Addison and The Addison Structural Services,
Inc. Leveraged Employee Stock Ownership Plan, and Addison Structural
Services, Inc.
10.1 Purchase Agreement, dated June 1, 1998, by and among the Company,
Donaldson, Lufkin & Jenrette Securities Corporation, Jefferies &
Company, Inc., and Friedman, Billings, Ramsey & Co., Inc.
10.2 Indenture dated June 4, 1998, by and between the Company and Harris Trust
Company of California, as Trustee.
10.3 Registration Rights Agreement, dated June 4, 1998, by and among the
Company, the Guarantors (as defined therein), Donaldson, Lufkin &
Jenrette Securities Corporation, Jefferies & Company, Inc., and
Friedman, Billings, Ramsey & Co., Inc.
23 Consent of Mauldin & Jenkins, LLC (regarding Form S-8 Registration
Statements).
99.1 Press Release dated June 4, 1998.
99.2 Press Release dated June 4, 1998.
</TABLE>
(1) Certain information in this exhibit has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a confidential
treatment request under Rule 24b-2 of the Securities and Exchange Act of
1934, as amended.
5
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THIS EXHIBIT CONTAINS CONFIDENTIAL INFORMATION WHICH HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST UNDER RULE 24b-2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED. THE CONFIDENTIAL INFORMATION ON PAGES 48 AND 50 HAVE
BEEN REPLACED WITH ASTERISKS.
Exhibit 2.1
STOCK PURCHASE AGREEMENT
by and among
E.C. Addison and The Addison Structural Services, Inc.
Leveraged Employee Stock Ownership Plan
as "Sellers,"
Schuff Steel Company
as "Buyer,"
and
Addison Structural Services, Inc.
as the "Company"
as of May 12, 1998
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS..................................................... 1
1.1 Defined Terms. .................................................... 1
1.2 Other Defined Terms................................................ 5
ARTICLE II SALE AND TRANSFER OF SHARES.................................... 7
2.1 Transfer of Shares. ............................................... 7
2.2 Purchase Price..................................................... 7
2.3 Holdback Note and Escrows.......................................... 8
2.4 Purchase Price Adjustments......................................... 9
2.5 Transfer Taxes and Fees............................................ 11
ARTICLE III CLOSING....................................................... 11
3.1 Closing. .......................................................... 11
3.2 Conveyances at Closing............................................. 12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
SELLERS AND THE COMPANY................................... 13
4.1 Organization of the Company. ...................................... 13
4.2 Subsidiaries. .................................................... 13
4.3 Authorization...................................................... 14
4.4 No Violation; Consents............................................. 14
4.5 Capitalization..................................................... 15
4.6 Financial Statements. ............................................. 15
4.7 No Change in the Assets............................................ 16
4.8 Liabilities........................................................ 16
4.9 Assets; Absence of Encumbrances.................................... 17
4.10 Real Property...................................................... 17
4.11 Receivables........................................................ 18
4.12 Inventory and Equipment. .......................................... 19
4.13 Contracts and Commitments.......................................... 19
4.14 Books and Records.................................................. 20
4.15 Litigation. ....................................................... 20
4.16 Labor Matters. .................................................... 21
4.17 Compliance with Law. .............................................. 21
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TABLE OF CONTENTS CONTINUED
PAGE
4.18 No Brokers. ....................................................... 21
4.19 No Other Agreements to Sell the Company. .......................... 22
4.20 Proprietary Rights................................................. 22
4.21 Tax Matters........................................................ 23
4.22 Employees and Employee Benefits.................................... 25
4.23 ERISA Representations.............................................. 27
4.24 Compliance With Environmental Laws................................. 29
4.25 Insurance.......................................................... 33
4.26 Affiliate Transactions............................................. 34
4.27 Disclosure......................................................... 34
4.28 Confidential Memorandum............................................ 34
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER......................... 35
5.1 Representations and Warranties of Buyer. .......................... 35
ARTICLE VI GENERAL COVENANTS OF BUYER, THE COMPANY AND SELLERS............ 36
6.1 Further Assurances................................................. 36
6.2 ESOP. ............................................................. 36
6.3 Environmental Assessments and Remediation.......................... 36
ARTICLE VII CONDUCT OF COMPANY AND BUYER PENDING THE CLOSING.............. 37
7.1 Company and Seller Covenants....................................... 37
7.2 Certain Closing Covenants.......................................... 39
7.3 No Negotiations.................................................... 39
7.4 Public Announcements............................................... 39
7.5 Confidentiality.................................................... 40
ARTICLE VIII CONDITIONS TO SELLERS' OBLIGATIONS........................... 40
8.1 Representations, Warranties and Covenants.......................... 40
8.2 No Proceedings, Litigation or Laws................................. 40
8.3 Certificates....................................................... 40
8.4 Ancillary Agreements. ............................................. 40
8.5 Opinion Letter of Buyer's Attorneys. ............................. 41
8.6 Buyer Corporate Documents.......................................... 41
ii
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TABLE OF CONTENTS CONTINUED
PAGE
8.7 Environmental Agreement............................................ 42
ARTICLE IX CONDITIONS TO BUYER'S OBLIGATIONS.............................. 42
9.1 Representations, Warranties and Covenants.......................... 42
9.2 Consents. ......................................................... 42
9.3 No Proceedings or Litigation....................................... 42
9.4 Opinions of Counsel................................................ 42
9.5 Certificates. ..................................................... 44
9.6 Ancillary Agreements. ............................................. 45
9.7 Release of Encumbrances............................................ 45
9.8 No Material Changes. .............................................. 45
9.9 Corporate/Fiduciary Documents. .................................... 45
9.10 Environmental Agreement............................................ 45
9.11 Financing. ........................................................ 45
9.12 Financial Statement Deliveries..................................... 45
9.13 Chris-Mar, Inc..................................................... 45
9.14 Mahdavi Option..................................................... 46
9.15 Affiliate Loans.................................................... 46
9.16 Affiliate Transactions............................................. 46
9.17 Resignations....................................................... 46
9.18 Repayment of Indebtedness.......................................... 46
9.19 Real Property...................................................... 46
9.20 Spousal Release.................................................... 46
9.21 Escrow............................................................. 46
9.22 Sale of Non-Business Assets........................................ 46
ARTICLE X RISK OF LOSS; CONSENTS TO ASSIGNMENT............................ 47
10.1 Risk of Loss....................................................... 47
ARTICLE XI REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION................ 47
11.1 Survival of Representations, Etc. ................................. 47
11.2 Indemnification.................................................... 48
iii
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TABLE OF CONTENTS CONTINUED
PAGE
ARTICLE XII ACTIONS BY SELLERS AND BUYER AFTER THE CLOSING................ 50
12.1 Automobiles........................................................ 50
12.2 Pinewood Plantation................................................ 50
ARTICLE XIII MISCELLANEOUS................................................ 51
13.1 Termination........................................................ 51
13.2 In the Event of Termination........................................ 52
13.3 Cooperation and Records Retention.................................. 52
13.4 Assignment. ....................................................... 52
13.5 Notices. .......................................................... 52
13.6 Choice of Law. .................................................... 54
13.7 Entire Agreement; Amendments and Waivers........................... 54
13.8 Multiple Counterparts. ............................................ 54
13.9 Expenses. ......................................................... 55
13.10 Invalidity. ....................................................... 55
13.11 Titles. ........................................................... 55
13.12 Cumulative Remedies................................................ 55
13.13 Arbitration. ..................................................... 55
iv
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is entered into as of May 12, 1998 (the
"Agreement") by and among Schuff Steel Company, a Delaware corporation
("Buyer"), E. C. Addison and The Addison Structural Services, Inc. Leveraged
Employee Stock Ownership Plan (each a "Seller" and collectively, the "Sellers")
and Addison Structural Services, Inc., a Florida corporation (the "Company").
RECITALS
A. The Company is engaged in the businesses of steel fabrication
and joist manufacturing.
B. Sellers own of record and beneficially all of the issued and
outstanding shares of capital stock of the Company (the "Shares").
C. Buyer desires to purchase from Sellers, and Sellers desire to
sell to Buyer, all of the Shares upon the terms and subject to the conditions of
this Agreement, whereupon Buyer will own all of the capital stock in the
Company. As a result of such purchase, Buyer will acquire indirect ownership of
the assets of the Company held by it at the Closing Date, including all of the
Company's operating subsidiaries, Addison Steel, Inc. and Quincy Joist Company
(each a "Subsidiary" and collectively the "Subsidiaries").
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. As used herein, the terms below shall have the
following meanings. Any of such terms, unless the context otherwise requires,
may be used in the singular or plural, depending upon the reference.
1.1.1 "Mr. Addison" shall mean E. C. Addison.
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1.1.2 "Affiliate" of any specified person means any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person. For purposes of this
definition, "control," when used with respect to a specified person, means the
power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.
1.1.3 "Agreement" shall have the meaning specified in the
first paragraph of this Agreement and shall include the Environmental Agreement.
1.1.4 "Ancillary Agreements" shall mean the Employment and
Noncompetition Agreements of Glen Davis, Sam Mahdavi and Mike Phagans in the
forms of Exhibits A, B and C hereto, the Consulting and Noncompetition Agreement
of Mr. Addison in the form of Exhibit D hereto, the ESOP Escrow Agreement in
substantially the form of Exhibit E hereto, and the Environmental Escrow
Agreement in substantially the form of Exhibit F hereto.
1.1.5 "Bullard Note" shall mean the Note in favor of the
Company relating to the sale of 2502 Redwood Ct., Unit 2, Albany, Georgia.
1.1.6 "Buyer" shall have the meaning specified in the first
paragraph of this Agreement.
1.1.7 "Code" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
1.1.8 "Commission" shall mean the Securities and Exchange
Commission.
1.1.9 "Company" shall have the meaning specified in the
first paragraph of this Agreement, and shall include its Subsidiaries, except
where the context requires otherwise or except where otherwise defined.
1.1.10 "Contract" shall mean any agreement, contract, note,
bond, mortgage, indenture, loan, evidence of indebtedness, lease, sublease,
purchase order, letter of credit, franchise arrangement, undertaking, covenant
not to compete, employment agreement, license, instrument, arrangement,
obligation or commitment to which the Company is a party or is bound or to which
its assets or properties are subject, whether oral or written.
1.1.11 "Encumbrance" shall mean any claim, lien, pledge,
charge, easement, security interest, deed of trust, mortgage, option, right of
first refusal, preemptive right, license right, right-of-way, patent
reservation, encroachment, building or use restriction, conditional sales
agreement or encumbrance, whether voluntarily incurred or arising by operation
of law, and
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includes, without limitation, any agreement to give any of the foregoing in the
future, and any contingent sale or other title retention agreement or lease in
the nature thereof.
1.1.12 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.1.13 "ESOP" shall mean the Addison Structural Services,
Inc. Leveraged Employee Stock Ownership Plan.
1.1.14 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder.
1.1.15 "Facilities" shall mean the buildings, offices,
maintenance and storage facilities, shops, plants, warehouses, improvements and
other structures, together with all related fixtures, located at or on the Real
Property.
1.1.16 "HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
1.1.17 "including" shall mean including without limitation
by reason of enumeration.
1.1.18 "Knowledge" as used in this Agreement in the phrase
"to the knowledge of the Company," or words of similar import, means the actual
knowledge, after having conducted a reasonable investigation, of E. Chris
Addison, Glen Davis, Sam Mahdavi, Mike Phagans, Dean Campbell and Larry LaRue.
1.1.19 "Leased Real Property" shall mean all real property
and improvements thereon leased, subleased or otherwise occupied under
assignment or subassignment of a lease by the Company, including all rights,
easements and privileges appertaining or relating thereto.
1.1.20 "Mahdavi Note" shall mean the Promissory Note, dated
March 31, 1994, by Majid Mahdavi-Nejad in favor of Quincy Joist Company, for
$80,000.
1.1.21 "Material Adverse Effect" or "Material Adverse
Change" shall mean any material adverse effect or change in the condition
(financial or other), business, results of operations, assets, liabilities,
operations or customer, supplier or employee relations of the Company or on the
ability of the Sellers or the Company to consummate the transactions
contemplated hereby, or any event, condition or state of facts which could be
reasonably
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expected, with the passage of time, to constitute a "Material Adverse Effect" or
"Material Adverse Change."
1.1.22 "Owned Real Property" shall mean all real property
and improvements thereon owned by the Company, including all rights, easements
and privileges appertaining or relating thereto.
1.1.23 "Permits" shall mean all licenses, permits,
franchises, approvals, notifications, authorizations, consents or orders of, or
filings (including, without limitation, periodic reports) with (including timely
renewals thereof), any governmental agency or authority, whether foreign,
federal, state or local, or any other person, necessary or desirable for the
conduct of, or relating to the operation of, the Company, its business or
assets.
1.1.24 "Permitted Liens" shall mean the following
encumbrances or restrictions: (i) subject to Section 4.10.5, zoning and
subdivision ordinances, (ii) easements, covenants, rights of way or other
restrictions which do not individually or in the aggregate materially adversely
affect the use or value of the property to which they relate or to the operation
of the business thereon; (iii) liens for taxes, assessments and other
governmental charges which are not due and payable or which may thereafter be
paid without penalty; and (iv) other imperfections of title or Encumbrances, if
any, none of which title imperfections or Encumbrances individually or in the
aggregate materially detract from the use or value of the property or the
operation of the business thereon.
1.1.25 "person" shall mean any natural person, corporation,
general or limited partnership, limited liability company, trust, sole
proprietorship, or other entity, organization or association of any kind.
1.1.26 "Real Property" shall mean the Leased Real Property
and Owned Real Property (as such terms are herein defined).
1.1.27 "Representative" shall mean any officer, director,
principal, partner, manager, member, attorney, agent, employee or other
representative.
1.1.28 "Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
1.1.29 "Sellers" shall have the meaning specified in the
first paragraph of this Agreement.
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1.1.30 "Shares" shall have the meaning specified in Recital
B.
1.1.31 "Smith Note" shall mean the Promissory Note, dated
March 16, 1990, by Jack S. Smith and Sue G. Smith in favor of Addison Steel,
Inc., for $76,500.
1.1.32 "Subsidiary" shall mean the companies identified in
Recital C, which are the only entities in which the Company owns a controlling
equity interest and, for purposes of Section 4.24, any entity in which the
Company has, directly or indirectly, owned a controlling equity interest.
1.1.33 "Tax or Taxes" shall mean any federal, state,
provincial, local, foreign, or other income, alternative minimum, accumulated
earnings, personal holding company, franchise, capital stock, net worth,
capital, profits, windfall profits, gross receipts, value added, privilege,
sales, use, goods and services, excise, customs duties, transfer, conveyance,
mortgage, registration, stamp, documentary, recording, premium, severance,
environmental (including taxes under Section 59A of the Code), real property,
personal property, transfer, escheat, ad valorem, intangibles, rent, occupancy,
license, occupational, employment, unemployment insurance, social security,
disability, workers' compensation, payroll, health care, registration,
withholding, estimated, or other similar tax, duty, or other governmental charge
or assessment or deficiencies thereof (including all interest and penalties
thereon and additions thereto, whether disputed or not).
1.1.34 "Tax Return" shall mean any return, report,
declaration, form, report, claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.
1.2 Other Defined Terms. The following terms shall have the
meanings ascribed to them in the Sections set forth below:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Purchase Price....................................................... 2.2.1
Holdback Note........................................................ 2.3(a)
Letter of Credit..................................................... 2.3(a)
Adjustment and Indemnity Fund........................................ 2.3(b)
Escrow Agent......................................................... 2.3(b)
ESOP Escrow.......................................................... 2.3(b)
ESOP Escrow Agreement................................................ 2.3(b)
Environmental Escrow ................................................ 2.3(c)
Environmental Escrow Agreement....................................... 2.3(c)
</TABLE>
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<TABLE>
<S> <C>
Closing Date Balance Sheet........................................... 2.4.1
GAAP................................................................. 2.4.1
Minimum Net Worth.................................................... 2.4.1
E&Y.................................................................. 2.4.2
E&Y Audit............................................................ 2.4.2
Adjusted Balance Sheet............................................... 2.4.2
Closing.............................................................. 3.1
Closing Date......................................................... 3.1
Financial Statements................................................. 4.6
Leases............................................................... 4.10.3
Quincy Expansion..................................................... 4.10.6
Action............................................................... 4.15
Proprietary Rights................................................... 4.20.1
Benefit Arrangement.................................................. 4.22.1
Employee Plans....................................................... 4.22.1
ERISA Affiliate...................................................... 4.22.1
Multiemployer Plan................................................... 4.22.1
PBGC................................................................. 4.22.1
Pension Plan......................................................... 4.22.1
Welfare Plan......................................................... 4.22.1
Release.............................................................. 4.24.3
Hazardous Substance.................................................. 4.24.4
CERCLA............................................................... 4.24.5
Environmental Laws................................................... 4.24.5
Environmental Conditions............................................. 4.24.13
Former Property...................................................... 4.24.20
Confidential Memorandum.............................................. 4.28
Environmental Agreement.............................................. 6.3
SEC.................................................................. 9.12
Mahdavi Option....................................................... 9.14
Damages.............................................................. 11.2.1
Claim................................................................ 11.2.4
Claim Notice......................................................... 11.2.4
Excluded Claims...................................................... 11.2.6
Plantation Assets.................................................... 12.2
</TABLE>
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ARTICLE II
SALE AND TRANSFER OF SHARES
2.1 Transfer of Shares. Upon the terms and subject to the
conditions contained herein, at the Closing, Sellers will sell, convey,
transfer, assign and deliver to Buyer, and Buyer will acquire from Sellers, the
Shares, free and clear of all Encumbrances, for the consideration specified in
Section 2.2.
2.2 Purchase Price.
2.2.1 Purchase Price. At the Closing, upon the terms and
subject to the conditions set forth herein, Buyer shall pay to Sellers in
consideration for and against delivery of the Shares, the sum of (i) $50.0
million, plus (ii) $400,000 (as an adjustment for inventory), plus (iii) the
amount of the Company's cash on hand at the Closing as shown on the Closing Date
Balance Sheet (before reduction for any cash payments in respect of the items
described in subsections (iv) and (v) below or any addition for the proceeds
from the sale of assets under Sections 12.1 and 12.2 hereof or from the sale of
the notes described in Section 9.22, less (iv) $2,000,000.00, the value assigned
to the Mahdavi Option, less (v) any fees paid by the Company for legal and
accounting fees, brokerage fees and other expenses relating to the transaction
contemplated by this Agreement, and less (vi) any amounts provided for as a
purchase price adjustment in Section 3.1 in the Environmental Agreement (the sum
of clauses (i) through (vi) is referred to herein as the "Purchase Price");
provided, however, that regardless of the actual level of cash on hand at the
Closing (as defined in Section 3.1), the sum of clauses (i) and (iii) shall not
be less than $56 million, nor more than $59 million, and provided, further, that
the Purchase Price shall be subject to reduction on a dollar for dollar basis
based upon any transfer of cash in violation of Section 7.1.1 hereof; and
provided, further, that the Purchase Price shall be increased by a charge equal
to seven percent (7%) per annum during the period from May 15, 1998 through the
Closing Date, provided that Sellers and the Company deliver a certificate to
Buyer acknowledging that they are prepared to satisfy all their conditions to
Closing as of such date; and provided further that, at the Closing, Buyer shall
remit directly from the Purchase Price amounts necessary to pay off all
long-term debt of the Company as of the Closing (including the current portion
thereof), including all debt of or related to the ESOP (which will reduce the
ESOP's cash portion of the Purchase Price).
2.2.2 Form of Consideration. The Purchase Price shall be
paid to Sellers in immediately available funds at the Closing, except for $6.842
million, which shall be paid to Sellers in the form of the Holdback Note and
pursuant to the ESOP Escrow and the Environmental Escrow, as described in
Section 2.3.
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2.2.3 Allocation. The Purchase Price and the adjustments
thereto shall (subject to Section 2.3) be allocated among the Sellers pro rata
in accordance with their respective ownership interests in the Company, as set
forth on Schedule 4.5.
2.3 Holdback Note and Escrows.
(a) Of the Purchase Price attributable to Mr. Addison,
$3,213,600 shall be in the form of a promissory note payable to Mr. Addison in
the form of Exhibit G hereto (the "Holdback Note"). The Holdback Note shall bear
interest at 1% below the floating prime rate of Bank One, Arizona, NA, or the
then principal lender of the Buyer if the same is not Bank One, Arizona, NA, and
shall be secured by Buyer with a letter of credit in form reasonably acceptable
to the parties and to be attached as Exhibit H hereto ("Letter of Credit"),
which Letter of Credit shall be renewed annually in the amount of the remaining
obligation under the Note. Blocking notices by Buyer with respect to the Letter
of Credit will be sent only in conjunction with notices of claims pursuant to
the ESOP Escrow Agreement. Disputes related to the delivery of notices of claims
and joint instructions pursuant to the Letter of Credit shall be resolved in
accordance with Section 13.13 hereof. The Holdback Note shall be due and payable
to Mr. Addison as follows: (i) on the first anniversary of the Closing, Buyer
shall make an initial principal payment to Mr. Addison in an amount equal to
$1,071,200, (ii) on the second anniversary of the Closing, Buyer shall make a
second principal payment to Mr. Addison in an amount equal to $1,071,200, and
(iii) on the third anniversary of the Closing, Buyer shall make a final
principal payment to Mr. Addison in an amount equal to $1,071,200, in each case
subject to any unresolved pending claims made by Buyer in accordance with
Article XI hereof, any claims under Article XI resolved in favor of Buyer, or
any Purchase Price adjustments under Article II in favor of Buyer. All accrued
and unpaid interest on the Holdback Note on amounts not subject to claims,
pending or resolved, shall be paid annually on each anniversary of the Closing.
Any amounts held back by Buyer but ultimately paid to Mr. Addison shall also
include interest through the date of payment.
(b) Of the Purchase Price attributable to the ESOP,
$2,886,400 ($2,786,400 of which shall secure the ESOP's share of any unresolved
pending claims of Buyer pursuant to Article II and Article XI hereof (the
"Adjustment and Indemnity Fund") and $100,000 of which shall be used exclusively
to cover the ESOP's expenses under this Agreement, the ESOP Escrow Agreement and
the Environmental Escrow Agreement), shall be deposited into an escrow account
(the "ESOP Escrow") pursuant to the terms of an escrow agreement in
substantially the form of Exhibit E hereto (the "ESOP Escrow Agreement") among
Buyer, the ESOP, and Bank One, Arizona, NA, or the principal lender of Buyer as
of the Closing if the same is not Bank One, Arizona, NA (the "Escrow Agent").
The funds comprising the Adjustment and Indemnity Fund held in the ESOP Escrow
shall secure Purchase Price adjustments and the indemnification obligations of
the ESOP pursuant to Article II and Article XI hereof and shall be distributed
to the
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ESOP as follows: (i) on the first anniversary of the Closing in an amount equal
to $928,800, (ii) on the second anniversary of the Closing in an amount equal to
$928,800, and (iii) on the third anniversary of the Closing in an amount equal
to the balance of the Adjustment and Indemnity Fund, in each case subject to any
Purchase Price adjustments under Article II hereof in favor of Buyer or claims
made by Buyer in accordance with Article XI hereof or resolved in favor of
Buyer. Earnings on the Adjustment and Indemnity Fund held in Escrow to secure
Purchase Price adjustments and indemnification obligations shall be disbursed to
the ESOP or Buyer in proportion to disbursements of the corpus of the ESOP
Escrow. Funds and earnings thereon held to secure expense obligations of the
ESOP shall be disbursed as provided in the ESOP Escrow Agreement. Following the
Closing, the Company and the ESOP shall share equally any and all costs and
expenses relating to the ESOP Escrow.
(c) Of the Purchase Price, $742,800 ($397,415.20
attributable to Mr. Addison and $344,584.80 attributable to the ESOP) or a
lesser amount if provided for pursuant to the Environmental Agreement shall be
deposited into an escrow account (the "Environmental Escrow") pursuant to an
escrow agreement substantially in the form of Exhibit F hereto (the
"Environmental Escrow Agreement") among the Buyer, Mr. Addison, the ESOP, and
Escrow Agent. The funds held in the Environmental Escrow are to secure the
obligations of Mr. Addison and the ESOP for environmental expenses pursuant to
the Environmental Agreement and shall be disbursed in accordance with the
Environmental Escrow Agreement.
2.4 Purchase Price Adjustments.
2.4.1 Closing Date Balance Sheet; Initial Adjustment.
Sellers shall deliver to Buyer at least five days prior to Closing an estimated
balance sheet as of the Closing Date (the "Closing Date Balance Sheet"). The
Closing Date Balance Sheet shall be prepared in good faith and in accordance
with generally accepted accounting principles ("GAAP"), applied on a basis
consistent with the Financial Statements (as defined in Section 4.6). As of the
Closing Date, the Company shall have a net worth of not less than $30.5 million
(the "Minimum Net Worth"), as shown on the Closing Date Balance Sheet, with cash
as determined in Section 2.4.4 (without regard to the $6 million minimum and $9
million maximum referenced therein). In the event that the Company's net worth
as shown on the Closing Date Balance Sheet is less than the Minimum Net Worth,
there shall be a dollar-for-dollar reduction to the Purchase Price.
2.4.2 E&Y Audit. Within 90 days after the Closing, Buyer
will cause Ernst & Young LLP ("E&Y") to review or audit the Company's Closing
Date Balance Sheet (the "E&Y Audit") to verify the Minimum Net Worth. The
Company shall assist E&Y in its audit procedures, which may include pre-Closing
assistance, such as inventory observation. E&Y shall make only such adjustments,
if any, to the Closing Date Balance Sheet as are necessary to correct
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mathematical errors or in the judgment of E&Y to conform the Closing Date
Balance Sheet to GAAP, applied on a basis consistent with the Financial
Statements (as defined in Section 4.6) (the "Adjusted Balance Sheet"). Buyer
will promptly deliver to Sellers the Adjusted Balance Sheet, and the Sellers
will have the opportunity to engage Mauldin & Jenkins, LLC, or such other
reputable and independent accounting firm as they may select, to examine the
work papers, schedules and other documents prepared by E&Y. The Adjusted Balance
Sheet will become final and binding on the parties unless within 20 business
days following delivery thereof to Sellers, the Sellers notify Buyer in writing
that the Sellers object thereto, which objection shall be solely on the basis of
mathematical errors in the calculation thereof or the failure to present the
Company's financial position on a GAAP basis, applied on a basis consistent with
Financial Statements. If the Sellers object to the Adjusted Balance Sheet, and
after good faith consultation with respect to the objection the parties are
unable to reach an agreement within 15 days, any unresolved disputed items shall
be promptly referred to an independent accounting firm acceptable to the parties
to resolve the disputed issues. The resolution of the independent accounting
firm will be final and binding on the parties. The fees and expenses of such
independent accounting firm will be borne equally by Buyer and the Sellers. Any
payment due shall be paid by the appropriate party within two business days of
final determination hereunder (including, in the case of the ESOP, through the
ESOP Escrow). Any required adjustment to the Holdback Note shall be deemed to be
made as of the date of resolution of any adjustment and, at Buyer's request, Mr.
Addison shall return the Holdback Note in exchange for a new note reflecting the
adjustment.
2.4.3 Final Adjustment. In the event the actual net worth
of the Company, as set forth on the Adjusted Balance Sheet, is less than the
Minimum Net Worth, there shall be a dollar for dollar reduction (less any
difference already deducted under Section 2.4.1) in the Holdback Note and a
disbursement from the ESOP Escrow to Buyer in accordance with the respective
ownership interests of the Sellers. If the difference between the Minimum Net
Worth and the actual net worth of the Company as shown on the Adjusted Balance
Sheet is less than the difference between the Minimum Net Worth and the net
worth reflected on the Closing Date Balance Sheet, Buyer will pay to Sellers, on
a dollar for dollar basis, the difference between the estimated shortfall in net
worth as determined by the Closing Date Balance Sheet and the actual shortfall
in net worth as determined by the Adjusted Balance Sheet. Any payment due shall
be paid by the appropriate party within two business days of final determination
hereunder (including, in the case of the ESOP, through the ESOP Escrow). Any
required adjustment to the Holdback Note shall be deemed to be made as of the
date of resolution of any adjustment and, at Buyer's request, Mr. Addison shall
return the Holdback Note in exchange for a new note reflecting the adjustment.
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2.4.4 Cash. The Closing Date Balance Sheet shall include a
line item for cash which shall be used to calculate the amount of the Company's
cash on hand pursuant to Section 2.2.1. In conjunction with the E&Y Audit, E&Y
shall confirm cash as of the Closing Date. In the event of any shortfall between
the cash reflected on the Closing Date Balance Sheet and the cash reflected on
the Adjusted Balance Sheet, there shall be a dollar for dollar reduction in the
Holdback Note and a disbursement from the ESOP Escrow to Buyer in accordance
with the respective ownership interests of the Sellers. If the actual cash of
the Company as shown on the Adjusted Balance Sheet is greater than the cash
reflected on the Closing Date Balance Sheet, Buyer shall pay to the Sellers the
difference in cash within two business days after the final determination
hereunder. For purposes of this Section 2.4.4, regardless of the actual amount
of cash on hand of the Company at Closing, for purposes of determining any
adjustments to the Purchase Price, the amount of cash on hand of the Company at
Closing shall be deemed to be no less than $6 million and not greater than $9
million as more fully provided in Section 2.2.1. The E&Y Audit with respect to
the cash adjustment provisions hereof shall be subject to the same procedures as
Section 2.4.2 above. For purposes hereof, cash shall mean cash and cash
equivalents, as determined in accordance with GAAP applied on a consistent basis
with the Financial Statements, before any payment (i) received in connection
with the assets to be sold to the Sellers pursuant to Sections 12.1 and 12.2
hereof, (ii) made by the Company in respect of the Mahdavi Option, (iii) made by
the Company for legal and accounting fees, brokerage fees, and any other
expenses (except those referenced in Section 2.5 below) relating to the
transactions contemplated hereby; and (iv) received in consideration for the
sale of the notes described in Section 9.22 hereof. Any payment due shall be
paid by the appropriate party within two business days of final determination
hereunder (including, in the case of the ESOP, through the ESOP Escrow). Any
required adjustment to the Holdback Note shall be deemed to be made as of the
date of resolution of any adjustment and, at Buyer's request, Mr. Addison shall
return the Holdback Note in exchange for a new note reflecting the adjustment.
2.5 Transfer Taxes and Fees. The parties contemplate that no
documentary or transfer taxes or sales, use, transaction privilege or other
similar taxes will be imposed by reason of the transfer of Shares provided
hereunder. If any such tax is imposed, however, Sellers shall bear the
responsibility for such tax. Company shall pay the fees and costs of recording
or filing all UCC termination statements and other releases of Encumbrances, and
any fees or costs in obtaining any necessary consents, which shall reduce cash
at Closing for purposes of this Article II.
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ARTICLE III
CLOSING
3.1 Closing. The Closing of the transactions contemplated herein
(the "Closing") shall be held at the offices of King & Spalding, 191 Peachtree
Street, Atlanta, Georgia on June 4, 1998 or at a time and place as the parties
shall mutually agree (the "Closing Date").
3.2 Conveyances at Closing.
3.2.1 Sellers' Delivery Obligations. To effect the sale and
transfer of the Shares, Sellers will, at the Closing, execute (or cause to be
executed by any other party thereto other than Buyer) and deliver to Buyer:
3.2.1.1 certificates evidencing the Shares, free and
clear of any Encumbrances, duly endorsed in blank for transfer or accompanied by
stock powers duly executed in blank;
3.2.1.2 all Ancillary Agreements, including those
required to be executed by any of the Sellers;
3.2.1.3 all certificates, opinions of counsel and
other documents described in Article IX; and
3.2.1.4 all Permits and any other third party
consents required for the valid transfer of the Shares as contemplated by this
Agreement, or for the continued operation of the business of the Company
following such transfer.
3.2.2 Buyer's Delivery Obligations. To effect the sale and
transfer referred to in Section 2.1 hereof, Buyer will, at the Closing, execute
and deliver to Sellers:
3.2.2.1 the Purchase Price, including the Holdback
Note, Letter of Credit and Escrow;
3.2.2.2 all Ancillary Agreements required to be
executed by Buyer; and
3.2.2.3 all certificates, opinions of counsel and
other documents described in Article VIII.
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3.2.3 Form of Instruments. To the extent that a form of any
document to be delivered hereunder is not attached as an Exhibit hereto, such
documents shall be in form and substance, and shall be executed and delivered in
a manner, reasonably satisfactory to the recipient.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY
Sellers and the Company hereby, jointly and severally, represent and
warrant to Buyer as follows, which representations and warranties are, as of the
date hereof, true and correct:
4.1 Organization of the Company. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida. Copies of the Articles of Incorporation and Bylaws of the Company, and
all amendments thereto, heretofore delivered to Buyer are accurate and complete
as of the date hereof and are currently in effect without further amendment
thereto, except as set forth therein. The Company is duly qualified or licensed
to do business as a foreign corporation in good standing in the States of
Florida and Georgia, which are the only jurisdictions in which ownership of
property, the employment of personnel or the conduct of its business requires
such qualification, except where the failure to be so qualified or licensed
would not have a Material Adverse Effect on the Company.
4.2 Subsidiaries.
4.2.1 List of Subsidiaries. Schedule 4.2 sets forth a
complete and accurate list of all Subsidiaries. Except as set forth on Schedule
4.2, all of the Subsidiaries directly or indirectly, wholly-owned by the
Company, free and clear of all Encumbrances. Schedule 4.2 also sets forth the
jurisdiction of incorporation of each of the Subsidiaries, each jurisdiction in
which each such Subsidiary is qualified or licensed to do business, the number
of shares of capital stock of such Subsidiary outstanding, and the ownership
thereof.
4.2.2. Capital Stock. Except as set forth on Schedule 4.2,
there are no outstanding (i) securities convertible into or exchangeable or
exercisable for any Subsidiary's capital stock; (ii) options, warrants, calls or
other rights with respect to the issued capital stock of any Subsidiary; (iii)
contracts, commitments, agreements, understandings or arrangements of any kind
relating to the issuance, sale, transfer, or assignment of any capital stock,
convertible or exchangeable securities or options, warrants or rights of any
Subsidiary; or (iv) voting trust agreements or other contracts, agreements,
arrangements, commitments, plans, proxies or understanding restricting or
otherwise relating to conveyance, voting or dividend rights with respect to such
capital stock.
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4.2.3 Due Incorporation. Each Subsidiary has been duly
incorporated and is validly existing and in good standing under the laws of the
state of its incorporation and is duly licensed or qualified to do business and
in good standing in each state in which, the ownership of property, the
employment of personnel or the character of its business requires it to do so,
except where the failure to be so qualified or licensed would not have a
Material Adverse Effect on the Company.
4.3 Authorization. Each of the Sellers and the Company has full
power and authority (corporate, fiduciary, beneficiary, participant or other) to
enter into this Agreement and the Ancillary Agreements, as the case may be, and
to carry out the transactions contemplated hereby and thereby, and the board of
directors, trustees, or any governing body or person of the Company and each of
the Sellers has taken all action required by law, its charter or other governing
documents, as the case may be, or otherwise, to be taken by it to authorize the
execution, delivery and performance of this Agreement and the Ancillary
Agreements, as the case may be, and the consummation of the transactions
contemplated hereby and thereby, including to the extent necessary with respect
to the ESOP, authorization and approval of its participants. This Agreement is,
and the Ancillary Agreements, when executed will be, the legal, valid and
binding obligations of each of the Sellers and the Company or other parties
thereto (other than Buyer), enforceable against each of them in accordance with
their respective terms. A copy of the resolutions of the Company's board of
directors authorizing this Agreement and the related transactions and a copy of
any authorizing documents of the ESOP are attached hereto as Schedule 4.3.
4.4 No Violation; Consents. None of the execution, delivery and
performance of this Agreement and the Ancillary Agreements nor the consummation
of the transactions contemplated hereby and thereby will (i) violate any
provision of the Articles of Incorporation or Bylaws of the Company or any
governing documents of any Seller, including the ESOP, (ii) violate, result in a
breach of, conflict with, or constitute a default (or an event which, with the
giving of notice or lapse of time or both, would constitute a default) or
require any consent under, or give to others any right of termination,
amendment, acceleration, suspension, revocation or cancellation with respect to,
any Contract to which any Seller or the Company is a party or by which any of
the Shares or any of the assets or properties of the Company or any Seller are
bound, (iii) result in the creation or imposition of any Encumbrance upon any of
the Shares or any property or assets of the Company or any Seller under any
agreement, commitment or other Contract to which the Company or any Seller is a
party or by which the Company or any Seller is bound, or to which the property
of the Company or any Seller is subject, or (iv) violate, conflict with or
result in the breach of any statute or law or any judgment, decree, order,
regulation or rule of any court or governmental authority to which any Seller,
the Company, or any of their properties or assets are subject. Except as set
forth on Schedule 4.4, no action, consent, approval or authorization by or
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filing with any person or entity, including, without limitation, any
governmental authority, is required in connection with the execution, delivery
and performance by each of the Sellers and the Company of this Agreement and the
Ancillary Agreements, as the case may be, or the consummation by each of the
Sellers and the Company of the transactions contemplated by each of them herein
and therein.
4.5 Capitalization.
4.5.1 The authorized equity securities of the Company
consist solely of 100,000 shares of common stock, par value $5.00 per share, of
which 51,330.90 shares are issued and outstanding and constitute the Shares.
Sellers are and will be on the Closing Date the only record and beneficial
owners and holders of the Shares, as set forth on Schedule 4.5 (which Schedule
also sets forth the address of each such Seller and the certificate numbers of
the certificates representing the Shares), free and clear of all Encumbrances
(other than a legend indicating only that the Shares have not been registered
under the Securities Act and any applicable state securities laws).
4.5.2 There are no shares of capital stock of the Company
issued and outstanding (other than the Shares) and there are no shares of
treasury stock. All Shares are validly issued, fully paid and nonassessable.
None of the issued and outstanding Shares was issued in violation of any
preemptive rights. There are no outstanding (i) securities convertible into or
exchangeable or exercisable for any of the Company's capital stock; (ii)
options, warrants, calls or other rights, including, without limitation, rights
to demand registration or to sell securities in connection with any registration
by the Company under the Securities Act, with respect to the capital stock of
the Company, or to purchase or subscribe to capital stock of the Company or
securities convertible into or exchangeable or exercisable for capital stock of
the Company; (iii) contracts, commitments, agreements, understandings or
arrangements of any kind relating to the issuance, sale, transfer, or assignment
of any capital stock, any convertible or exchangeable securities or any options,
warrants or rights of the Company; or (iv) Shares or other securities of the
Company pledged as collateral to secure any agreement or obligation. Except as
set forth on Schedule 4.5, there are no voting trust agreements or other
contracts, agreements, arrangements, commitments, plans, proxies or
understandings restricting or otherwise relating to conveyance, voting or
dividend rights with respect to the Shares. Upon consummation of the
transactions contemplated by this Agreement Buyer will own all of the issued and
outstanding equity securities of the Company of every sort whatsoever, free and
clear of all Encumbrances.
4.6 Financial Statements. Attached hereto as Schedule 4.6 are the
consolidated balance sheet, statement of income, and statement of cash flows for
each of the years ended June 30, 1997, 1996 and 1995 and the consolidated
balance sheet and statement of income and
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statement of cash flows for the nine months ended March 31, 1998 (collectively
the "Financial Statements"). The Financial Statements (a) are in accordance with
the underlying books and records of the Company, (b) have been prepared in
accordance with GAAP consistently applied throughout the periods covered
thereby, and (c) fairly present the assets, liabilities (including all reserves)
and financial position of the Company as of the respective dates thereof and the
results of operations and changes in cash flows for the periods then ended. The
Financial Statements for the years ended June 30, 1997, 1996 and 1995 have been
audited by Mauldin & Jenkins, LLC, independent public accountants. At the
respective dates of the Financial Statements, there were no liabilities of the
Company which, in accordance with GAAP, should have been shown or reflected in
the Financial Statements or the notes thereto, which are not shown or reflected
in the Financial Statements or the notes thereto.
4.7 No Change in the Assets. Except as set forth in Schedule 4.7,
for the period from June 30, 1997 to March 31, 1998, and since March 31, 1998:
4.7.1 There has been no Material Adverse Change in the
Company;
4.7.2 Except in the ordinary course, there has not been any
sale or other disposition of any assets of the Company, or any Encumbrance
placed on its assets, or any purchase of assets, including inventory or
equipment, of the Company;
4.7.3 The Company has operated its business in the ordinary
course consistent with the Company's past practice so as to preserve its
business intact, to keep available to it the services of its employees, and to
otherwise preserve the Company's goodwill and its relationships with suppliers,
customers, distributors and others having business relations with it;
4.7.4 The Company has not changed its accounting methods or
practices (including any change in depreciation or amortization policies or
rates) or revalued any of its assets.
4.7.5 The Company has not taken any action that, if taken
after June 30, 1997, would violate Section 7.1.
4.8 Liabilities. The Company has no liabilities or obligations
(absolute, accrued, contingent or otherwise) except (i) liabilities which are
reflected on the Financial Statements or which are not required under GAAP to be
reflected on the Financial Statements as of March 31, 1998; (ii) liabilities
incurred or arising in the ordinary course of business since March 31, 1998,
(iii) liabilities arising in the ordinary course of business under Contracts to
which the Company is
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a party (excluding specifically any claim for breach of contract); and (iv)
liabilities expressly described in a Schedule hereto.
4.9 Assets; Absence of Encumbrances. The assets reflected on the
Financial Statements and leased or otherwise used by the Company (for which the
Company possesses the necessary rights to use the same) constitute all assets
necessary for the conduct of the Company's business. All of the assets reflected
on the Financial Statements as of March 31, 1998 as owned by the Company and all
assets acquired by the Company since March 31, 1998 (other than assets disposed
of in the ordinary course of business since such date) are owned by the Company
free and clear of all Encumbrances, other than Permitted Liens or Encumbrances
(i) reflected or reserved against on the Company's March 31, 1998 balance sheet
included in the Financial Statements or (ii) set forth on Schedule 4.9.
4.10 Real Property.
4.10.1 Description. Schedule 4.10 sets forth complete and
accurate legal descriptions of all Owned Real Property and all Leased Real
Property.
4.10.2 Title. The Company has good and marketable title in
fee simple to the Owned Real Property, free and clear of all Encumbrances,
except as disclosed in Schedule 4.10. Except as set forth on Schedule 4.10, with
respect to any agreements, arrangements, Contracts, covenants, conditions,
deeds, deeds of trust, rights-of-way, easements, mortgages, restrictions,
surveys, title insurance policies, and other documents granting to the Company
title to or an interest in or otherwise affecting the Owned Real Property
(copies of which have been delivered to Buyer), no breach or event of default
exists on the part of the Company or, to the knowledge of the Company, on the
part of any other party, and no condition or event has occurred that with the
giving of notice, the lapse of time, or both would constitute a breach or event
of a default by the Company or, to the Company's knowledge, any other person.
4.10.3 Leases. The Sellers and the Company have delivered to
Buyer an accurate copy of the leases and subleases covering the Leased Real
Property, including all amendments thereto and assignments thereof ("Leases").
All of such Leases are listed on Schedule 4.10.3. All of the Leases are valid
and in full force and effect. The Company has duly performed all of its
obligations under the Leases to the extent those obligations to perform have
accrued, and no violation of or default or breach under any Leases by the
Company or, to the Company's knowledge, any other party has occurred and neither
the Company nor, to the Company's knowledge, any other party has repudiated any
provisions thereof. All of the Leases will be enforceable by the Company after
the Closing to the same extent as if the transactions contemplated by this
Agreement had not been consummated.
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4.10.4 No Unpaid Charges. Except as set forth on Schedule
4.10, there are no unpaid charges, debts, liabilities, claims, or obligations
arising from the construction, occupancy, ownership, use, or operation of the
Real Property and no charges or assessments for public improvements or otherwise
made against the Real Property are unpaid, including without limitation those
for construction of sewer lines, water lines, storm drainage systems, electric
lines, natural gas lines, streets (including perimeter streets), roads and
curbs. No Real Property is subject to any condition or obligation to any
governmental entity or other person requiring the owner or any transferee
thereof to donate land, money or other property or to make off-site public
improvements.
4.10.5 Compliance with Laws. Except as set forth on Schedule
4.15, no litigation, arbitration, or similar proceeding is pending or, to
knowledge of the Company, threatened which affects the Company's use or
enjoyment of any of the Real Property. All of the Real Property is in compliance
with all applicable zoning and subdivision ordinances. The Real Property is
zoned (if applicable) to permit operation of the business presently conducted
thereon. No condemnation, eminent domain, or similar proceeding is pending or,
to the knowledge of the Company, is threatened against the Real Property.
4.10.6 Facilities. The Facilities and the equipment and
other tangible assets owned or leased by the Company at the Facilities, are (i)
adequately insured in the reasonable opinion of the Company, (ii) structurally
sound with no known, material defects, (iii) in good operating condition and
repair, subject to ordinary wear and tear taking into account the age thereof,
(iv) maintained on a basis consistent with past practices and in accordance with
applicable leases or other agreements, and (v) in conformity with all applicable
laws, ordinances, orders, regulations and other requirements relating thereto
currently in effect. The Facilities are supplied with utilities necessary for
the operation of the business and, to the Company's knowledge, such utilities
will be reasonably available for the expansion currently underway at its joist
manufacturing facility in Quincy, Florida (the "Quincy Expansion"). None of the
Facilities or equipment thereat is subject to any commitment or other
arrangement for their sale or use by any person. The Company has not granted to
any person any contract or other right to the use of any portion of the Real
Property, or to the use of any Facility or amenity on or relating to any such
property.
4.10.7 No Foreign Owners. Neither the Company nor any Seller
is other than a "United States person" within the meaning of Section 7701 of the
Code.
4.11 Receivables. The accounts receivable, other receivables and
all restricted funds on deposit reflected in the Financial Statements represent
valid obligations or amounts to which the Company is entitled arising, except as
noted in Schedule 4.11, from sales actually made in the
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ordinary course of business and are due and payable to the Company, and the
accounts receivable, other receivables (and allowance for doubtful accounts) and
restricted funds on deposit reflected on the Company's financial statements have
been established in accordance with GAAP.
4.12 Inventory and Equipment. The inventory of the Company
reflected in the Financial Statements was purchased in the ordinary course of
business, and the inventory (and reserves therefor) reflected in the Financial
Statements have been established in accordance with GAAP. The equipment of the
Company reflected on the Financial Statements is in good working condition and
suitable for its intended use, normal wear and tear excepted. The equipment
reflected on the Company's financial statements has been established in
accordance with GAAP.
4.13 Contracts and Commitments.
4.13.1 Contracts. Schedule 4.13 sets forth a complete and
accurate list of all Contracts of the following categories:
4.13.1.1 Contracts not made in the ordinary course of
the Company's conduct of the business;
4.13.1.2 Employment contracts, employment handbooks
or policies, bonus plans, programs and agreements, and severance agreements;
4.13.1.3 Supply, purchase, distribution, franchise,
license, sales or commission contracts related to the Company involving payments
made by or to the Company of $50,000.00 or more;
4.13.1.4 Contracts involving expenditures or
liabilities, actual or potential, in excess of $50,000.00 or otherwise material
to the Company, and not cancelable (without liability) within 30 calendar days;
4.13.1.5 Contracts or commitments relating to
commission arrangements with others;
4.13.1.6 Promissory notes, loans, agreements,
evidences of indebtedness, letters of credit, guarantees, or other instruments
relating to an obligation to pay money, whether the Company shall be the
borrower, lender or guarantor thereunder or whereby any assets are pledged
(excluding credit provided by the Company in the ordinary course of business to
its customers);
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4.13.1.7 Leases of personal property not cancelable
(without liability) within 30 calendar days; and
4.13.1.8 Contracts containing covenants limiting the
freedom of the Company or any officer, director or shareholder of the Company to
engage in any line of business or compete with any person.
Sellers and Company have delivered to Buyer or have provided Buyer an
opportunity to examine, true, correct and complete copies of all of the
Contracts listed on Schedule 4.13, together with all other material Contracts of
the Company and all contracts and agreements relating to the Shares, including
all amendments and supplements thereto.
4.13.2 Absence of Breaches or Defaults. All of the Contracts
are valid and in full force and effect. The Company has duly performed all of
its obligations under the Contracts to the extent those obligations to perform
have accrued; no violation of, or default or breach under any Contracts by the
Company or, to its knowledge, any other party has occurred; no condition or
event has occurred that with the giving of notice or lapse of time, or both,
would constitute a breach or default by the Company or, to the Company's
knowledge, any other person; and neither the Company nor, to its knowledge, any
other party has repudiated any provisions thereof. All of the Contracts will be
enforceable by the Company after the Closing to the same extent as if the
transactions contemplated by this Agreement had not been consummated.
4.14 Books and Records. The Company has made and kept (and given
Buyer access to) books and records and accounts, which, in reasonable detail,
fairly present the financial transactions and other material activities of the
Company. The minute books of the Company previously delivered to Buyer
accurately and adequately reflect all action previously taken by the
shareholders, board of directors and committees of the board of directors of the
Company. The stock book records of the Company previously delivered to Buyer are
true, correct and complete, and accurately reflect all transactions effected in
the Company's stock through and including the date hereof.
4.15 Litigation. Except as set forth on Schedule 4.15, there is no
action, order, writ, injunction, judgment or decree outstanding or any claim,
suit, litigation, proceeding, labor dispute, or arbitral action pending, or to
the Company's knowledge, any governmental audit or investigation (collectively,
with items listed above, an "Action") threatened (a) against the Company or its
assets or (b) seeking to delay, limit or enjoin the transactions contemplated by
this Agreement. The Company is not in default with respect to or subject to any
judgment, order, writ, injunction or decree of any court or governmental agency,
and there are no unsatisfied judgments against the Company.
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4.16 Labor Matters. The Company is not a party to any labor
agreement with respect to its employees with any labor organization, union,
group or association and no employees of the Company are represented by a labor
organization, union, group or association in connection with their employment by
the Company. Since July 1, 1995, the Company has not experienced any attempt by
organized labor or its representatives to make the Company conform to demands of
organized labor relating to its employees or to enter into a binding agreement
with organized labor that would cover the employees of the Company. Subject to
the post-termination obligations of the Company under the ERISA plans and
related documents disclosed as items 1 and 2 of Schedule 4.22, the employment of
all persons presently employed or retained by the Company is terminable at will
by the Company. Schedule 4.16 (i) contains a list of all employees of the
Company and their wage rates or salaries as of the date of this Agreement, (ii)
sets forth the dates of employment for such employees and (iii) accurately
characterizes them as exempt or non-exempt.
4.17 Compliance with Law. The Company, the conduct of its business
and the operation of its Facilities have not violated (except where such
violation has been fully cured as of the date hereof), and are in compliance
with all laws, statutes, ordinances, regulations, rules and orders of any
foreign, federal, state or local government and any other governmental
department or agency, and any judgment, decision, decree or order of any court
or governmental agency, department or authority. The Company and the conduct of
its business and the operation of the Facilities are in conformity with all
energy, public utility, and health codes, regulations and ordinances, the
Americans with Disabilities Act, OSHA and all other foreign, federal, state, and
local governmental and regulatory requirements. Except as disclosed on Schedule
4.17, the Company has not received any notice to the effect that, or otherwise
been advised that, it is in violation of any such statutes, regulations, rules,
judgments, decrees, orders, ordinances or other laws (except where such
violation has been fully cured as of the date hereof). The Company has all
Permits required to conduct its business and possesses or has timely applied for
and is pursuing necessary Permits for the construction and operation of the
Quincy Expansion. All material Permits are listed on Schedule 4.17. All material
Permits will be enforceable by the Company after the Closing to the same extent
as if the transactions contemplated by this Agreement had not been consummated.
4.18 No Brokers. None of the Sellers, the Company or any of the
Company's officers, directors, employees or Affiliates has employed or made any
agreement with any broker, finder or similar agent or any person or firm which
will result in an obligation on the part of the Buyer or, except as set forth in
Schedule 4.18, the Company, to pay any finder's fee, brokerage fees or
commission or similar payment in connection with the transactions contemplated
hereby.
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4.19 No Other Agreements to Sell the Company. Neither any Seller
nor the Company has any commitment or legal obligation, absolute or contingent,
to any other person or firm other than the Buyer to sell, assign, transfer or
effect a sale of any of the Shares or any other shares of the Company's capital
stock (authorized or unauthorized), or to effect any merger, consolidation,
liquidation, dissolution or other reorganization of the Company, or to effect
any sale of the Company's assets (other than the sale of inventory of the
Company in the ordinary course of business).
4.20 Proprietary Rights.
4.20.1 Proprietary Rights. Schedule 4.20 lists all of the
Company's federal, state and foreign registrations of patents, trademarks,
service marks, trade names, and all pending applications for any such
registrations, all other trademarks and trade names which the Company uses. Such
rights, together with all trade secrets and other proprietary rights, whether or
not registered, and all computer software created by or on behalf of the Company
are hereinafter referred to collectively as "Proprietary Rights".
4.20.2 Royalties and Licenses. No person has a right to
receive a royalty or similar payment in respect of any Proprietary Rights.
Except as set forth on Schedule 4.20, the Company is not a party to any licenses
granted, sold or otherwise transferred by or to it or other agreements to which
it is a party, relating in whole or in part to any of the Proprietary Rights
other than object code end-user licenses granted to it in the ordinary course of
business that permit use of software products without a right to modify,
distribute or sublicense the same.
4.20.3 Ownership and Protection of Proprietary Rights. The
Company owns or licenses, and has the sole right to use or (if it so elects) to
sublicense each of the Proprietary Rights. None of the Proprietary Rights is
involved in any pending or, to the Company's knowledge, threatened Action. The
Company has not received any notice of invalidity with respect to such
Proprietary Rights. The Company has taken all reasonable steps to protect the
Proprietary Rights from infringement by any other person. To the knowledge of
the Company, the Company's use of the Proprietary Rights is not infringing upon
or otherwise violating the rights of any third party in or to such Proprietary
Rights, and no such infringement been alleged by any third party. All of the
Proprietary Rights are validly owned or licensed by the Company and will not
cease to be validly owned or licensed and in full force and effect by reason of
the execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated by this Agreement.
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4.21 Tax Matters.
4.21.1 Filing of Tax Returns, Payment of Taxes. Except as
set forth in Schedule 4.21.1, the Company has filed all Tax Returns that the
Company was required to file prior to the date hereof. All such Tax Returns were
correct and complete and were prepared and filed in accordance with applicable
law. Except as set forth in Schedule 4.21.1, all Taxes due and payable by or
with respect to the Company (whether or not shown on any Tax Return) with
respect to all taxable periods ending prior to the date hereof have been paid.
All other Taxes due and payable by the Company with respect to periods ending on
or before the Closing Date (whether or not a Tax Return is due on such date)
have been or will be paid on or before Closing Date or will be accrued as
liabilities on the Closing Date Balance Sheet. For purposes of the preceding
sentence, in determining the amount of Taxes due and payable by the Company with
respect to periods ending on or before the Closing Date, the Closing Date shall
be deemed to be the last day of any applicable tax period. Except as set forth
in Schedule 4.21.1, all Tax Returns the due date of which (determined without
extensions) is on or after the date hereof but on or before the Closing Date
will be correct and complete and filed in accordance with applicable law.
4.21.2 Taxing Jurisdictions. Schedule 4.21.2 lists (i) all
countries, states, cities, or other jurisdictions in which the Company is
currently subject to an obligation to file Tax Returns or to collect sales or
use Taxes and (ii) (x) all countries, states, cities, or other jurisdictions in
which the Company is a beneficiary of any real or personal property Tax
exemptions or concessions, reduced rates, or Tax credits (excluding any such
items that generally are provided by such jurisdictions to other similarly
situated corporations), (y) the annual benefit of each such item, and (z) the
terms governing expiration or phase-out of each such item.
4.21.3 General Tax Matters. Except as set forth in Schedule
4.21.3, with respect to each taxable period for the Company ending on or before
the Closing Date (or as of such other date as set forth below), (i) no
deficiency or proposed adjustment that has not been settled or otherwise
resolved for any amount of Taxes has been asserted in writing or assessed by any
taxing authority against the Company; (ii) the Company has not consented to
extend the time in which any Taxes may be assessed or collected by any taxing
authority; (iii) the Company has not requested or been granted an extension of
the time for filing any Tax Return; (iv) there is no action, suit, taxing
authority proceeding, or audit or claim for refund now in progress, pending, or,
to the Company's knowledge, threatened against or with respect to the Company
regarding Taxes; (v) the Company has not made an election or filed a consent
under Section 341(f) of the Code (or any corresponding provision of state, local
or foreign law) or agreed to have Section 341(f)(2) of the Code (or any
corresponding provision of state, local or foreign law) apply to any disposition
of subsection (f) assets (as defined in Section 341(f)(4) of the Code) owned by
the Company; (vi) there are no Encumbrances on the assets of the Company
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relating or attributable to Taxes (other than liens for Taxes not yet due and
payable); (vii) the Company will not be required (A) as a result of a change in
method of accounting for a taxable period ending on or prior to the Closing
Date, to include any adjustment under Section 481 of the Code (or any
corresponding provision of state, local, or foreign law) in taxable income for
any taxable period (or portion thereof) beginning after the Closing Date or (B)
as a result of any "closing agreement," as described in Section 7121 of the Code
(or any corresponding provision of state, local, or foreign law) to include any
item of income or exclude any item of deduction from any taxable period (or
portion thereof) beginning after the Closing Date; (viii) except with respect to
the affiliated group (as defined in Section 1504 of the Code) encompassing the
Company, Addison Steel, Inc., and Quincy Joist Company, the Company has not been
a member of an affiliated group (as defined in Section 1504 of the Code) or
filed or been included in a combined, consolidated, or unitary income Tax
Return; (ix) the Company is not a party to or bound by any tax allocation or tax
sharing agreement and, except with respect to contracts entered into in the
ordinary course of the Company's business (including equipment leases), has no
current or potential obligation to indemnify any other person with respect to
any Tax or pay the Taxes of any other person under Treasury Regulations Section
1.1502-6 (or any similar provisions of state, local, or foreign law) as a
transferee or successor, by contract or otherwise; (x) to the Company's
knowledge, no claim has ever been made by a taxing authority in a jurisdiction
where the Company does not file Tax Returns that the Company is or may be
subject to Taxes assessed by such jurisdiction; (xi) the Company does not have a
permanent establishment in any foreign country, as defined in the relevant tax
treaty between the United States of America and such foreign country; (xii) the
Company was not acquired in a qualified stock purchase under Code Section
338(d)(3) and no elections under Code Section 338(g), protective carryover basis
elections, or offset prohibition elections are applicable to the Company; (xiii)
no sales or use tax will be payable by the Company as a result of the
transactions contemplated by this Agreement, and there will be no non-recurring
intangible tax, documentary stamp tax, or other excise tax (or comparable tax
imposed by an governmental entity) imposed upon the Company as a result of the
transactions contemplated by this Agreement; (xiv) Buyer will not be required to
deduct and withhold any amount with respect to Taxes imposed upon the Sellers
upon consummation of the transactions contemplated by this Agreement; (xv) none
of the Company's assets is property required to be treated as being owned by any
other person under the "safe harbor lease" provisions of former Section
168(f)(8) of the Internal Revenue Code of 1954, as amended, or (B) has been
financed with or directly or indirectly secures any bond or debt the interest of
which is tax-exempt under Section 103(a) of the Code; (xvi) the Company has
withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to an employee, independent contractor,
shareholder, or other third party; (xvii) the Company has not received any
income from illegal sources nor assigned any income without appropriately
reporting it or paying Tax on it; and (xviii) the Company owns no interest in
any "controlled foreign corporation" (within the meaning of Code Section 957),
"passive foreign investment company" (within the meaning of Code
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Section 1296) or other entity the income of which is required to be included in
the income of the Company whether or not distributed.
4.21.4 Tax Attributes. Set forth in Schedule 4.21.4 is a
list reflecting the following information with respect to the Company as of June
30, 1997: (i) the basis of the Company in its assets and (ii) the amount of any
net operating loss, net capital loss, unused investment or other tax credit,
unused foreign tax or tax credit, or excess charitable contribution allocable to
the Company assets. Also set forth in Schedule 4.21.4 is a list reflecting, with
respect to the "affiliated group" (within the meaning of Code Section 1504 or
any similar provision of state, local, or foreign law) encompassing the Company,
as of June 30, 1997, as well as on an estimated pro forma basis as of the
Closing Date: (i) the aggregate amount of gains from intercompany transactions
deferred under Treasury Regulations 1.1502-13 or any predecessor provision
thereof (or any similar provision of state, local, or foreign law) and not
previously restored to income excluding gains on sales in the ordinary course of
business, and (ii) the amount of any "excess loss account" within the meaning of
Treasury Regulations Section 1.1502-19 or any predecessor provision thereof (or
any similar provision of state, local, or foreign law).
4.21.5 Copies of Tax Returns. Except as otherwise set forth
in Schedule 4.21.5 the Company has made available to Buyer copies of all income
and sales Tax Returns filed by or with respect to the Company relating to the
period encompassing the three taxable years of the Company preceding the date
hereof.
4.21.6 Definition. Any reference to the term "the Company"
in this Section 4.21 shall refer to the Company and any Subsidiary of the
Company. Further, any reference to any action of "the Company" in this Section
4.21 shall encompass any action or actions taken by or at the direction of the
Company whether or not such actions taken by or at the direction of the Company
were properly authorized.
4.22 Employees and Employee Benefits.
4.22.1 As used in this Section 4.22 and in Section 4.23, the
following terms have the meanings set forth below.
"Benefit Arrangement" shall mean any employment, consulting,
severance or other similar contract, arrangement or policy and each plan,
arrangement (written or oral), program, agreement or commitment providing for
insurance coverage (including without limitation any self-insured arrangements),
workers' compensation, disability benefits, supplemental unemployment benefits,
vacation benefits, retirement benefits, life, health, disability or accident
benefits (including without limitation any "voluntary employees' beneficiary
association" as
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defined in Section 501(c)(9) of the Code providing for the same or other
benefits) or for deferred compensation, profit sharing bonuses, stock options,
stock appreciation rights, stock purchases or other forms of incentive
compensation or postretirement insurance, compensation or benefits which (A) is
not a Welfare Plan, Pension Plan or Multiemployer Plan, (B) is entered into,
maintained, contributed to or required to be contributed to, as the case may be,
by the Company or an ERISA Affiliate or under which the Company or any ERISA
Affiliate may incur any liability, and (C) covers any employee or former
employee of the Company or any ERISA Affiliate (with respect to their
relationship with such entities).
"Employee Plans" shall mean all Benefit Arrangements,
Multiemployer Plans, Pension Plans and Welfare Plans.
"ERISA Affiliate" shall mean any entity which is (or at any
relevant time was) a member of a "controlled group of corporations" with, under
"common control" with, or a member of an "affiliated service group" with, the
Company as defined in Section 414(b), (c), (m) or (o) of the Code, or under
"common control" with the Company, within the meaning of Section 4001(b)(1) of
ERISA.
"Multiemployer Plan" shall mean any "multiemployer plan," as
defined in Section 4001(a)(3) of ERISA, under which the Company or any ERISA
Affiliate has or may incur any liability.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Pension Plan" shall mean any "employee pension benefit plan"
as defined in Section 3(2) of ERISA (other than a Multiemployer Plan) which (A)
the Company or any ERISA Affiliate has or may incur any liability; (B) covers
any employee or former employee of the Company or any ERISA Affiliate (with
respect to their relationship with such entities); and (C) is not a
Multiemployer Plan.
"Welfare Plan" shall mean any "employee welfare benefit plan"
as defined in Section 3(1) of ERISA, which (A) the Company or any ERISA
Affiliate has or may incur any liability; (B) covers any employee or former
employee of the Company or any ERISA Affiliate (with respect to their
relationship with such entities); and (C) is not a Multiemployer Plan.
4.22.2 Disclosure; Delivery of Copies of Relevant Documents
and Other Information. Schedule 4.22 contains a complete list of all Employee
Plans. True and complete copies of each of the following documents have been
delivered or made available by the Company to Buyer: (i) each Welfare Plan and
Pension Plan (and, if applicable, related trust
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agreements) and all amendments thereto, all written interpretations thereof and
written descriptions thereof which have been distributed to the Company's
employees and all annuity contracts or other funding instruments; (ii) each
Benefit Arrangement including written interpretations thereof and written
descriptions thereof which have been distributed to the Company's employees
(including descriptions of the number and level of employees covered thereby)
and a brief description of any Benefit Arrangement which is not in writing;
(iii) the most recent determination or opinion letter, if any, issued by the
Internal Revenue Service with respect to each Pension Plan; (iv) for the three
most recent plan years, Annual Reports on Form 5500 Series required to be filed
with any governmental agency for each Pension Plan and each Welfare Plan; (v)
all actuarial reports prepared for the last three plan years for each Pension
Plan; (vi) a copy of the independent valuation of the Shares owned by the ESOP
for the five most recent plan years of the ESOP; (vii) a copy of any repurchase
liability study relating to Shares distributed from the ESOP; (viii) a copy of
the audited financial statements of the ESOP for the three most recent plan
years of the ESOP; (ix) a statement showing the number of Shares released from
the loan suspense account maintained in connection with the ESOP for its last
six plan years along with supporting detail adequate to illustrate that the
Share release was consistent with the ESOP document and applicable law; (x) a
schedule listing all Shares purchased by the ESOP since its inception and copies
of any supporting documentation regarding the purchases; (xi) copies of any loan
documents or stock purchase agreements to which the ESOP is a party; (xii) all
correspondence with the Internal Revenue Service, the Department of Labor or the
PBGC regarding each Employee Plan, including the ESOP; and (xiii) all
correspondence regarding any pending or threatened claim against any Employee
Plan or the Company or any ERISA Affiliate regarding any matter related to any
Employee Plan.
4.23 ERISA Representations.
4.23.1 Pension Plans. No Pension Plan is a defined benefits
plan as defined in Section 414 of the Code and no Pension Plan is subject to the
minimum funding requirements of Title IV of ERISA or Section 412 of the Code.
Each Pension Plan which is intended to be qualified (and each related trust
agreement, annuity contract or other funding instrument) satisfies in all
material respects requirements for qualified and tax-exempt status under the
provisions of Code Sections 401(a) (or 403(a), as appropriate) and 501(a) and
has so satisfied such requirement during the period from its adoption to date.
4.23.2 Multiemployer Plans. Neither the Company nor any
ERISA Affiliate has ever had any obligation to contribute to any Multiemployer
Plans.
4.23.3 Welfare Plans. Each Welfare Plan which is a "group
health plan," as defined in Section 607(1) of ERISA, has been operated in
compliance in all material respects with
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the health care continuation provisions of Part 6 of Title I, Subtitle B of
ERISA and Section 4980B of the Code at all times and, but for compliance with
such provisions, no Welfare Plan provides post-retirement benefits for
employees.
4.23.4 Compliance with Law. Each Employee Plan has been
maintained in all material respects in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations
which are applicable to such Employee Plan, including without limitation ERISA
and the Code.
4.23.5 Unrelated Business Taxable Income. To the Company's
knowledge, no Employee Plan (or trust or other funding vehicle pursuant thereto)
has any liability for Tax imposed under Code Section 511.
4.23.6 Deductibility of Payments. There is no contract,
agreement, plan or arrangement covering any employee or former employee of the
Company (with respect to its relationship with such entities) that, individually
or collectively, provides for the payment by the Company of any amount (i) for
which the deduction by the Company would be disallowed under Section 162(m) of
the Code, or (ii) that is or would be an "excess parachute payment" pursuant to
Section 280G of the Code.
4.23.7 Fiduciary Duties and Prohibited Transactions. Neither
the Company nor, to the knowledge of the Company, any plan fiduciary or party in
interest (as such terms are defined in Section 3(21) and 3(14) of ERISA) of any
Welfare Plan or Pension Plan has engaged in any transaction in violation of
Sections 404 or 406 of ERISA or any "prohibited transaction," as defined in
Section 4975(c)(1) of the Code, for which no exemption exists under Section 408
of ERISA or Section 4975(c)(2) or (d) of the Code, or has otherwise violated the
provisions of Part 4 of Title I, Subtitle B of ERISA. The Company has not
knowingly participated in a violation of Part 4 of Title I, Subtitle B of ERISA
by any plan fiduciary of any Welfare Plan or Pension Plan (or other employee
benefit plan subject to ERISA) and has not been assessed any civil penalty under
Section 502(i) or Section 502(l) of ERISA.
4.23.8 Validity and Enforceability. To the Company's
knowledge, each Welfare Plan, Pension Plan, related trust agreement, annuity
contract or other funding instrument and Benefit Arrangement is legally valid
and binding and in full force and effect.
4.23.9 Litigation. There is no action, order, writ,
injunction, judgment or decree outstanding or claim, suit, litigation,
proceeding, arbitral action, governmental audit or investigation relating to or
seeking benefits under any Employee Plan have been filed, or to the Company's
knowledge, threatened or anticipated against the Company, any ERISA Affiliate or
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any Employee Plan, the sponsor or administrator of any Employee Plan or against
any fiduciary of any of the Employee Plans with respect to the operation of any
such plan.
4.23.10 No Amendments. Neither the Company nor any ERISA
Affiliate has any announced plan or legally binding commitment to create any
additional Employee Plans or to amend or modify any existing Employee Plan.
4.23.11 No Other Liability. To the Company's knowledge, no
event has occurred in connection with which the Company or any ERISA Affiliate
or any Employee Plan, directly or indirectly, could be subject to any liability
(A) under any statute, regulation or governmental order relating to any Employee
Plans or (B) pursuant to any obligation of the Company to indemnify any person
against liability incurred under any such statute, regulation or order as they
relate to the Employee Plans.
4.23.12 Unpaid Contributions. Neither the Company nor any
ERISA Affiliate has any liability for unpaid contributions under Section 515 of
ERISA with respect to any Pension Plan or Welfare Plan.
4.23.13 Insurance Contracts. Neither the Company nor any
Employee Plan holds as an asset of any Employee Plan any interest in any annuity
contract, guaranteed investment contract or any other investment or insurance
contract issued by an insurance company that is the subject of bankruptcy,
conservatorship or rehabilitation proceedings.
4.23.14 No Acceleration or Creation of Rights. Neither the
execution and delivery of this Agreement by the Company nor the consummation of
the transactions contemplated hereby will result in the acceleration or creation
of any rights of any person to benefits under any Employee Plan (including,
without limitation, the acceleration of the vesting or exercisability of any
stock options, the acceleration of the vesting of any restricted stock, the
acceleration of the accrual or vesting of any benefits under any Pension Plan or
the acceleration or creation of any rights under any severance, parachute or
change in control agreement).
4.23.15 Termination. Each Welfare Plan and Benefit
Arrangement may be terminated by the Company without penalty upon 30 days
advance notice and without causing the Company to incur any additional
liability.
4.24 Compliance With Environmental Laws.
4.24.1 Definitions. The following terms, when used in this
Section 4.24, shall have the following meanings. Unless the context otherwise
requires, any of these terms may be used in the singular or the plural depending
on the reference.
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4.24.2 "Company" and "Facility" or "Facilities". For
purposes of this Section 4.24 only, the term (i) "Company" shall include (A) the
Company and the Subsidiaries and all of their Affiliates, and the Sellers and
their Affiliates, (B) all partnerships, joint ventures and other entities or
organizations in which the Company was at any time or is a partner, joint
venturer, member or participant and (C) all predecessor or former corporations,
partnerships, joint ventures, organizations, trusts, businesses or other
entities, whether in existence as of the date hereof or at any time prior to the
date hereof, the assets or obligations of which have been acquired or assumed by
the Company or to which the Company has succeeded; and (ii) "Facilities" or
"Facility" shall mean all of the Facilities, each Facility and all Real Property
and Former Property.
4.24.3 "Release" shall mean and include any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
migrating, leaching, dumping or disposing into the environment or the work place
of any Hazardous Substance, and otherwise as defined in any Environmental Law.
4.24.4 "Hazardous Substance" shall mean any material,
element, compound, or mixture, whether solid, liquid, or gaseous:
(i) the presence of which requires investigation or remediation
under any Environmental Law or pursuant to the unappealed decision of any
governmental authority; or
(ii) which is defined as "hazardous waste," "hazardous substance,"
"toxic substance," "toxic material," "pollutant," or "contaminant" under any
Environmental Law including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.
Sections 9601, et seq., the Clean Water Act, 33 U.S.C. Section 1251 et
seq., the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq., the Federal Insecticide, Fungicide and Rodenticide Act, any laws
regulating the transportation of such materials, any analogous state or local
laws, and any rules, regulations, policies, and guidances promulgated
thereunder; or
(iii) Which is or is suspected to be, pursuant to the determination
of any governmental authority, toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or is currently subject to
regulation by any governmental authority; or
(iv) the presence of which causes or threatens to cause a nuisance
as defined by an applicable Environmental Law, to property owned, leased,
subleased, operated, managed, occupied or otherwise controlled by Company or a
Subsidiary, or to adjacent or impacted properties; or
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(v) which contains or in which has been detected in violation of
an Environmental Law, gasoline, diesel fuel or other petroleum hydrocarbons or
volatile organic compounds; or
(vi) which contains or in which has been detected in violation of
an Environmental Law, PCBs or asbestos or asbestos-containing materials or urea
formaldehyde foam insulation or lead or lead-containing paint; or
(vii) which is radon gas.
4.24.5 Compliance With Environmental Laws. Except as set
forth on Schedule 4.24, the Facilities have been owned, leased, operated and
maintained in compliance with all federal, state, local or foreign laws,
statutes, ordinances, regulations, rules, judgments, orders, notice
requirements, court decisions, agency guidelines or principles of law (including
common law), restrictions or licenses, which (i) regulate or relate to the
protection or clean-up of the environment, the use, treatment, storage,
transportation, handling or disposal of Hazardous Substances or other hazardous,
toxic or otherwise dangerous substances, wastes or materials (whether gas,
liquid or solid), the preservation or protection of waterways, groundwater,
drinking water, air, wildlife, plants or other natural resources, or the health
and safety of persons or property, including without limitation protection of
the health and safety of employees or (ii) impose liability with respect to any
of the foregoing, including without limitation the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), Resource Conservation & Recovery
Act (42 U.S.C. Section 6901 et seq.) ("RCRA"), Safe Drinking Water Act (21
U.S.C. Section 349, 42 U.S.C. Sections 201, 300f), Toxic Substances
Control Act (15 U.S.C. Section 2601 et seq.), Clean Air Act (42 U.S.C. Section
7401 et seq.), the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.) ("CERCLA"), or any other similar
federal, state or local law of similar effect, each as amended (collectively,
"Environmental Laws"). The Real Property does not contain wetlands or a level of
radon above action levels of the U.S. Environmental Protection Agency and it is
not located within a "critical," "preservation," "conservation" or similar type
of area.
4.24.6 Permits. Except as set forth on Schedule 4.24, the
Company has, and at all times has had, and has timely renewed, all Permits
required under any Environmental Law and the Facilities are, and at all times
have been, in compliance with all such Permits.
4.24.7 Permits Required. The consummation of any of the
transactions contemplated by this Agreement will not require an application for
issuance, renewal, transfer or extension of, or any other administrative action
regarding, any Permit required under any Environmental Law.
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4.24.8 Notice of Violation. The Company has not received any
written notice at any time that it or the Facilities is or were claimed to be in
violation of the provisions of any Environmental Law or in non-compliance with
the conditions of any Permit, and there is no pending, or to the Company's
knowledge, threatened lawsuit, governmental or other legal action to that
effect.
4.24.9 Pending Actions. There is not now pending, or to the
Company's knowledge, threatened, nor is there or has there been any basis for,
nor has there ever been, any Action against the Company under any Environmental
Law or otherwise with respect to any Release or mishandling of any Hazardous
Substance.
4.24.10 Judgments. There are no consent decrees, judgments,
judicial or administrative orders or agreements with, or liens by, any
governmental authority or quasi-governmental entity relating to any
Environmental Law which regulate, obligate, bind or in any way affect the
Company or the Facilities.
4.24.11 Hazardous Substances. There is not and has not been
any Hazardous Substance used, generated, treated, stored, transported, disposed
of, handled or otherwise existing on, under, about or from any Facility, except
for quantities of any such Hazardous Substances stored or otherwise held on,
under or about any such Facility in full compliance with all Environmental Laws
and necessary for the operation of the business.
4.24.12 Handling of Hazardous Substances. The Company has at
all times used, generated, treated, stored, transported, disposed of or
otherwise handled Hazardous Substances in compliance with all Environmental Laws
and in a manner that will not result in liability of the Company or Buyer under
any Environmental Law.
4.24.13 Environmental Conditions. Except as set forth on
Schedule 4.24, there are no present or past Environmental Conditions (as defined
below) in any way relating to Company, its business or the Facilities.
"Environmental Conditions" means the introduction into the soil, groundwater or
environment of or near the Facilities (through leak, spill, release, discharge,
escape, emission, dumping, disposal or otherwise) of any pollution, including
without limitation any contaminant, irritant or pollutant or Hazardous Substance
(whether or not upon the property of the business and whether or not such
pollution constituted at the time thereof a violation of any Environmental Law)
as a result of which either the Company or, after the Closing, Buyer has or may
become liable to any federal, state, or local governmental authority or person
or by reason of which any of the assets may suffer or be subjected to any lien.
4.24.14 CERCLA or RCRA. No current or past use, generation,
treatment, transportation, storage, disposal or handling practice of the Company
with respect to any
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Hazardous Substance has or will result in any liability under the CERCLA or RCRA
or any state or local law of similar effect.
4.24.15 Storage Tank. Except as set forth on Schedule 4.24,
there is not now and has not been at any time in the past any underground or
above-ground storage tank at any Facility where the installation, use,
maintenance, repair, testing, closure or removal of such tank was not in
compliance with all Environmental Laws and there has been no Release from or
rupture of any such tank, including without limitation any Release from or in
connection with the filling or emptying of such tank.
4.24.16 Environmental Audits or Assessments. True, complete
and correct copies of the written reports, and all parts thereof, including any
drafts of such reports if such drafts are in the possession or control of the
Company, of all environmental audits or assessments which have been conducted at
any Facility within the past five years, either by the Company or any attorney,
environmental consultant or engineer engaged for such purpose, have been
delivered to Buyer and a list of all such reports, audits and assessments and
any other similar report, audit or assessment of which the Company or Sellers
have knowledge is included on Schedule 4.24.
4.24.17 Indemnification Agreements. The Company is not a
party, whether as a direct signatory or, to the Company's knowledge, as
successor, assign or third party beneficiary, or, to the Company's knowledge,
otherwise bound, to any lease or other Contract under which the Company is
obligated by or entitled to the benefits of, directly or indirectly, any
representation, warranty, indemnification, covenant, restriction or other
undertaking concerning Environmental Conditions.
4.24.18 Releases or Waivers. The Company has not released any
other person from any claim under any Environmental Law or waived any rights
concerning any Environmental Condition.
4.24.19 Notices, Warnings and Records. Except as discussed on
Schedule 4.24.19, the Company has given all notices and warnings, made all
reports, and has kept and maintained all records required by and in compliance
with all Environmental Laws.
4.24.20 Former Property. Schedule 4.24.20 lists all real
property formerly owned or used by the Company or any of its Subsidiaries,
present or former (the "Former Property"), and sets forth the complete legal
descriptions thereof.
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4.25 Insurance.
4.25.1 Schedule 4.25 describes all policies of insurance
(including the insurer, type of insurance and period of coverage) to which the
Company is a party or under which the Company or any employee, officer or
director of the Company (in his or her capacity as such) is insured. All such
policies, together with such self-insurance, (i) provide adequate insurance
coverage for the Company, its business, assets and operations for all risks
normally insured against by a person or entity carrying on the same business or
businesses as the Company, (ii) are sufficient for compliance with all legal
requirements and Contracts to which the Company is a party or by which it is
bound, and (iii) will continue in full force and effect following the Closing.
4.25.2 The Company has not received (i) with respect to any
pending insurance claims, any refusal of coverage or any notice that a defense
will be afforded with reservation of rights, or (ii) any notice of cancellation
or any other indication that any insurance policy is no longer in full force or
effect or will not be renewed or that the issuer of any policy is not willing or
able to perform its obligations thereunder.
4.25.3 The Company has paid all premiums due, and has
otherwise performed in all material respects all of its obligations under each
insurance policy described above.
4.25.4 The life insurance policies of the Company covering
the lives of Mr. Addison and Glen Davis have aggregate cash surrender values of
approximately $550,000. The Company is the sole beneficiary of such policies.
4.26 Affiliate Transactions. Except as set forth on Schedule 4.26,
no officer or director of the Company, or any Seller, or any member of the
immediate family of any such officer, director, or Seller, or any entity in
which any of such persons owns any beneficial interest (other than a publicly
held corporation whose stock is traded on a national securities exchange or in
the over-the-counter market and less than 1% of the stock of which is
beneficially owned by any of such persons) has any agreement with the Company or
any interest in any agreement of the Company or in any property (real, personal,
or mixed, tangible or intangible) owned or used by the Company or otherwise
pertaining to the Company or its business or assets. For purposes of the
preceding sentence, the members of the immediate family of an officer or
director of the Company or Seller shall consist of the spouse, parents,
children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and
brothers- and sisters-in-law of such officer, director or Seller.
4.27 Disclosure. To the Company's knowledge, neither this Agreement
nor any of the Schedules or Exhibits hereto contains or shall contain when
delivered at Closing any untrue statement of a material fact or shall omit to
state a material fact necessary to make the statements
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contained herein or therein, in light of the circumstances in which they were
made, not misleading.
4.28 Confidential Memorandum. The projections contained in the
Confidential Memorandum provided by or on behalf of the Company to prospective
bidders were made in good faith based upon the reasonable belief of Company
management.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
5.1 Representations and Warranties of Buyer. Buyer hereby
represents and warrants to Sellers as follows, which representations and
warranties are, as of the date hereof, and will be, as of the Closing Date, true
and correct:
5.1.1 Organization of Buyer. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
5.1.2 Authorization. Buyer has all requisite corporate
power and authority, and has taken all corporate action necessary, to execute
and deliver this Agreement and each of the Ancillary Agreements to which it is a
party, to consummate the transactions contemplated hereby and thereby and to
perform its obligations hereunder and thereunder. This Agreement has been duly
executed and delivered by Buyer and is (and following their execution and
delivery by Buyer and the other parties thereto, as applicable, each of the
Ancillary Agreements to which Buyer is a party will be) a legal, valid and
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms.
5.1.3 No Conflict or Violation. Neither the execution,
delivery or performance of this Agreement or the Ancillary Agreements to which
Buyer is a party nor the consummation of the transactions contemplated hereby or
thereby, nor compliance by Buyer with any of the provisions hereof or thereof,
will (i) violate or conflict with any provision of the Certificate of
Incorporation or Bylaws of Buyer, (ii) violate any statute, rule, regulation,
ordinance, code, order, judgment, ruling, writ, injunction, decree or award
binding upon Buyer, or (iii) violate any contract or agreement to which Buyer is
a party, in each case to the extent that such violation or conflict would
prevent Buyer from consummating the transactions contemplated hereby or result
in any liability to Sellers.
5.1.4 Consents and Approvals. No notice to, declaration,
filing or registration with, or authorization, consent or approval of, or permit
from, any governmental or regulatory body or authority, or any other person or
entity, is required to be made or obtained by Buyer in connection with the
execution, delivery and performance of this Agreement or the Ancillary
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Agreements and the consummation of the transactions contemplated hereby or
thereby, except (i) as may be required by Buyer to operate the Company's
business after the Closing, (ii) as has been obtained on or prior to the date
hereof, or (iii) as required under the HSR Act.
5.1.5 No Brokers. Neither Buyer nor any of its respective
officers, directors, or employees have employed or made any agreement with any
broker, finder or similar agent or any person or firm which will result in an
obligation to pay any finders fees, brokerage fees or commission or similar
payment in connection with the transactions contemplated hereby for which
Sellers or the Company will bear any responsibility.
5.1.6 Litigation. No legal action is pending or, to the
knowledge of Buyer, threatened against Buyer which seeks to delay, limit or
enjoin the transactions contemplated by this Agreement.
ARTICLE VI
GENERAL COVENANTS OF BUYER, THE COMPANY AND SELLERS
Buyer, the Company and Sellers each covenant with the others as
follows:
6.1 Further Assurances. Upon the terms and subject to the
conditions contained herein, each of the parties hereto agrees, both before and
after the Closing, (i) to use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement, (ii) to execute any documents, instruments or conveyances of any
kind which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, and (iii) to cooperate with each other in
connection with the foregoing, including using their respective reasonable
efforts (A) to obtain all necessary waivers, consents and approvals from third
parties; provided, however, that neither party shall be required to make any
material payments, commence litigation or agree to modifications of the terms of
Contracts in order to obtain any such waivers, consents or approvals, (B) to
obtain all necessary Permits as are required to be obtained under any federal,
state, local or foreign law or regulations, (C)to effect all necessary
registrations and filings, including without limitation required filings under
the HSR Act and all other submissions of information requested by governmental
authorities, and (D)to fulfill all conditions to this Agreement.
6.2 ESOP. The ESOP will be continued for the period of the ESOP
Escrow. At the election of the ESOP fiduciary, the ESOP may make distributions
to participants or, alternatively, enable them to transfer their interests into
individual retirement accounts, in each case net of ongoing administrative
expenses of the ESOP. All ESOP funds payable to participants or eligible for
rollover as provided above will be net of all indebtedness of the ESOP,
including the
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indebtedness totaling approximately $1 million to Sun Trust Bank of Southwest
Georgia, which shall be repaid at Closing.
6.3 Environmental Assessments and Remediation.
The Sellers and Buyer will enter into an environmental
agreement as of the date hereof, which is incorporated by reference herein (the
"Environmental Agreement").
ARTICLE VII
CONDUCT OF COMPANY AND BUYER PENDING THE CLOSING
7.1 Company and Seller Covenants. The Company and Sellers hereby
jointly and severally covenant and agree that from the date hereof to the
Closing Date:
7.1.1 Conduct of Business Pending the Closing. Except as
specifically contemplated in this Agreement or as disclosed in any schedule
hereto, the business of the Company shall be conducted only in, and the Company
shall take no action except in, the ordinary course, on an arm's length basis,
and in accordance in all material respects with all applicable laws, rules, and
regulations; and the Company shall maintain its Facilities and equipment in
accordance with past practices; and the Company will not, directly or
indirectly, and Sellers will not cause or permit the Company to:
(i) Cancel or terminate or permit to be canceled
or terminated its current insurance (or reinsurance) policies or permit any of
the coverage thereunder to lapse, unless simultaneous with such termination,
cancellation, or lapse, replacement policies providing coverage equal to or
greater than the coverage under the canceled, terminated, or lapsed policies are
in full force and effect;
(ii) Default under any material contract,
agreement, commitment, or undertaking;
(iii) Violate or fail to comply in any material
respect with any laws applicable to it;
(iv) Fail to maintain its assets and properties
in accordance with past practices and as required in any leases or other
agreements pertaining thereto;
(v) Enter into or modify any employment,
severance, or similar agreements or arrangements with, or grant any bonuses,
salary increases, or severance or termination pay to, any officers, directors,
consultants or, except in the ordinary course of
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business consistent with historical practices, employees, or adopt or amend any
bonus, profit sharing, compensation, stock option, pension, retirement, deferred
compensation, employment, or other benefit plan, trust, fund, or group
arrangement for the benefit or welfare of any officers, directors, or employees;
(vi) Directly or indirectly enter into or modify
any material contract, agreement, or understanding or enter into any transaction
not in the ordinary course of business;
(vii) Cancel, without full payment, any note,
loan, or other obligation owing to the Company, or waive or compromise any right
or claim except the write-off of accounts receivable in the ordinary course of
business;
(viii) Acquire (by merger, exchange, consolidation,
acquisition of stock or assets, or otherwise) any corporation, partnership,
joint venture, or other business organization or division or assets thereof;
(ix) Issue any shares of its capital stock, issue
or create any warrants, obligations, subscriptions, options, convertible
securities, or other commitments under which any additional shares of capital
stock or other securities may be issued, or effect any transfer of outstanding
shares of its capital stock, including shares of any class that might be
directly or indirectly authorized, issued, or transferred from treasury, or
otherwise permit the transfer of any outstanding shares of capital stock or
declare any dividends or distributions whether in cash, stock or other property;
(x) Incur any indebtedness for borrowed money or
issue any debt securities except the borrowing of working capital in the
ordinary course of business and consistent with past practice;
(xi) Pay any obligation or liability, fixed or
contingent, except in the ordinary course of business;
(xii) Enter into any transactions with any Seller
or any other Affiliate of the Company, including without limitation Chris-Mar,
Inc.;
(xiii) Commit or authorize the occurrence of any
event or the existence of any condition of the type described in Section 4.7
hereof;
(xiv) Commit or otherwise authorize the occurrence
of any of the actions described in the preceding clauses (i) through (xiii).
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7.1.2 Business Relationships. The Company will exercise its
reasonable efforts consistent with its past practice to preserve intact its
business organization and goodwill, keep available the services of its officers
and employees as a group, and maintain satisfactory relationships with
suppliers, distributors, customers, and others having business relationships
with it.
7.1.3 Notification of Certain Matters. The Company shall
(i) confer with representatives of Buyer on a regular basis as reasonably
requested by Buyer, (ii) promptly notify Buyer of any Material Adverse Change in
the normal course of its business or in the operation of its properties and of
any Actions or other governmental or third party complaints, investigations, or
hearings (or communications indicating that the same may be contemplated); and
(iii) promptly notify Buyer if the Company shall discover that any
representation or warranty made by it or the Sellers in this Agreement was when
made, or has subsequently become, untrue in any material respect or if it or
they have failed to or will fail to satisfy or perform in any material respect
any covenant or agreement of the Company or Sellers contained herein.
7.2 Certain Closing Covenants.
(a) Company and Buyer Covenants. Company shall use its
reasonable efforts to cause the conditions specified in Article IX hereof, and
Buyer shall use its reasonable efforts to cause the conditions specified in
Article VIII hereof, to be satisfied at or prior to the Closing Date.
(b) Sellers' Covenants. Sellers shall use their
respective reasonable efforts to (i) cause the conditions to Closing applicable
to them to be satisfied and (ii) to cause the Company to satisfy the conditions
to Closing applicable to it, in each case on or before the Closing Date.
7.3 No Negotiations. Neither the Company nor any Seller shall,
directly or indirectly, through any officer, director, agent, or otherwise,
solicit, initiate, or encourage submission of any proposal or offer from any
person or entity (including any of its or their officers or employees) relating
to the sale or other transfer or disposition of the Shares or any liquidation,
dissolution, recapitalization, merger, consolidation, or acquisition or purchase
of all or a portion of the assets (except sales of inventory in the ordinary
course of business) of, or any equity interest in, the Company or other similar
transaction or business combination involving the Company, or participate in any
negotiations regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with, or assist, participate in,
facilitate, or encourage, any effort or attempt by any other person or entity to
do or seek any of the foregoing. The Company and Sellers shall promptly notify
Buyer if any such proposal or offer, or any inquiry from or contact with any
person with respect thereto, is made and shall promptly provide Buyer with such
information regarding such proposal, offer, inquiry, or contact as Buyer may
request.
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7.4 Public Announcements. The parties hereto shall not issue any
press release or public announcement, including announcements by any party for
general reception by or dissemination to employees, agents, or customers, with
respect to this Agreement and the other transactions contemplated by this
Agreement without the prior written consent of the other parties hereto (which
consent shall not be withheld unreasonably); provided, however, that Buyer may
make any disclosure or announcement of information it is obligated to make
pursuant to applicable law or regulation, including any applicable law or
regulation of the Nasdaq Stock Market or any other national securities exchange
or self regulatory organization, as applicable; provided, further, however, that
the Company will have the opportunity to review and provide comments on any such
disclosure or announcement prior to its release; and provided further, that
Sellers and the Company acknowledge that Buyer is in the process of securing
financing for the transaction and has made and will make disclosures to
prospective lenders, security holders, bankers, rating agencies and their agents
regarding the transaction and the Company.
7.5 Confidentiality. The parties shall continue to be bound by
that Confidentiality Agreement dated October 30, 1997. Notwithstanding the
foregoing, the Sellers and the Company consent to the dissemination of relevant
information regarding the Company to facilitate financing the transaction
contemplated hereby, provided the recipients thereof are bound by appropriate
obligations of confidentiality.
ARTICLE VIII
CONDITIONS TO SELLERS' OBLIGATIONS
The obligations of Sellers to consummate the transactions provided for
hereby are subject to the satisfaction, on or prior to the Closing Date, of each
of the following conditions, any of which may be waived by Sellers:
8.1 Representations, Warranties and Covenants. All representations
and warranties of Buyer contained in this Agreement shall be true and correct in
all material respects at and as of the date of this Agreement and at and as of
the Closing Date, except as and to the extent that the facts and conditions upon
which such representations and warranties are based are expressly required or
permitted to be changed by the terms hereof, and Buyer shall have performed and
satisfied in all material respects all agreements and covenants required hereby
to be performed by it prior to or on the Closing Date.
8.2 No Proceedings, Litigation or Laws. No Action by any
governmental authority or other person shall have been instituted or threatened
which questions the validity or legality of the transactions contemplated hereby
and which could reasonably be expected to materially damage Sellers if the
transactions contemplated hereunder are consummated. The waiting period under
the HSR Act shall have expired or been terminated.
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8.3 Certificates. Buyer shall furnish Sellers with such
certificates of Buyer to evidence compliance with the conditions set forth in
this Article VIII as may be reasonably requested by Sellers.
8.4 Ancillary Agreements. Buyer shall have executed and delivered
the Ancillary Agreements to which it is a party.
8.5 Opinion Letter of Buyer's Attorneys. Sellers shall receive an
opinion of Snell & Wilmer L.L.P., counsel for Buyer, dated as of the Closing
Date, in form and substance reasonably satisfactory to Sellers, to the effect
that:
8.5.1 Incorporation. Buyer has been duly incorporated and
is validly existing and in good standing under the laws of the State of Delaware
with corporate power to own or lease its properties and to carry on its business
as now conducted.
8.5.2 Corporate Power and Authority. Buyer has the
necessary corporate power and authority to enter into this Agreement (including
the Environmental Agreement) and the Ancillary Agreements to which it is a party
and to consummate the transactions contemplated thereby. The execution, delivery
and performance of this Agreement (including the Environmental Agreement) and
the Ancillary Agreements to which it is a party have been duly authorized by
Buyer, and the Agreement and the Ancillary Agreements have been duly executed
and delivered by Buyer.
8.5.3 Corporate Action. The Agreement (including the
Environmental Agreement) and the Ancillary Agreements to which it is a party
constitute the legally valid and binding obligation of Buyer enforceable against
Buyer in accordance with its terms, except as limited by (i) bankruptcy,
insolvency, reorganization, moratorium, or other similar laws relating to
creditors' rights generally or by equitable principles (whether considered in an
action at law or in equity), (ii) limitations imposed by federal or applicable
state law or equitable principles upon the availability of specific performance,
injunctive relief, or other equitable remedies, and (iii) other customary
exceptions to enforceability.
8.5.4 No Permits Required. No Permit or filing with or
consent of any governmental authority or any other person is required for the
execution and delivery of this Agreement (including the Environmental Agreement)
or the Ancillary Agreements by Buyer or the consummation of the transactions
contemplated hereby or thereby, except such as have been obtained or the failure
to obtain would not materially adversely affect Buyer's ability to consummate
the transactions contemplated hereby.
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8.6 Buyer Corporate Documents. Buyer shall have delivered to
Sellers a copy of its Certificate of Incorporation certified by the Delaware
Secretary of State, a good standing certificate dated not more than ten days
prior to Closing by the Delaware Secretary of State and a copy of the
resolutions adopted by Buyer in connection with this Agreement, certified by its
corporate secretary.
8.7 Environmental Agreement. Sellers and Buyer shall have
satisfied all conditions to the Environmental Agreement required to be satisfied
prior to the Closing and Buyer shall have delivered to Sellers the Environmental
Certificate and shall have agreed with Sellers to work plans on or prior to the
Closing, each as contemplated by the Environmental Agreements.
ARTICLE IX
CONDITIONS TO BUYER'S OBLIGATIONS
The obligations of Buyer to consummate the transactions provided for
hereby are subject, in the discretion of Buyer, to the satisfaction, on or prior
to the Closing Date, of each of the following conditions, any of which may be
waived by Buyer:
9.1 Representations, Warranties and Covenants. All representations
and warranties of Sellers and the Company contained in this Agreement shall be
true and correct in all material respects at and as of the date of this
Agreement and at and as of the Closing Date, except as and to the extent that
the facts and conditions upon which such representations and warranties are
based are expressly required or permitted to be changed by the terms hereof, and
Sellers and the Company shall have performed and satisfied in all material
respects all agreements and covenants required hereby to be performed by them
prior to or on the Closing Date.
9.2 Consents. All Permits and waivers necessary to the
consummation of the transactions contemplated hereby and for the continued
operation of the business after the Closing by Buyer shall have been obtained
including, without limitation (i) all required third party consents, (ii) all
required approvals of Buyer's lenders, and (iii) the waiting period under the
HSR Act shall have expired or been terminated.
9.3 No Proceedings or Litigation. No Action by any governmental
authority or other person shall have been instituted or threatened which
questions the validity or legality of the transactions contemplated hereby and
which could reasonably be expected to damage Buyer if the transactions
contemplated hereby are consummated, including without limitation any limitation
or restriction on the right or ability of the Buyer to own or transfer the
Shares or of the Company to own, possess or transfer its assets after the
Closing. There shall not be any statute, rule or
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regulation that makes the purchase and sale of the Shares or the Company
contemplated hereby illegal or otherwise prohibited.
9.4 Opinions of Counsel. The Company shall have delivered to Buyer
opinions of King & Spalding, with respect to the Company and Mr. Addison, and of
counsel acceptable to Buyer with respect to the ESOP, as applicable, dated as of
the Closing Date, in form and substance reasonably satisfactory to Buyer, to the
effect that:
9.4.1 Incorporation. The Company and its Subsidiaries are
validly existing and in good standing under the laws of their respective states
of incorporation.
9.4.2 Corporate Power and Authority. The Company and the
Subsidiaries have the necessary corporate power and authority to enter into this
Agreement (including the Environmental Agreement) and the Ancillary Agreements
to which it is a party and to consummate the transactions contemplated hereby
and thereby and to own, lease and operate their assets and properties and to
conduct their businesses as presently conducted.
9.4.3 Corporate Action. The execution, delivery and
performance of this Agreement (including the Environmental Agreement) and the
Ancillary Agreements to which the Company, any Subsidiary or ESOP is a party
have been duly authorized by all necessary corporate or other action, and this
Agreement and the Ancillary Agreements have been duly executed and delivered by
the Company, the Subsidiaries, Mr. Addison or the ESOP, as applicable.
9.4.4 Obligation of the Company or Sellers. This Agreement
(including the Environmental Agreement) and each Ancillary Agreement constitutes
a legally valid and binding obligation of the Company, the Subsidiaries, Mr.
Addison or the ESOP, as applicable, enforceable against the Company, the
Subsidiaries, Mr. Addison or the ESOP in accordance with its terms, except as
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to creditors' rights generally or by equitable principles
(whether considered in an action at law or in equity), (ii) limitations imposed
by federal or applicable state law or equitable principles upon the availability
of specific performance, injunctive relief or other equitable remedies, and
(iii) other customary exceptions to enforceability.
9.4.5 No Breach. Neither the execution and delivery of this
Agreement (including the Environmental Agreement) or the Ancillary Agreements by
the Company, the Subsidiaries, Mr. Addison or the ESOP, as applicable, nor the
consummation of the transactions contemplated hereby or thereby will violate or
conflict with any provision of the Articles of
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Incorporation or Bylaws of the Company or any Subsidiary, or of the charter
documents, trust or other organizational or governing instruments or documents
of the ESOP.
9.4.6 No Permits Required. No Permit or filing with or
consent of any governmental authority or any other person is required for the
execution and delivery of this Agreement (including the Environmental Agreement)
or the Ancillary Agreements by the Company, the Subsidiaries, Mr. Addison or the
ESOP, as applicable, or the consummation by the Company, the Subsidiaries, or
the Sellers of the transactions contemplated hereby or thereby, except such as
have been obtained or the failure to obtain would not materially adversely
affect the Company's or the Sellers' ability to consummate the transactions
contemplated hereby or thereby.
9.4.7 No Actions Pending. To the knowledge of such counsel,
except as set forth in this Agreement or the Schedules hereto, no litigation or
arbitration proceeding is pending (i) against the Company or its Subsidiaries,
or (ii) against any of the officers or directors of the Company or its
Subsidiaries as such, or against any trustee or other fiduciary of any Seller
that is not a natural person.
9.4.8 No Violation of Law. Neither the execution and
delivery of this Agreement (including the Environmental Agreement), the ESOP
Escrow Agreement, the Environmental Escrow Agreement or any Ancillary Agreement
by the Company, the Subsidiaries, Mr. Addison or the ESOP, as applicable, nor
the consummation of the transactions contemplated hereby or thereby will violate
or result in a failure to comply with any statute, law, ordinance, regulation,
rule or, to the knowledge of such counsel, order of any federal or state
government or any other federal or state governmental department or agency, or
any judgment, decree or order of any court known to such counsel to be
applicable to the Company, the Subsidiaries, Mr. Addison or the ESOP.
9.4.9 Title to Shares. Based upon a review of the Company's
Articles of Incorporation and stock ledger, the authorized capital stock of the
Company consists solely of 100,000 shares of common stock, $5.00 par value per
share, and the issued and outstanding common stock of the Company consists
solely of the Shares, all of which, according to the Company's stock ledger, are
owned of record by the Sellers, and, to the knowledge of such counsel, free and
clear of all Encumbrances other than restrictions on transfer imposed by the
federal and state securities laws. To the knowledge of such counsel, based upon
review of applicable stock ledgers, the Company owns all of the capital stock of
the Subsidiaries, free and clear of all Encumbrances other than restrictions on
transfer imposed by federal and state securities laws. To the knowledge of such
counsel, there are no outstanding warrants, options or other rights to acquire,
or securities convertible into or exercisable or exchangeable for, shares of
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<PAGE> 50
capital stock of the Company or any Subsidiary, nor any commitments or
agreements by the Company or any Subsidiary to issue any such rights or
securities or shares of capital stock.
9.4.10 Other Opinions. Such other opinions as any financing
source to Buyer may reasonably request and as are customarily provided in
transactions of this nature, and such persons shall be entitled to rely upon the
opinions of Sellers' counsel hereunder.
9.5 Certificates. Sellers and the Company shall furnish Buyer with
such certificates of Sellers, the officers of the Company and others to evidence
compliance with the conditions set forth in this Article IX as may be reasonably
requested by Buyer.
9.6 Ancillary Agreements. The ESOP, Mr. Addison, Glen Davis, Sam
Mahdavi and Mike Phagans, as appropriate, shall have entered into the Ancillary
Agreements.
9.7 Release of Encumbrances. The Company shall have filed or
recorded (where necessary) and delivered to Buyer all documents necessary to
release the Shares and assets of the Company from all Encumbrances (except for
Encumbrances permitted under Section 4.9), which documents shall be in a form
reasonably satisfactory to Buyer's counsel.
9.8 No Material Changes. Except as otherwise approved by Buyer,
there shall not have been any Material Adverse Change in the Company since the
date of this Agreement, except changes in condition having an industry-wide
effect.
9.9 Corporate/Fiduciary Documents. Buyer shall have received from
the Company resolutions adopted by its board of directors and from the ESOP such
documents as it reasonably deems appropriate approving this Agreement and the
Ancillary Agreements to which it is a party, and the transactions contemplated
hereby and thereby.
9.10 Environmental Agreement. Sellers and Buyer shall have
satisfied all conditions in the Environmental Agreement required to be satisfied
prior to the Closing and Buyer shall have delivered to Sellers the Environmental
Certificate and shall have agreed with Sellers to work plans on or prior to the
Closing, each as contemplated by the Environmental Agreement.
9.11 Financing. Seller, the Company, their counsel and accountants
shall have provided such materials, opinions or certificates as reasonably
requested by Buyer and as are customarily provided in transactions of this
nature to facilitate financing of the transaction contemplated hereby.
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<PAGE> 51
9.12 Financial Statement Deliveries. The Company shall have
provided Buyer with (a) consolidated audited and unaudited interim financial
statements that satisfy applicable regulations of the Securities and Exchange
Commission ("SEC"), and the Company's independent accountants shall have agreed
to consent to inclusion of their reports on such audited financial statements in
the filings made by Buyer with the SEC and to deliver appropriate "comfort
letters", and (b) the Closing Date Balance Sheet. The financial statements
described in subsection (b) shall be subject to the representations and
warranties of Section 4.6 of this Agreement.
9.13 Chris-Mar, Inc. All agreements and arrangements, whether
written or oral, by and between the Company and any of its Affiliates, on the
one hand, and Chris-Mar, Inc. and its subsidiaries and Affiliates, on the other
hand, shall have been terminated on terms and conditions reasonably acceptable
to Buyer, all amounts payable by or to either party by the other will have been
paid and fully settled, all rights and assets of Chris-Mar, Inc. related to the
business that Chris-Mar, Inc. conducted on behalf of the Company shall have been
transferred to the Company, and all inventory purchased by Chris-Mar, Inc. for
the Company shall be in the possession of the Company and appropriately
accounted for.
9.14 Mahdavi Option. Arrangements suitable to the parties shall
have been made between the Company and Sam Mahdavi to extinguish stock options
currently held by him to acquire ten percent of the capital stock of Quincy
Joist Company (the "Mahdavi Option"), at no post-closing cost or obligation to
the Company (including any Subsidiary) or Buyer.
9.15 Affiliate Loans. All indebtedness owed to the Company by any
Seller, or Affiliates of the Company or Sellers, shall have been paid and
satisfied in full.
9.16 Affiliate Transactions. Each of the transactions and
agreements described in Sections 12.1 and 12.2 shall have been agreed to on
terms and conditions acceptable to the parties.
9.17 Resignations. Except as provided in the Ancillary Agreements,
the officers and directors of the Company (including its Subsidiaries) shall
have resigned from such offices, and the officers and directors shall have
released the Company from all liabilities up through Closing.
9.18 Repayment of Indebtedness. All long-term debt of the Company
and the ESOP shall have been repaid and all pledges and guaranties related
thereto shall have been released, or will be repaid and released concurrently
with the Closing.
9.19 Real Property. Buyer shall be satisfied with the status of
title to and zoning of the Real Property.
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<PAGE> 52
9.20 Spousal Release. The spouse of Mr. Addison shall have
acknowledged that, or Buyer shall have received the opinion of King & Spalding
to the effect that, she has no interest in the Shares, the Company or any
Subsidiary, or their respective properties and assets.
9.21 Escrow. The Escrow Agreement shall have been entered into
among the Buyer, the ESOP, and the Escrow Agent.
9.22 Sale of Non-Business Assets. The Bullard Note, Mahdavi Note
and the Smith Note shall have been paid off or sold at the remaining principal
amount together with all accrued interest, fees and costs.
ARTICLE X
RISK OF LOSS; CONSENTS TO ASSIGNMENT
10.1 Risk of Loss. From the date hereof through the Closing, all
risk of loss or damage to the Company, its business or assets shall be borne by
the Company. If any material portion of the property is destroyed or damaged by
fire or any other cause on or prior to the Closing, other than use, wear or loss
in the ordinary course of business, the Company shall give written notice to
Buyer as soon as practicable after discovery of such damage or destruction, the
amount of insurance, if any, covering such property and the amount, if any,
which the Company is otherwise entitled to receive as a consequence. Prior to
the Closing, Buyer shall have the option, which shall be exercised by written
notice to the Company within ten (10) calendar days after receipt of the
Company's notice or if there is not ten (10) calendar days prior to the Closing,
as soon as practicable prior to the Closing, of (a) accepting the business in
its destroyed or damaged condition in which event Buyer shall be entitled to the
proceeds of any insurance or other proceeds payable with respect to such loss
and to such indemnification for any uninsured portion of such loss pursuant to
Section 11.2.1, and the full Purchase Price shall be paid for such Company, (b)
reducing the Purchase Price by the amount allocated to such business or
property, as mutually agreed between the parties or (c) terminating this
Agreement in accordance with Section 13. If Buyer acquires the Shares, then
after the Closing any insurance or other proceeds shall belong to the Company.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
11.1 Survival of Representations, Etc. The representations,
warranties, covenants and agreements of Sellers, the Company, and Buyer
contained in this Agreement and the certificates delivered hereunder shall
survive the consummation of the transactions contemplated hereby and the Closing
Date, without regard to any investigation made by any of the parties hereto;
provided, however, the representations and warranties of the Company shall
terminate as of the Closing.
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<PAGE> 53
* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
[*] There shall be no limitation in respect of any Claim based upon fraud or
intentional misrepresentation or omission. The termination of the
representations and warranties provided herein shall not affect the rights of a
party in respect of any Claim made by such party in a writing received by the
other party prior to the expiration of the applicable survival period provided
herein.
11.2 Indemnification.
11.2.1 By Sellers. Sellers shall indemnify, defend, save and
hold harmless Buyer, its Affiliates and subsidiaries (including the Company from
and after the Closing Date), and its and their respective Representatives, from
and against any and all claims, damages, costs, losses (including without
limitation diminution in value), Taxes, liabilities, judgments, penalties,
fines, obligations, lawsuits, deficiencies, demands and expenses (whether or not
arising out of third-party claims), including without limitation interest,
penalties, costs of mitigation, clean-up or remedial action), lost profits and
other losses resulting from any shutdown or curtailment of operations, damages
to the environment, attorneys' fees, experts' fees and all amounts paid in
investigation, defense, audit or settlement of any of the foregoing, net of any
insurance payments under the Company's insurance policies in effect at or prior
to the Closing with respect thereto (herein, "Damages"), incurred in connection
with, arising out of, resulting from or incident to (i) any inaccuracy of any
representation or warranty, made by the Company or Sellers in this Agreement or
in any agreement or certificate delivered hereunder; (ii) any breach of any
covenant or agreement made by the Company or Sellers in this Agreement or any
agreement or certificate delivered hereunder; (iii) the Actions disclosed in
Schedule 4.15 to the extent that Damages exceed recoveries; or (iv) the Former
Property and Plantation Assets.
11.2.2 By Buyer. Buyer shall indemnify and save and hold
harmless Sellers, their Affiliates (other than the Company) and their
Representatives from and against any and all Damages incurred in connection
with, arising out of, resulting from or incident to (i) the inaccuracy of any
representation or warranty made by Buyer in this Agreement or in any
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<PAGE> 54
agreement or certificate delivered hereunder; or (ii) any breach of any covenant
or agreement made by Buyer in this Agreement or any agreement or certificate
delivered hereunder.
11.2.3 Cooperation. In connection with third party Actions,
the indemnified party shall cooperate in all reasonable respects with the
indemnifying party and such attorneys in the investigation, trial and defense of
such Action and any appeal arising therefrom; provided, however, that the
indemnified party may, at its own cost (except as provided in Section 11.2.5
hereof), participate in the investigation, trial and defense of such Action and
any appeal arising therefrom. The parties shall cooperate with each other in any
notifications to insurers.
11.2.4 Defense of Claims. If a claim for Damages (a "Claim")
is to be made by a party entitled to indemnification hereunder against the
indemnifying party, the party claiming such indemnification shall give written
notice (a "Claim Notice") to the indemnifying party as soon as practicable after
the party entitled to indemnification becomes aware of any fact, condition or
event which may give rise to Damages for which indemnification may be sought
here under. The Claim Notice shall include the amounts the indemnified party
believes in good faith are subject to indemnification and a brief basis of the
claim. The indemnified party may revise its estimate of any claim by notice to
the other party.
11.2.5 Third Party Claims. If any Action is filed against
any party entitled to the benefit of indemnity hereunder, written notice thereof
shall be given to the indemnifying party as promptly as practicable (and in any
event within fifteen (15) calendar days after the service of the citation or
summons). The failure of any indemnified party to give timely notice hereunder
shall not affect rights to indemnification hereunder, except to the extent that
the indemnifying party demonstrates actual damage caused by such failure. After
such notice, if the indemnifying party shall acknowledge in writing to the
indemnified party that the indemnifying party shall be obligated under the terms
of its indemnity hereunder in connection with Action, then the indemnifying
party shall be entitled, if it so elects, (i) to take control of the defense and
investigation of Action, (ii) to employ and engage attorneys of its own choice
(which shall be reasonably acceptable to the indemnified party) to handle and
defend the same, at the indemnifying party's cost, risk and expense unless the
named parties to such Action include both the indemnifying party and the
indemnified party and the indemnified party has been advised in writing by
counsel that there may be one or more legal defenses available to such
indemnified party that are different from or additional to those available to
the indemnifying party, in which case the indemnified party shall be able to
retain its own counsel at the reasonable expense of the indemnifying party), and
(iii) to compromise or settle such Action, which compromise or settlement shall
be made only with the written consent of the indemnified party, such consent not
to be unreasonably withheld; provided, however, if the remediation or resolution
of any such Action will occur on or at any Facility or is reasonably expected to
have a Material Adverse Effect on the indemnified party's business operations,
then, notwithstanding the foregoing, the
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<PAGE> 55
* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
indemnified party shall be entitled to control such remediation or resolution,
including without limitation to take control of the defense and investigation of
such Action, to employ and engage attorneys of its own choice to handle and
defend the same, at the indemnifying party's cost, risk and expense, and to
compromise or settle such Action. If the indemnifying party fails to assume the
defense of such Action within fifteen (15) calendar days after receipt of the
written notice, the indemnified party against which such Action has been
asserted will (upon delivering notice to such effect to the indemnifying party)
have the right to undertake, at the indemnifying party's cost and expense, the
defense, compromise or settlement of such Action on behalf of and for the
account and risk of the indemnifying party. In the event the indemnified party
assumes the defense of the Action, the indemnified party will keep the
indemnifying party reasonably informed of the progress of any such defense,
compromise or settlement. Pursuant to Sections 11.2.1 or 11.2.2, as applicable,
the indemnifying party shall be liable for any settlement of any Action effected
pursuant to and in accordance with this Section 11.2.5 and for any final
judgment (subject to any right of appeal).
11.2.6 Limits on Indemnity and Rights of Offset.
(i) [*] Notwithstanding the preceding
sentence, the foregoing limitation shall not apply with respect to (A) Claims
arising out of a breach of a representation or warranty contained in Sections
4.5, 4.9, 4.10.2, 4.21 and (with regard to the Former Property and the Pinewood
Assets) 4.24, (B) any Claims based on fraud or intentional misrepresentation or
omission of any Seller or the Company (collectively, the "Excluded Claims"), or
(C) the Purchase Price adjustments set forth in Section 2.4.
(ii) All claims by Buyer for indemnification and
Purchase Price adjustments against Sellers shall be satisfied first by set off
against the outstanding principal amount of the Holdback Note and the ESOP
Escrow. [*]
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(iii) Subject to the last sentence of Section
13.13, the indemnification provided for in this Article XI and the provisions of
the Environmental Agreement are the sole remedies available to Buyer for claims
against Sellers arising out of the transactions contemplated by this Agreement.
ARTICLE XII
ACTIONS BY SELLERS AND BUYER AFTER THE CLOSING
12.1 Automobiles. Immediately after the Closing, Mr. Addison shall
purchase the five (5) automobiles listed on Schedule 12.1 for an aggregate
purchase price of $92,500, plus any sales, use, exercise, transaction privilege
or similar tax imposed thereon.
12.2 Pinewood Plantation. Immediately after the Closing, the
Company shall sell to Mr. Addison, and Mr. Addison shall acquire from the
Company, all of the assets, properties, and liabilities (on and off balance
sheet, absolute, accrued, contingent or otherwise, including without limitation
Tax and environmental) comprising and related to the Company's Pinewood
Plantation facility and related farm equipment located in Albany, Georgia (the
"Plantation Assets"), at a purchase price equal to $2.78 million. Attached
hereto as Schedule 12.2 is a related depreciation schedule. The purchase price
shall be paid in cash or other immediately available funds. The Company shall
sell and transfer the Plantation Assets to Mr. Addison "as is" and without any
representations or warranties. Mr. Addison hereby agrees to indemnify, hold
harmless and defend the Buyer for any tax or other liabilities arising out of
the sale of the automobiles or Plantation Assets, as described in Section 12.1
and 12.2.
ARTICLE XIII
MISCELLANEOUS
13.1 Termination. This Agreement may be terminated at any time
prior to Closing:
13.1.1 By mutual written consent of Buyer and the Sellers;
13.1.2 By Buyer or Sellers if the Closing shall not have
occurred on or before June 14, 1998; provided, however, that this provision
shall not be available to Buyer if Sellers have the right to terminate this
Agreement under Section 13.1.4, and this provision shall not be available to
Sellers if Buyer has the right to terminate this Agreement under Section 13.1.3;
13.1.3 By Buyer if there is a material breach of any
representation or warranty of Sellers or the Company of any covenant or
agreement to be complied with or performed by Sellers or the Company pursuant to
the terms of this Agreement or the failure of a condition set forth in Article
IX to be satisfied (and such condition is not waived in writing by Buyer) on or
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<PAGE> 57
prior to the Closing Date, or the occurrence of any event which results or would
result in the failure of a condition set forth in Article IX to be satisfied on
or prior to the Closing Date, provided that Buyer may not terminate this
Agreement prior to the Closing if Sellers or the Company have not had an
adequate opportunity to cure such failure by such time; or
13.1.4 By Sellers if there is a material breach of any
representation or warranty set forth in Article V hereof or of any covenant or
agreement to be complied with or performed by Buyer pursuant to the terms of
this Agreement or the failure of a condition set forth in Article VIII to be
satisfied (and such condition is not waived in writing by Sellers) on or prior
to the Closing Date, or the occurrence of any event which results or would
result in the failure of a condition set forth in Article VIII to be satisfied
on or prior to the Closing Date; provided that Sellers may not terminate this
Agreement prior to the Closing Date if Buyer has not had an adequate opportunity
to cure such failure by such time.
13.2 In the Event of Termination. In the event of termination of
this Agreement:
13.2.1 Each party will redeliver all documents, work papers
and other material of any other party relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to the party
furnishing the same; and
13.2.2 No party hereto shall have any liability or further
obligation to any other party to this Agreement, except as stated in Sections
7.5 or this Section 13.2.2, and except for any willful breach of this Agreement
occurring prior to the proper termination of this Agreement. The foregoing
provisions shall not limit or restrict the availability of specific performance
or other injunctive or other equitable relief to the extent that specific
performance or such other relief would otherwise be available to a party
hereunder.
13.3 Cooperation and Records Retention. Sellers, the Company and
Buyer shall (i) each provide the other with such assistance as may reasonably be
requested by any of them in connection with the preparation of any Tax Return,
audit, or other examination by any taxing authority or judicial or
administrative proceedings relating to liability for Taxes, (ii) each retain and
provide the other with any records or other information that may be relevant to
any such Tax Return, audit or examination, proceeding or determination, and
(iii) each provide the other with any final determination of any such audit or
examination, proceeding, or determination that affects any amount required to be
shown on any Tax Return of the other for any period.
13.4 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party without the prior written
consent of the other parties; except that Parent or Buyer may, without such
consent, assign all such rights to any lender as collateral security, and Buyer
may assign all such rights and obligations to a wholly-owned subsidiary or
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subsidiaries of Buyer (or a partnership controlled by Buyer) which shall assume
all obligations and liabilities of Buyer under this Agreement. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, and,
except pursuant to Article XI, no other person shall have any right, benefit or
obligation under this Agreement as a third party beneficiary or otherwise.
13.5 Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic or
digital transmission method; the day after it is sent, if sent for next day
delivery to a domestic address by recognized overnight delivery service (e.g.,
Federal Express); and upon receipt, if sent by certified or registered mail,
return receipt requested. In each case notice shall be sent to:
If to the Company, addressed to:
Addison Structural Services, Inc.
1920 Ledo Road
P.O. Box 3629
Albany, Georgia 31706
with a copy to:
Michael J. Egan III Esq.
King & Spalding
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1763
If to Sellers, addressed to:
Mr. E.C. Addison
112 Hidden Lakes Drive
Albany, Georgia 31707
with a copy to:
Michael J. Egan III, Esq.
King & Spalding
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1763
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<PAGE> 59
If to ESOP, addressed to:
Addison Structural Services, Inc. Leveraged
Employee Stock Ownership Plan
Attn: Mr. Glenn A. Kirbo
Kirbo, Kirbo & Finney
1111 Eighth Avenue
Albany, Georgia 31707
If to Buyer, addressed to:
Mr. Scott A. Schuff
President and Chief Executive Officer
Schuff Steel Company
420 South 19th Avenue
Phoenix, Arizona 85009
with a copy to:
Steven D. Pidgeon, Esq.
Snell & Wilmer, L.L.P.
One Arizona Center
Phoenix, Arizona 85004
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
13.6 Choice of Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the laws of the
State of Georgia (without reference to the choice of law provisions thereof),
except with respect to matters of law concerning the internal affairs of any
person (other than a natural person) which is a party to or the subject of this
Agreement, and as to those matters the law of the jurisdiction under which the
respective person derives its powers shall govern.
13.7 Entire Agreement; Amendments and Waivers. This Agreement,
together with all exhibits and schedules hereto and the Ancillary Agreements,
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the parties. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto. No amendment, supplement, modification or waiver of this
Agreement shall be
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<PAGE> 60
binding unless executed in writing by the party to be bound thereby. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.
13.8 Multiple Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
13.9 Expenses. Except as otherwise specified in this Agreement,
each party hereto shall pay its own legal, accounting, out-of-pocket and other
expenses incident to this Agreement and to any action taken by such party in
preparation for carrying this Agreement into effect. All such expenses of the
ESOP, in addition to those related to its administration and termination, shall
be borne by the ESOP.
13.10 Invalidity. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
13.11 Titles. The titles, captions or headings of the Articles,
Sections and subsections herein are inserted for convenience of reference only
and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement.
13.12 Cumulative Remedies. Subject to provisions of Article XI and
Section 13.13, all rights and remedies of either party hereto are cumulative of
each other and of every other right or remedy such party may otherwise have at
law or in equity, and the exercise of one or more rights or remedies shall not
prejudice or impair the concurrent or subsequent exercise of other rights or
remedies. Nothing herein shall limit a party's rights to seek equitable relief,
including specific performance or injunctive relief, or limit Buyer's rights or
remedies under the confidentiality and non-compete provisions of the Consulting
and Noncompetition Agreement.
13.13 Arbitration. Except as specifically provided herein, any
controversy arising after the Closing out of or relating to this Agreement
(excluding for purposes of this Section 13.13, the Employment and Consulting and
Non-Competition Agreements, forms of which are attached as Exhibits hereto), or
relating to the breach hereof, shall be settled by arbitration conducted in
Kansas City, Missouri in accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect (except as otherwise expressly
provided in this Agreement). The award rendered by the arbitrator(s) shall be
final and judgment upon the award rendered by
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<PAGE> 61
the arbitrator(s) may be entered upon it in any court having jurisdiction
thereof. The arbitrator(s) shall possess the powers to issue mandatory orders
and restraining orders in connection with such arbitration. The expenses of the
arbitration shall be borne by the losing party unless otherwise allocated by the
arbitrator(s). The agreement to arbitrate shall be specifically enforceable
under the prevailing arbitration law. During the continuance of any arbitration
proceedings, the parties shall continue to perform their respective obligations
under this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed on their respective behalf, where appropriate by
their respective officers or fiduciaries thereunto duly authorized, all as of
the day and year first above written.
Addison Structural Services, Inc.
By:__________________________________
Name:________________________________
Its:_________________________________
(the "Company")
Schuff Steel Company
By:__________________________________
Name:________________________________
Its:_________________________________
("Buyer")
_____________________________________
E. C. Addison
Addison Structural Services, Inc. Leveraged
Employee Stock Ownership Plan
By:__________________________________
Its:_________________________________
("Sellers")
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<PAGE> 63
SCHEDULES
<TABLE>
<S> <C>
List of Subsidiaries .......................................... 4.2
Capital Stock ................................................. 4.2
Authorization ................................................. 4.3
No Violation; Consents ........................................ 4.4
Capitalization ................................................ 4.5
Financial Statements .......................................... 4.6
No Change in the Assets ....................................... 4.7
Assets; Absence of Encumbrances ............................... 4.9
Description ................................................... 4.10
Title ......................................................... 4.10
Leases ........................................................ 4.10.3
No Unpaid Charges ............................................. 4.10
Receivables ................................................... 4.11
Contracts ..................................................... 4.13
Litigation .................................................... 4.15
Labor Matters ................................................. 4.16
Compliance with Laws .......................................... 4.17
No Brokers .................................................... 4.18
Proprietary Rights ............................................ 4.20
Royalties and Licenses ........................................ 4.20
Filing of Tax Returns; Payment of Taxes ....................... 4.21.1
Taxing Jurisdictions .......................................... 4.21.2
General Tax Matters ........................................... 4.21.3
Tax Attributes ................................................ 4.21.4
Copies of Tax Returns ......................................... 4.21.5
Employees and Employee Benefits ............................... 4.22
Compliance With Environmental Laws ............................ 4.24
Permits ....................................................... 4.24
Environmental Conditions ...................................... 4.24
Storage Tank .................................................. 4.24
Environmental Audits or Assessments ........................... 4.24
Notices, Warnings and Records ................................. 4.24.19
Former Property ............................................... 4.24.20
Insurance ..................................................... 4.25
Affiliate Transactions ........................................ 4.26
</TABLE>
* The registrant hereby agrees to furnish the above Schedules to the Securities
and Exchange Commission upon request.
<PAGE> 1
Exhibit 2.2
AMENDMENT TO STOCK PURCHASE AGREEMENT
By this Amendment to that Stock Purchase Agreement dated May 12, 1998
among the parties listed below, the parties agree that cash payments due at
Closing will be funded immediately following closing of the Rule 144A bond
offering of Schuff Steel Company that is expected to close immediately
following closing of the Purchase Agreement, and that the Purchase Agreement
will be deemed to be closed immediately prior to the bond offering,
notwithstanding the fact that proceeds of the bond offering will be utilized to
fund closing payments under the Stock Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed on their respective behalf, where appropriate by
their respective officers or fiduciaries thereunto duly authorized, as of June
1, 1998.
Schuff Steel Company
By:
-------------------------------
Name:
-----------------------------
Its:
-----------------------------
("Buyer")
Addison Structural Services, Inc.
By:
-------------------------------
Name:
-----------------------------
Its:
-----------------------------
(the "Company")
-----------------------------------
E.C. Addison
Addison Structural Services, Inc.
Leveraged Employee Stock Ownership Plan
By:
-------------------------------
Its:
-----------------------------
("Sellers")
<PAGE> 1
Exhibit 2.3
AMENDMENT NO. 2 TO STOCK PURCHASE AGREEMENT
By this Amendment No. 2 to that Stock Purchase Agreement dated May 12, 1998
among the parties listed below, the parties acknowledge and agree that:
1. The Letter of Credit to be issued pursuant to the Purchase Agreement was
to permit blocking notices, consistent with Buyer's offset rights against the
Holdback Note.
2. The issuer of the Letter of Credit (Wells Fargo Bank, National
Association) does not permit blocking notices in respect of credit that it
issues.
3. The lack of blocking notices permitted under the Letter of Intent does
not in any respect amend or modify Buyer's offset rights.
4. Sellers agree not to draw upon the Letter of Credit to the extent that
there are pending or resolved claims pursuant to the Holdback Note that are
appropriately subject to offset or potential offset under the Stock Purchase
Agreement and Holdback Note.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed on their respective behalf, where appropriate by
their respective officers or fiduciaries thereunto duly authorized, as of June
4, 1998.
Schuff Steel Company
By:___________________________________
Name:_________________________________
Its:__________________________________
("Buyer")
Addison Structural Services, Inc.
By:___________________________________
Name:_________________________________
Its:__________________________________
(the "Company")
_______________________________________
E. C. Addison
Addison Structural Services, Inc. Leveraged
Employee Stock Ownership Plan
By:___________________________________
Its:__________________________________
("Sellers")
<PAGE> 1
Exhibit 10.1
SCHUFF STEEL COMPANY
AND ITS SUBSIDIARY GUARANTORS
$100,000,000
10 1/2% SENIOR NOTES DUE 2008
PURCHASE AGREEMENT
JUNE 1, 1998
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
JEFFERIES & COMPANY, INC.
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
<PAGE> 2
$100,000,000
10 1/2% SENIOR NOTES DUE 2008
SCHUFF STEEL COMPANY
AND ITS SUBSIDIARY GUARANTORS
PURCHASE AGREEMENT
June 1, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
JEFFERIES & COMPANY, INC.
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
AS INITIAL PURCHASERS
C/O DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
277 PARK AVENUE
NEW YORK, NEW YORK 10172
Dear Sirs:
Schuff Steel Company, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ"), Jefferies & Company, Inc. and Friedman, Billings, Ramsey &
Co., Inc. (each, an "INITIAL PURCHASER" and, collectively, the "INITIAL
PURCHASERS") an aggregate of $100,000,000 in principal amount of its 10 1/2%
Senior Notes due 2008 (the "RESTRICTED NOTES"), subject to the terms and
conditions set forth herein. The Restricted Notes are to be issued pursuant to
the provisions of an indenture (the "INDENTURE"), to be dated as of the Closing
Date (as defined below), among the Company, the Guarantors (as defined below)
and Harris Trust Company of California, as trustee (the "TRUSTEE"). The
Restricted Notes and the Exchange Notes (as defined below) issuable in exchange
therefor are collectively referred to herein as the "NOTES." The Notes will be
guaranteed (the "SUBSIDIARY GUARANTEES") by each of the entities listed on
Schedule A, hereto (each, a "GUARANTOR" and collectively the "GUARANTORS").
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Indenture.
1. OFFERING MEMORANDUM. The Restricted Notes will be offered and
sold to the Initial Purchasers pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"ACT"). The Company and the Guarantors have prepared a preliminary offering
memorandum, dated May 14, 1998 (the "PRELIMINARY OFFERING MEMORANDUM") and a
final offering memorandum, dated June 1, 1998 (the "OFFERING MEMORANDUM"),
relating to the Restricted Notes and the Subsidiary Guarantees.
Upon original issuance thereof, and until such time as the same is
no longer required pursuant to the Indenture or applicable law, the Restricted
Notes (and all securities issued in exchange therefor or in substitution
thereof) shall bear the following legend:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE
<PAGE> 3
HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"),
OR (B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES
THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO SCHUFF STEEL COMPANY, A DELAWARE CORPORATION (THE "COMPANY"), OR
ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
UNDER THE SECURITIES ACT, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S OF THE SECURITIES
ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER
THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION
OF THE FOREGOING.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, the principal amount of
Restricted Notes set forth opposite the name of such Initial Purchaser on
Schedule B hereto at a purchase price equal to 97% of the principal amount
thereof (the "PURCHASE PRICE").
3. TERMS OF OFFERING. The Initial Purchasers have advised, and
represent and warrant to, the Company that the Initial Purchasers will make
offers and sales (the "EXEMPT RESALES") of the Restricted Notes purchased
hereunder on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to (i) persons whom the Initial Purchasers reasonably
believe to be "qualified institutional buyers" as defined in Rule 144A under the
Act ("QIBS"), and (ii) to persons permitted to purchase the Restricted Notes in
offshore transactions in reliance upon Regulation S under the Act as so defined
in Rule 144A (each a "REGULATION S PURCHASER") (QIB's and Regulation S
Purchasers being referred to herein as the "ELIGIBLE PURCHASERS"). The Initial
Purchasers will offer the Restricted Notes to Eligible Purchasers initially at a
price equal to the percentage of the principal amount thereof set forth on the
cover page of the Offering Memorandum.
Holders (including subsequent transferees) of the Restricted Notes
will have the registration rights set forth in the registration rights agreement
(the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in
substantially the form of Exhibit A hereto, for so long as such Restricted Notes
constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
and the Guarantors will agree to file with the Securities and Exchange
Commission (the "COMMISSION") under
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<PAGE> 4
the circumstances set forth therein (i) a registration statement under the Act
(the "EXCHANGE OFFER REGISTRATION STATEMENT") relating to the Company's 10 1/2%
Senior Notes due 2008 (the "EXCHANGE NOTES"), to be offered in exchange for the
Restricted Notes (such offer to exchange being referred to as the "EXCHANGE
OFFER") and the Subsidiary Guarantees thereof and/or (ii) a shelf registration
statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT"
and, together with the Exchange Offer Registration Statement, the "REGISTRATION
STATEMENTS") relating to the resale by certain holders of the Restricted Notes
and to use its reasonable best efforts to cause such Registration Statements to
be declared and remain effective and usable for the periods specified in the
Registration Rights Agreement and to consummate the Exchange Offer. This
Agreement, the Indenture, the Notes, the Subsidiary Guarantees and the
Registration Rights Agreement are herein referred to collectively as the
"OPERATIVE DOCUMENTS."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price for, the
Notes shall be made at the offices of Snell & Wilmer L.L.P. or such other
location as may be mutually acceptable. Such delivery and payment shall be made
at 9:00 a.m. New York City time, on June 4, 1998 or at such other time or date
as shall be agreed upon by the Initial Purchasers and the Company in writing.
The time and date of such delivery and the payment for the Notes are herein
called the "CLOSING DATE."
(b) One or more of the Restricted Notes in definitive global
form, registered in the name of Cede & Co., as nominee of The Depository Trust
Company ("DTC"), having an aggregate principal amount corresponding to the
aggregate principal amount of the Restricted Notes (collectively, the "GLOBAL
NOTES"), shall be delivered by the Company to the Initial Purchasers (or as the
Initial Purchasers direct) in each case with any transfer taxes thereon duly
paid by the Company against payment by the Initial Purchasers of the Purchase
Price thereof by wire transfer in same day funds to the order of the Company.
The Global Notes shall be made available to the Initial Purchasers for
inspection not later than 9:30 a.m., New York City time, on the business day
immediately preceding the Closing Date.
5. AGREEMENTS OF THE COMPANY AND THE GUARANTORS. The Company
hereby agrees with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly upon obtaining
knowledge thereof and, if requested by the Initial Purchasers, confirm such
advice in writing, (i) of the issuance by any state securities commission of any
stop order suspending the qualification or exemption from qualification of any
Restricted Notes for offering or sale in any jurisdiction designated by the
Initial Purchasers pursuant to Section 5(e) hereof, or the initiation of any
proceeding by any state securities commission or any other federal or state
regulatory authority for such purpose and (ii) of the happening of any event
during the period referred to in Section 5(c) below that makes any statement of
a material fact made in the Preliminary Offering Memorandum or the Offering
Memorandum untrue in any material respect or that requires any additions to or
changes in the Preliminary Offering Memorandum or the Offering Memorandum in
order to make the statements therein not misleading in any material respect. The
Company shall use its reasonable best efforts to prevent the issuance of any
stop order or order suspending the qualification or exemption of any Restricted
Notes under any state securities or Blue Sky laws and, if at any time any state
securities commission or other federal or state regulatory authority shall issue
an order suspending the qualification or exemption of any Restricted Notes under
any state securities or Blue Sky laws, the Company shall use its reasonable best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
or supplements thereto, as the Initial Purchasers may reasonably request for the
time period specified in Section 5(c). Subject to the Initial Purchasers'
compliance with their representations and warranties and agreements set forth in
Section 7 hereof, the Company consents to the use of the Preliminary Offering
Memorandum (up through the date hereof) and the Offering Memorandum, and any
amendments and supplements thereto required pursuant hereto, by the Initial
Purchasers in connection with Exempt Resales.
3
<PAGE> 5
(c) During such period as in the opinion of counsel for the
Initial Purchasers an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchasers and in connection with
market-making activities of the Initial Purchasers for so long as any Restricted
Notes are outstanding, (i) not to make any amendment or supplement to the
Offering Memorandum of which the Initial Purchasers shall not previously have
been advised or to which the Initial Purchasers shall reasonably object after
being so advised and (ii) to prepare promptly upon the Initial Purchasers'
reasonable request based on the opinion of its counsel, any amendment or
supplement to the Offering Memorandum which may be necessary or advisable in
connection with such Exempt Resales or such market-making activities.
(d) If, during the period referred to in Section 5(c) above,
any event shall occur or condition shall exist as a result of which, in the
opinion of counsel to the Initial Purchasers, it becomes necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances when such Offering Memorandum is delivered to an
Eligible Purchaser, not misleading in any material respect, or if, in the
opinion of counsel to the Initial Purchasers, it is necessary to amend or
supplement the Offering Memorandum to comply with applicable federal or state
securities law, forthwith to prepare an appropriate amendment or supplement to
such Offering Memorandum so that the statements therein, as so amended or
supplemented, will not, in the light of the circumstances when it is so
delivered, be misleading in any material respect, or so that such Offering
Memorandum will comply with applicable federal or state securities law, and to
furnish to the Initial Purchasers and such other persons as the Initial
Purchasers may designate such number of copies thereof as the Initial Purchasers
may reasonably request.
(e) Prior to the sale of all Restricted Notes pursuant to
Exempt Resales as contemplated hereby, to cooperate with the Initial Purchasers
and counsel to the Initial Purchasers in connection with the registration or
qualification of the Restricted Notes for offer and sale to the Initial
Purchasers and pursuant to Exempt Resales under the securities or Blue Sky laws
of such jurisdictions as the Initial Purchasers may request and to continue such
registration or qualification in effect so long as required for Exempt Resales
and to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided,
however, that neither the Company nor any Guarantor shall be required in
connection therewith to qualify as a foreign corporation in any jurisdiction in
which it is not now so qualified or to take any action that would subject it to
general consent to service of process or taxation in any jurisdiction in which
it is not now so subject.
(f) So long as the Notes are outstanding, (i) to mail and make
generally available within 105 days (or as soon thereafter as is practicable)
after the end of each fiscal year to the record holders of the Notes a financial
report of the Company and its subsidiaries on a consolidated basis (and a
similar financial report of all unconsolidated subsidiaries, if any), all such
financial reports to include a consolidated balance sheet, a consolidated
statement of income, a consolidated statement of cash flows and a consolidated
statement of changes in shareholders' equity as of the end of and for such
fiscal year, together with comparable information as of the end of and for the
preceding year, certified by the Company's independent public accountants and
(ii) to mail and make generally available within 60 days (or as soon thereafter
as practicable) after the end of each quarterly period (except for the last
quarterly period of each fiscal year) to such holders, a consolidated balance
sheet, a consolidated statement of income and a consolidated statement of cash
flows (and similar financial reports of all unconsolidated subsidiaries, if any)
as of the end of and for such period, and for the period from the beginning of
such year to the close of such quarterly period, together with comparable
information for the corresponding periods of the preceding year.
(g) So long as the Restricted Notes are outstanding, to
furnish to the Initial Purchasers as soon as available copies of all current
reports on Form 8-K under the Exchange Act or written communications furnished
by the Company to its security holders generally filed with the Commission or
any national securities exchange on which any class of securities of the Company
or any of the Guarantors is listed.
(h) So long as any of the Restricted Notes remain outstanding
and during any period in which the Company and the Guarantors are not subject to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to make available to any holder of Restricted Notes in
connection with any sale thereof and any prospective purchaser of such
Restricted Notes from such holder, the information ("Rule 144A Information")
required by Rule 144A(d)(4) under the Act.
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<PAGE> 6
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all reasonable expenses incident to the performance of the obligations of
the Company and the Guarantors under this Agreement, including: (i) the fees,
disbursements and expenses of counsel to the Company and the Guarantors and
accountants of the Company and the Guarantors in connection with the sale and
delivery of the Restricted Notes to the Initial Purchasers and pursuant to
Exempt Resales, and all other fees and expenses in connection with the
preparation, printing, filing and distribution of the Preliminary Offering
Memorandum, the Offering Memorandum and all amendments and supplements to any of
the foregoing (including financial statements), including the mailing and
delivering of copies thereof to the Initial Purchasers and persons designated by
it in the quantities specified herein, (ii) all costs and expenses related to
the transfer and delivery of the Restricted Notes to the Initial Purchasers and
pursuant to Exempt Resales, including any transfer or other taxes payable
thereon, (iii) all costs of printing or producing this Agreement, the other
Operative Documents and any other agreements or documents in connection with the
offering, purchase, sale or delivery of the Restricted Notes, (iv) all expenses
in connection with the registration or qualification of the Restricted Notes and
the Subsidiary Guarantees for offer and sale under the securities or Blue Sky
laws of the several states and all costs of printing or producing any
preliminary and supplemental Blue Sky memoranda in connection therewith
(including the filing fees and reasonable fees and disbursements of counsel for
the Initial Purchasers in connection with such registration or qualification and
memoranda relating thereto), (v) the cost of printing certificates representing
the Restricted Notes and the Subsidiary Guarantees, (vi) all expenses and
listing fees in connection with the application for quotation of the Restricted
Notes in the National Association of Securities Dealers, Inc.'s ("NASD") Private
Offerings, Resales and Trading Through Automatic Linkages market ("PORTAL"),
(vii) the fees and expenses of the Trustee and the Trustee's counsel in
connection with the Indenture, the Notes and the Subsidiary Guarantees, (viii)
the costs and charges of any transfer agent, registrar and/or depositary
(including DTC), (ix) any fees charged by rating agencies for the rating of the
Notes, (x) costs and expenses of the Exchange Offer and any Registration
Statement, as set forth in the Registration Rights Agreement and (xi) and all
other reasonable costs and expenses incident to the performance of the
obligations of the Company and the Guarantors hereunder for which provision is
not otherwise made in this Section.
(j) To use its reasonable best efforts to effect the inclusion
of the Restricted Notes in PORTAL and to maintain the listing of the Restricted
Notes on PORTAL for so long as the Restricted Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer of
the Notes, and to comply with all of its agreements set forth in the
representation letters of the Company and the Guarantors to DTC relating to the
approval of the Notes by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise transfer or dispose of any debt securities of the Company or
any Guarantor or any warrants, rights or options to purchase or otherwise
acquire debt securities of the Company or any Guarantor substantially similar to
the Notes and the Subsidiary Guarantees (other than (i) the Notes and the
Subsidiary Guarantees and (ii) commercial paper issued in the ordinary course of
business), without the prior written consent of the Initial Purchasers.
(m) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Restricted Notes to the Initial
Purchasers or pursuant to Exempt Resales in a manner that would require the
registration of any such sale of the Restricted Notes under the Act.
(n) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of any
Notes and the related Subsidiary Guarantees.
(o) To cause the Exchange Offer to be made in the appropriate
form to permit Exchange Notes and guarantees thereof by the Guarantors
registered pursuant to the Act to be offered in exchange for the Restricted
Notes and the Subsidiary Guarantees and to comply with all applicable federal
and state securities laws in connection with the Exchange Offer.
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<PAGE> 7
(p) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(q) To use its reasonable best efforts to do and perform all
things required or necessary to be done and performed under this Agreement by it
prior to the Closing Date and to satisfy all of its conditions precedent to the
delivery of the Restricted Notes and the Subsidiary Guarantees.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND
THE GUARANTORS. As of the date hereof (or such later date as provided herein, as
applicable), each of the Company and the Guarantors (which are subsidiaries of
the Company on the date hereof) represents and warrants to, and agrees with, the
Initial Purchasers that:
(a) The Preliminary Offering Memorandum and the Offering
Memorandum do not, and any supplement or amendment to them will not, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading in any material
respect, except that the representations and warranties contained in this
paragraph (a) shall not apply to statements in or omissions from the Preliminary
Offering Memorandum or the Offering Memorandum (or any supplement or amendment
thereto) based upon information relating to the Initial Purchasers furnished to
the Company in writing by the Initial Purchasers expressly for use therein. No
stop order preventing the use of the Preliminary Offering Memorandum or the
Offering Memorandum, or any amendment or supplement thereto, or any order
asserting that any of the transactions contemplated by this Agreement are
subject to the registration requirements of the Act, has been issued.
(b) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Preliminary Offering
Memorandum and the Offering Memorandum and to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole or draw into
question adversely affect the validity of this Agreement or the other Operative
Documents (a "MATERIAL ADVERSE EFFECT").
(c) All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights.
(d) The entities listed on Schedule C hereto are the only
subsidiaries, direct or indirect, of the Company. For purposes of this Agreement
and the other Operative Documents, the Company's subsidiaries (including
subsidiary Guarantors) include all entities that will become subsidiaries (or
subsidiary Guarantors) of the Company upon the consummation of the acquisition
of Addison Structural Services, Inc. and all representations and warranties
pertaining to such subsidiaries (or subsidiary Guarantors) who become such after
the date hereof shall be deemed made only as of such later date or dates. All of
the outstanding shares of capital stock of each of the Company's subsidiaries
have been duly authorized and validly issued and are fully paid and
non-assessable, and are owned by the Company, directly or indirectly through one
or more subsidiaries, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature (each, a "LIEN") other than
Permitted Liens (as defined in the Indenture), Liens created under the credit
agreements disclosed in the Offering Memorandum and restrictions on transfers
under federal and state securities laws.
(e) This Agreement has been duly authorized, executed and
delivered by the Company and each of the Guarantors.
(f) The Indenture has been duly authorized by the Company and
each of the Guarantors and, on the Closing Date, will have been validly executed
and delivered by the Company and each of the Guarantors. When the Indenture has
been duly executed and delivered by the Company and each of the Guarantors, and,
assuming the due authorization, execution and delivery by the Trustee if
required, the Indenture will be a valid and binding
6
<PAGE> 8
agreement of the Company and each Guarantor, enforceable against the Company and
each Guarantor in accordance with its terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable or other remedies may be limited
by equitable principles of general applicability or the discretion of any court
before which a proceeding may be brought. On the Closing Date, the Indenture
will conform in all material respects to the requirements of the Trust Indenture
Act of 1939, as amended (the "TIA" or "TRUST INDENTURE ACT"), and the rules and
regulations of the Commission applicable to an indenture which is qualified
thereunder.
(g) The Restricted Notes have been duly authorized and, on the
Closing Date, will have been validly executed and delivered by the Company. When
the Restricted Notes have been issued, executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement, the
Restricted Notes will be entitled to the benefits of the Indenture and will be
valid and binding obligations of the Company, enforceable in accordance with
their terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable or other remedies may be limited by equitable principles of general
applicability or the discretion of any court before which a proceeding may be
brought. On the Closing Date, the Restricted Notes will conform as to legal
matters to the description thereof contained in the Offering Memorandum.
(h) On the Closing Date, the Exchange Notes will have been
duly authorized by the Company. When the Exchange Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Exchange Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable or other remedies may be
limited by equitable principles of general applicability or the discretion of
any court before which a proceeding may be brought.
(i) The Subsidiary Guarantee to be endorsed on the Restricted
Notes by each Guarantor has been duly authorized by such Guarantor and, on the
Closing Date, will have been duly executed and delivered by each such Guarantor.
When the Restricted Notes have been issued, executed and authenticated in
accordance with the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Subsidiary
Guarantee of each Guarantor endorsed thereon will be entitled to the benefits of
the Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and (ii) rights of acceleration and the availability of equitable remedies may
be limited by equitable or other principles of general applicability or the
discretion of any court before which a proceeding may be brought. On the Closing
Date, the Subsidiary Guarantees to be endorsed on the Restricted Notes will
conform as to legal matters to the description thereof contained in the Offering
Memorandum.
(j) The Subsidiary Guarantee to be endorsed on the Exchange
Notes by each Guarantor has been duly authorized by such Guarantor and, when
issued, will have been duly executed and delivered by each such Guarantor. When
the Exchange Notes have been issued, executed and authenticated in accordance
with the terms of the Exchange Offer and the Indenture, the Subsidiary Guarantee
of each Guarantor endorsed thereon will be entitled to the benefits of the
Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and (ii) rights of acceleration and the availability of equitable or other
remedies may be limited by equitable principles of general applicability or the
discretion of any court before which a proceeding may be brought. When the
Exchange Notes are issued, authenticated and delivered, the Subsidiary
Guarantees to be endorsed on the Exchange Notes will conform as to legal matters
to the description thereof in the Offering Memorandum.
(k) The Registration Rights Agreement has been duly authorized
by the Company and each of the Guarantors and, on the Closing Date, will have
been duly executed and delivered by the Company and each
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<PAGE> 9
of the Guarantors. When the Registration Rights Agreement has been duly executed
and delivered, assuming the due authorization, execution and delivery of the
Initial Purchaser the Registration Rights Agreement will be a valid and binding
agreement of the Company and each of the Guarantors, enforceable against the
Company and each Guarantor in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable and other remedies may be
limited by equitable principles of general applicability and the discretion of
any court before which a proceeding may be brought. On the Closing Date, the
Registration Rights Agreement will conform as to legal matters to the
description thereof in the Offering Memorandum.
(l) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the performance
of any obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound other than defaults which
would not, singly or in the aggregate, have a Material Adverse Effect.
(m) The execution, delivery and performance of this Agreement
and the other Operative Documents by the Company and each of the Guarantors,
compliance by the Company and each of the Guarantors with all provisions hereof
and thereof and the consummation of the transactions contemplated hereby and
thereby will not (i) require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency (except such
as may be required under the securities or Blue Sky laws of the various states),
(ii) conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Company or any of its
subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or their respective property is
bound, (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Company, any of its subsidiaries or their
respective property, (iv) result in the imposition or creation of (or the
obligation to create or impose) a Lien under, any agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or their respective property is bound other than as
disclosed in the Offering Memorandum or (v) result in the termination,
suspension or revocation of any Authorization (as defined below) of the Company
or any of its subsidiaries or result in any other impairment of the rights of
the holder of any such Authorization, which, in each case, would have a Material
Adverse Effect.
(n) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or any of its
subsidiaries is a party or to which any of their respective property is subject,
which might result, singly or in the aggregate, in a Material Adverse Effect,
other than as described in the Offering Memorandum.
(o) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any provisions of the Foreign Corrupt Practices Act or the rules
and regulations promulgated thereunder, except for such violations which, singly
or in the aggregate, would not have a Material Adverse Effect.
(p) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) with respect to the
properties or former properties of Addison to be acquired by Schuff and which
would, singly or in the aggregate, have a Material Adverse Effect.
(q) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other
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<PAGE> 10
tribunals, including without limitation, under any applicable Environmental
Laws, as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure to have any
such Authorization or to make any such filing or notice would not, singly or in
the aggregate, have a Material Adverse Effect. Each such Authorization is valid
and in full force and effect and each of the Company and its subsidiaries is in
compliance with all the terms and conditions thereof and with the rules and
regulations of the authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which allows or,
after notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or lapse of
time or both, would result in any other impairment of the rights of the holder
of any such Authorization; and such Authorizations contain no restrictions that
are burdensome to the Company or any of its subsidiaries; except, in each case,
where the occurrence of any such event or the presence of any such restriction
would not, singly or in the aggregate, have a Material Adverse Effect.
(r) Ernst & Young LLP and, to the best knowledge of the
Company, Mauldin & Jenkins, who have certified the financial statements and
supporting schedules included in the Preliminary Offering Memorandum and the
Offering Memorandum, are independent public accountants with respect to the
Company and the Guarantors, as required by the Act and the Exchange Act. The
historical financial statements, together with related schedules and notes, set
forth in the Preliminary Offering Memorandum and the Offering Memorandum comply
as to form in all material respects with the requirements applicable to
registration statements on Form S-1 under the Act.
(s) The historical financial statements, together with related
schedules and notes forming part of the Offering Memorandum (and any amendment
or supplement thereto), present fairly the consolidated financial position,
results of operations and cash flows of the Company, its subsidiaries and the
Guarantors on the basis stated in the Offering Memorandum at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial information and
data set forth in the Offering Memorandum (and any amendment or supplement
thereto) are, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company, its subsidiaries and the Guarantors.
(t) The pro forma financial statements included in the
Preliminary Offering Memorandum and the Offering Memorandum under the caption
"Unaudited Pro Forma Condensed Combined Financial Statements" (including the
notes therein) have been prepared on a basis consistent with the historical
financial statements of the Company, its subsidiaries and the Guarantors and
give effect to assumptions used in the preparation thereof on a reasonable basis
in light of current circumstances and in good faith and present fairly the
historical and proposed transactions contemplated by the Preliminary Offering
Memorandum and the Offering Memorandum as described therein; and such pro forma
financial statements comply as to form in all material respects with the
requirements applicable to pro forma financial statements under Regulation S-X
except with respect to the presentation of statistical information and
supplemental data not required in a registration statement. The other pro forma
financial and statistical information and data included in the Offering
Memorandum are, in all material respects, accurately presented in light of
current circumstances and prepared on a basis consistent with the pro forma
financial statements.
(u) The Company is not and, after giving effect to the
offering and sale of the Restricted Notes and the application of the net
proceeds thereof as described in the Offering Memorandum, will not be, an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended.
(v) Except for the Registration Rights Agreement, there are no
contracts, agreements or understandings between the Company or any Guarantor and
any person granting such person the right to require the Company or such
Guarantor to file a registration statement under the Act with respect to any
securities of the Company or such Guarantor or to require the Company or such
Guarantor to include such securities with the Notes and Subsidiary Guarantees
registered pursuant to any Registration Statement.
(w) Neither the Company nor any of its subsidiaries nor any
agent thereof acting on the behalf of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale
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<PAGE> 11
of the Restricted Notes to violate Regulation G (12 C.F.R. Part 207), Regulation
T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12
C.F.R. Part 224) of the Board of Governors of the Federal Reserve System, in
each case as in effect on the date hereof.
(x) To the knowledge of the Company, no "nationally recognized
statistical rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Act (i) has imposed (or has informed the Company or any
Guarantor that it is considering imposing) any condition (financial or
otherwise) on the Company's or any Guarantor's retaining any rating assigned to
the Company or any Guarantor, any securities of the Company or any Guarantor or
(ii) has indicated to the Company or any Guarantor that it is considering (a)
the downgrading, suspension, or withdrawal of, or any review for a possible
change that does not indicate the direction of the possible change in, any
rating so assigned or (b) any change in the outlook for any rating of the
Company, any Guarantor or any securities of the Company or any Guarantor.
(y) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there has not occurred any material adverse change
or any development involving a reasonably certain prospective material adverse
change in the condition, financial or otherwise, or the earnings, business,
management or operations of the Company and its subsidiaries, taken as a whole,
(ii) there has not been any material adverse change or any development involving
a reasonably certain prospective material adverse change in the capital stock or
in the long-term debt of the Company or any of its subsidiaries and (iii)
neither the Company nor any of its subsidiaries has incurred any material
liability or obligation, direct or contingent, except in the ordinary course of
business.
(z) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the applicable information
specified in, and meeting the requirements of, Rule 144A(d)(4) under the Act.
(aa) When the Restricted Notes and the Subsidiary Guarantees
are issued and delivered pursuant to this Agreement, neither the Restricted
Notes nor the Subsidiary Guarantees will be of the same class (within the
meaning of Rule 144A under the Act) as any security of the Company or the
Guarantors that is listed on a national securities exchange registered under
Section 6 of the Exchange Act or that is quoted in a United States automated
inter-dealer quotation system.
(bb) No form of general solicitation or general advertising
(as defined in Regulation D under the Act) was used by the Company, the
Guarantors or any of their respective representatives (other than the Initial
Purchasers, as to whom the Company and the Guarantors make no representation) in
connection with the offer and sale of the Restricted Notes contemplated hereby,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising. No securities of the same
class as the Restricted Notes have been issued and sold by the Company within
the six-month period immediately prior to the date hereof.
(cc) Assuming the accuracy of the representations and
warranties of the Initial Purchaser in Section 7 hereof, prior to the
effectiveness of any Registration Statement, the Indenture is not required to be
qualified under the TIA in connection with the offer, sale and delivery of the
Restricted Notes in the manner contemplated by the Offering Memorandum and this
Agreement.
(dd) None of the Company, the Guarantors nor any of their
respective affiliates or any person acting on its or their behalf (other than
the Initial Purchasers, as to whom the Company and the Guarantors make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Act ("REGULATION S") with respect
to the Restricted Notes or the Subsidiary Guarantees.
(ee) The sale of the Restricted Notes pursuant to Regulation S
is not part of a plan or scheme on behalf of the Company to evade the
registration provisions of the Act.
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<PAGE> 12
(ff) No registration under the Act of the Restricted Notes or
the Subsidiary Guarantees is required for the sale of the Restricted Notes and
the Subsidiary Guarantees to the Initial Purchasers as contemplated hereby or
for the Exempt Resales assuming the accuracy of the Initial Purchasers'
representations and warranties and agreements set forth in Section 7 hereof.
(gg) Each certificate signed by any officer of the Company or
any Guarantor and delivered to the Initial Purchasers or counsel for the Initial
Purchasers shall be deemed to be a representation and warranty by the Company or
such Guarantor to the Initial Purchasers as to the matters covered thereby.
(hh) The Company, the Guarantors and their respective
affiliates and all persons acting on their behalf (other than the Initial
Purchasers, as to whom the Company and the Guarantors make no representation)
have complied with and will comply with the offering restrictions requirements
of Regulation S in connection with the offering of the Restricted Notes outside
the United States and, in connection therewith, the Offering Memorandum will
contain the disclosure required by Rule 902(h).
(ii) The Company is a "reporting issuer" as defined in Rule
902 under the Act.
(jj) There is no (i) significant unfair labor practice
complaint, grievance or arbitration proceeding pending or, to the knowledge of
the Company or its subsidiaries, threatened against the Company or any of its
subsidiaries before the National Labor Relations Board or any state or local
labor relations board, (ii) strike, labor dispute, slowdown or stoppage pending
or, to the knowledge of the Company or its subsidiaries, threatened against the
Company or any of its subsidiaries or (iii) union representation question
existing with respect to the employees of the Company or any of its
subsidiaries, except in the case of clauses (i), (ii) and (iii) for such actions
which, singly or in the aggregate, would not have a Material Adverse Effect. To
the knowledge of the Company, no additional collective bargaining organizing
activities are taking place with respect to the Company or any of its
subsidiaries.
(kk) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its subsidiaries, in each case free and clear of all Liens, except Permitted
Liens and Liens created under credit agreements disclosed in the Offering
Memorandum or such as do not materially affect the value of such property and do
not materially interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and any real property and
buildings held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and currently
proposed to be made of such property and buildings by the Company and its
subsidiaries, in each case except as described in the Offering Memorandum.
(ll) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged; and neither the Company nor any of its subsidiaries (i) has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other material expenditures will have to be made in
order to continue such insurance or (ii) has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers at a cost that would
not have a Material Adverse Effect.
The Company and the Guarantors acknowledge that the Initial
Purchasers and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 9 hereof, counsel to the Company and the
Guarantors and counsel to the Initial Purchasers will rely upon the accuracy and
truth of the foregoing representations and hereby consent to such reliance.
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<PAGE> 13
7. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES. Each of the
Initial Purchasers, severally and not jointly, represents and warrants to the
Company and the Guarantors, and agrees that:
(a) Such Initial Purchaser is either a QIB or a Regulation S
Purchaser, in either case, with such knowledge and experience in financial and
business matters as is necessary in order to evaluate the merits and risks of an
investment in the Restricted Notes.
(b) Such Initial Purchaser (A) is not acquiring the Restricted
Notes with a view to any distribution thereof or with any present intention of
offering or selling any of the Restricted Notes in a transaction that would
violate the Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling the
Restricted Notes only to (x) QIBs in reliance on and in compliance with the
exemption from the registration requirements of the Act provided by Rule 144A
and (y) in offshore transactions in reliance upon and in compliance with
Regulation S under the Act.
(c) Such Initial Purchasers agree that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchasers or any of their
representatives in connection with the offer and sale of the Restricted Notes
pursuant hereto, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) Such Initial Purchasers agree that, in connection with
Exempt Resales, such Initial Purchasers will solicit offers to buy the
Restricted Notes only from, and will offer to sell the Restricted Notes only to
and sell only to, Eligible Purchasers. Each Initial Purchaser further agrees
that it will offer to sell the Restricted Notes only to, and will solicit offers
to buy the Restricted Notes only from and sell only to (A) Eligible Purchasers
that the Initial Purchasers reasonably believe are QIBs, and (B) Regulation S
Purchasers, in each case, that agree that (x) the Restricted Notes purchased by
them may be resold, pledged or otherwise transferred only within the time period
referred to under Rule 144(k) (taking into account the provisions of Rule 144(d)
under the Act, if applicable) under the Act, as in effect on the date of the
transfer of such Restricted Notes, only (I) to the Company or any of its
subsidiaries, (II) to a person whom the seller reasonably believes is a QIB
purchasing for its own account or for the account of a QIB in a transaction
meeting the requirements of Rule 144A under the Act, (III) in an offshore
transaction (as defined in Rule 902 under the Act) meeting the requirements of
Rule 904 of the Act, (IV) in a transaction meeting the requirements of Rule 144
under the Act, (V) to a Regulation S Purchaser that, prior to such transfer,
furnishes the Trustee a signed letter containing certain representations and
agreements relating to the registration of transfer of such Restricted Note (the
form of which is substantially the same as Annex A to the Offering Memorandum)
and, if such transfer is in respect of an aggregate principal amount of
Restricted Notes less than $250,000, an opinion of counsel acceptable to the
Company that such transfer is in compliance with the Act, (VI) in accordance
with another exemption from the registration requirements of the Act (and based
upon an opinion of counsel acceptable to the Company) or (VII) pursuant to an
effective registration statement and, in each case, in accordance with the
applicable securities laws of any state of the United States or any other
applicable jurisdiction and (y) they will deliver to each person to whom such
Restricted Notes or an interest therein is transferred a notice substantially to
the effect of the foregoing.
(e) Such Initial Purchasers and their affiliates or any person
acting on their behalf have not engaged or will not engage in any directed
selling efforts within the meaning of Regulation S with respect to the
Restricted Notes or the Subsidiary Guarantees.
(f) The Restricted Notes offered and sold by such Initial
Purchasers pursuant hereto in reliance on Regulation S have been and will be
offered and sold only in offshore transactions.
(g) The sale of the Restricted Notes offered and sold by such
Initial Purchasers pursuant hereto in reliance on Regulation S is not part of a
plan or scheme to evade the registration provisions of the Act.
(h) Such Initial Purchasers agree that they have not offered
or sold and will not offer or sell the Restricted Notes in the United States or
to, or for the benefit or account of, a U.S. Person (other than a
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<PAGE> 14
distributor), in each case, as defined in Rule 902 under the Act (i) as part of
its distribution at any time and (ii) otherwise until 40 days (or such later
time as may be required under Regulation S) after the later of the commencement
of the offering of the Restricted Notes pursuant hereto and the Closing Date,
other than in accordance with Regulation S of the Act or another exemption from
the registration requirements of the Act. Such Initial Purchasers agree that,
during such 40-day restricted period (or such longer restricted period as may be
required under Regulation S), they will not cause any advertisement with respect
to the Restricted Notes (including any "tombstone" advertisement) to be
published in any newspaper or periodical or posted in any public place and will
not issue any circular relating to the Restricted Notes, except such
advertisements as are permitted by and include the statements required by
Regulation S.
(i) Such Initial Purchasers agree that, at or prior to
confirmation of a sale of Restricted Notes by it to any distributor, dealer or
person receiving a selling concession, fee or other remuneration during the 40-
day (or later applicable) restricted period referred to in Rule 903(c)(2) under
the Act, they will send to such distributor, dealer or person receiving a
selling concession, fee or other remuneration a confirmation or notice to
substantially the following effect:
"The Restricted Notes covered hereby have not been
registered under the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered and sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of your distribution at any
time or (ii) otherwise until 40 days after the later of the commencement of the
Offering and the Closing Date (or such later date as may be required under
Regulation S), except in either case in accordance with Regulation S under the
Securities Act (or Rule 144A or to Regulation S Purchasers in transactions that
are exempt from the registration requirements of the Securities Act), and in
connection with any subsequent sale by you of the Restricted Notes covered
hereby in reliance on Regulation S during the period referred to above to any
distributor, dealer or person receiving a selling concession, fee or other
remuneration, you must deliver a notice to substantially the foregoing effect.
Terms used above have the meanings assigned to them in Regulation S."
(j) The information provided by the Initial Purchaser for
inclusion in the Preliminary Offering Memorandum and the Offering Memorandum,
including the information under the caption "Plan of Distribution," and on the
cover page of the Offering Memorandum with respect to pricing, discounts and
commissions and proceeds, does not contain an untrue statement of a material
fact or omit to Schuff any material fact necessary to make the statements
therein not misleading, and contains all information required to be provided in
a registration statement on Form S-1 or Form S-4 under the Act and the Exchange
Act.
Such Initial Purchasers acknowledge that the Company and the
Guarantors and, for purposes of the opinions to be delivered to each Initial
Purchasers pursuant to Section 9 hereof, counsel to the Company and the
Guarantors and counsel to the Initial Purchasers will rely upon the accuracy and
truth of the foregoing representations and such Initial Purchasers hereby
consent to such reliance.
8. INDEMNIFICATION.
(a) The Company and each Guarantor agree, jointly and
severally, to indemnify and hold harmless the Initial Purchasers, their
directors, their officers and each person, if any, who controls such Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments (including, without limitation, any reasonable legal or other
expenses incurred in connection with investigating or defending any matter,
including any action, that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), the Preliminary Offering Memorandum or any
Rule 144A Information provided by the Company or any Guarantor to any holder or
prospective purchaser of Restricted Notes pursuant to Section 5(h) or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in any
material respect, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to the Initial Purchasers
or the plan of distribution furnished in writing to the Company by such Initial
Purchasers; provided, however, that the foregoing indemnity agreement with
respect to any Preliminary Offering Memorandum shall not inure to the
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<PAGE> 15
benefit of any Initial Purchasers who failed to deliver a Final Offering
Memorandum (as then amended or supplemented, provided by the Company to the
several Initial Purchasers in the requisite quantity and on a timely basis to
permit proper delivery on or prior to the Closing Date) to the person asserting
any losses, claims, damages and liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Memorandum, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading in any material respect, if such
material misstatement or omission or alleged material misstatement or omission
was cured in the Final Offering Memorandum.
(b) The Initial Purchasers agree to indemnify and hold
harmless the Company and the Guarantors, and their respective directors and
officers and each person, if any, who controls (within the meaning of Section 15
of the Act or Section 20 of the Exchange Act) the Company or the Guarantors, to
the same extent as the foregoing indemnity from the Company and the Guarantors
to the Initial Purchasers but only with reference to information relating to the
Initial Purchasers furnished in writing to the Company by the Initial Purchasers
expressly for use in the Preliminary Offering Memorandum or the Offering
Memorandum.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all reasonable fees and expenses of such counsel, as
incurred (except that in the case of any action in respect of which indemnity
may be sought pursuant to both Sections 8(a) and 8(b), the Initial Purchasers
shall not be required to assume the defense of such action pursuant to this
Section 8(c), but may employ separate counsel and participate in the defense
thereof, but the fees and expenses of such counsel, except as provided below,
shall be at the expense of the Initial Purchasers). Any indemnified party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such counsel shall
have been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by Donaldson, Lufkin & Jenrette Securities
Corporation, in the case of the parties indemnified pursuant to Section 8(a),
and by the Company, in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall indemnify and hold harmless the indemnified party
from and against any and all losses, claims, damages, liabilities and judgments
by reason of any settlement of any action effected with its written consent. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors, on the one hand, and the Initial Purchasers on the
other hand from the offering of the Restricted Notes or (ii) if the allocation
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the
14
<PAGE> 16
relative benefits referred to in clause 8(d)(i) above but also the relative
fault of the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Guarantors, on the one hand and the Initial
Purchasers, on the other hand, shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Restricted Notes (after
underwriting discounts and commissions, but before deducting expenses other than
expenses of the Initial Purchasers paid by the Company) received by the Company,
and the total discounts and commissions received by the Initial Purchasers bear
to the total price to investors of the Restricted Notes, in each case as set
forth in the table on the cover page of the Offering Memorandum. The relative
fault of the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or th
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Guarantors, on the one hand, or the Initial
Purchasers, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Guarantors, and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant to this
Section 8(d) were determined by pro rata allocation (even if the Initial
Purchasers were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or judgments referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any reasonable legal or
other expenses incurred by such indemnified party in connection with
investigating or defending any matter, including any action, that could have
given rise to such losses, claims, damages, liabilities or judgments.
Notwithstanding the provisions of this Section 8, the Initial Purchasers shall
not be required to contribute any amount in excess of the amount by which the
sum of the total discounts and commissions received by such Initial Purchasers
and expenses of the Initial Purchasers paid by the Company exceeds the amount of
any damages which the Initial Purchasers have otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Initial Purchasers'
obligations to contribute pursuant to this Section 8(d) are several in
proportion to the respective principal amount of Restricted Notes purchased by
each of the Initial Purchasers hereunder and not joint.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations
of the Initial Purchasers to purchase the Restricted Notes under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and
the Guarantors contained in this Agreement shall be true and correct in all
material respects on the Closing Date with the same force and effect as if made
on and as of the Closing Date.
(b) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of the Company or any Guarantor or any securities of the Company or any
Guarantor (including, without limitation, the placing of any of the foregoing
ratings on credit watch with negative or developing implications or under review
with an uncertain direction) by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Act, (ii) there shall not have occurred any adverse change, nor shall any notice
have been given of any potential or intended adverse change, in the outlook for
any rating of the Company or any Guarantor or any securities of the Company or
any Guarantor by any such rating organization and (iii) no such rating
organization shall have given notice that it has assigned (or is considering
assigning) a lower rating to the Notes than that on which the Notes were
marketed.
15
<PAGE> 17
(c) Since the respective dates as of which information is
given in the Offering Memorandum, other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there shall not have occurred any change or any
development involving a reasonably certain prospective change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Company and its subsidiaries, taken as a whole, (ii) there shall not have
been any adverse change or any adverse development involving a reasonably
certain prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(c)(i),
9(c)(ii) or 9(c)(iii), in your reasonable judgment, is material and adverse and,
in your reasonable judgment, makes it impracticable to market the Restricted
Notes on the terms and in the manner contemplated in the Offering Memorandum.
(d) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by the President and the Chief Financial Officer
of the Company and each of the Guarantors, confirming the matters set forth in
Sections 6(y), 9(a) and 9(b) and stating that each of the Company and the
Guarantors has complied with all the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied on or
prior to the Closing Date.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the Closing
Date, of Snell & Wilmer L.L.P., counsel for the Company and the Guarantors,
substantially in the form attached as Exhibit B hereto.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, of Akin, Gump, Strauss, Hauer & Feld,
L.L.P., counsel for the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers.
(g) The Initial Purchasers shall have received, at the time
this Agreement is executed and at the Closing Date, letters dated the date
hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchasers from Ernst & Young, LLP and Mauldin &
Jenkins, independent public accountants, containing the information and
statements of the type ordinarily included in accountants' "comfort letters" to
the Initial Purchasers with respect to the financial statements and certain
financial information contained in the Offering Memorandum.
(h) The Restricted Notes shall have been approved by the NASD
for trading and duly listed in PORTAL.
(i) The Initial Purchasers shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Company, the Guarantors and the Trustee.
(j) The Company and the Guarantors shall have executed the
Registration Rights Agreement and the Initial Purchasers shall have received an
original copy thereof, duly executed by the Company and the Guarantors.
(k) Neither the Company nor the Guarantors shall have failed
at or prior to the Closing Date to perform or comply with any of the agreements
herein contained and required in any material respect to be performed or
complied with by the Company or the Guarantors, as the case may be, at or prior
to the Closing Date.
(l) The Company shall have acquired the capital stock of
Addison Structural Services, Inc. prior to or simultaneously with the Closing.
(m) Addison Structural Services, Inc., Addison Steel, Inc. and
Quincy Joist Company shall have become parties to this agreement as "Guarantors"
pursuant to an assumption agreement in the form of Exhibit I hereto which shall
be executed by each Guarantor and delivered to the Initial Purchaser on the
Closing Date.
16
<PAGE> 18
(n) The firm of King & Spalding shall permit the Initial
Purchasers to rely on its opinion rendered to the Company in connection with the
purchase of Addison Structural Services, Inc., Addison Steel, Inc. and Quincy
Joist Company by the Company.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement shall
become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchasers by written notice to the Company if any
of the following has occurred: (i) any outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchasers' reasonable judgment, is material and adverse and, in
the Initial Purchasers' reasonable judgment, makes it impracticable to market
the Restricted Notes on the terms and in the manner contemplated in the Offering
Memorandum, (ii) the suspension or material limitation of trading in securities
or other instruments on the New York Stock Exchange, the American Stock
Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the Nasdaq National Market or limitation
on prices for securities or other instruments on any such exchange or the Nasdaq
National Market, (iii) the suspension of trading of any securities of the
Company or any Guarantor on any exchange or in the over-the-counter market, (iv)
the enactment, publication, decree or other promulgation of any federal or state
statute, regulation, rule or order of any court or other governmental authority
which in your reasonable opinion materially and adversely affects, or will
materially and adversely affect, the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole, (v)
the declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
reasonable opinion has a material adverse effect on the financial markets in the
United States.
If on the Closing Date any one or more of the Initial Purchasers
shall fail or refuse to purchase the Restricted Notes which it or they have
agreed to purchase hereunder on such date and the aggregate principal amount of
the Restricted Notes which such defaulting Initial Purchaser or Initial
Purchasers, as the case may be, agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of the Restricted Notes to
be purchased on such date by all Initial Purchasers, each non-defaulting Initial
Purchaser shall be obligated severally, in the proportion which the principal
amount of the Restricted Notes set forth opposite its name in Schedule B bears
to the aggregate principal amount of the Restricted Notes which all the
non-defaulting Initial Purchasers, as the case may be, have agreed to purchase,
or in such other proportion as you may specify, to purchase the Restricted Notes
which such defaulting Initial Purchaser or Initial Purchasers, as the case may
be, agreed but failed or refused to purchase on such date; provided that in no
event shall the aggregate principal amount of the Restricted Notes which any
Initial Purchaser has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such principal amount of the Restricted Notes without the written consent of
such Initial Purchaser. If on the Closing Date any Initial Purchaser or Initial
Purchasers shall fail or refuse to purchase the Restricted Notes and the
aggregate principal amount of the Restricted Notes with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of the
Restricted Notes to be purchased by all Initial Purchasers and arrangements
satisfactory to the Initial Purchasers and the Company for purchase of such the
Restricted Notes are not made within 48 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Initial
Purchasers and the Company. In any such case which does not result in
termination of this Agreement, either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Offering Memorandum or any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Initial Purchasers from liability in respect of
any default of any such Initial Purchasers under this Agreement.
11. MISCELLANEOUS. (a) Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company or any
Guarantor, to Schuff Steel Company, 1841 West Buchanan Street, Phoenix, Arizona
85009, Attention: Kenneth F. Zylstra (602) 251-0313, and (ii) if to the Initial
Purchasers, Donaldson, Lufkin & Jenrette Securities Corporation, Jefferies &
Company, Inc., Friedman, Billings, Ramsey & Co., Inc., c/o Donaldson, Lufkin &
Jenrette Securities Corporation, 277 Park Avenue, New York, New York 10172,
Attention: Syndicate Department, or in any case to such other address as the
person to be notified may have requested in writing.
17
<PAGE> 19
(b) The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, the Guarantors
and the Initial Purchasers set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Restricted Notes, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of the Initial
Purchasers, the officers or directors of the Initial Purchasers, any person
controlling the Initial Purchasers, the Company, any Guarantor, the officers or
directors of the Company or any Guarantor, or any person controlling the Company
or any Guarantor, (ii) acceptance of the Restricted Notes and payment for them
hereunder and (iii) termination of this Agreement.
If for any reason the Restricted Notes are not delivered by or
on behalf of the Company as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10), the Company and each
Guarantor, jointly and severally, agree to reimburse the Initial Purchasers for
all out-of-pocket expenses (including the fees and disbursements of counsel)
incurred by them. Notwithstanding any termination of this Agreement, the Company
shall be liable for all expenses which it has agreed to pay pursuant to Section
5(i) hereof. The Company and each Guarantor also agree, jointly and severally,
to reimburse the Initial Purchasers and their officers, directors and each
person, if any, who controls such Initial Purchasers within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act for any and all fees and
expenses (including without limitation the fees and expenses of counsel)
incurred by them in connection with enforcing their rights under this Agreement
(including without limitation its rights under Section 8).
(c) Except as otherwise provided, this Agreement has been and
is made solely for the benefit of and shall be binding upon the Company, the
Guarantors, the Initial Purchasers, the Initial Purchasers' directors and
officers, any controlling persons referred to herein, the directors of the
Company and the Guarantors and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Restricted Notes from the
Initial Purchasers merely because of such purchase.
(d) This Agreement shall be governed and construed in
accordance with the laws of the State of New York.
(e) This Agreement may be signed in various counterparts and
by facsimile which together shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
18
<PAGE> 20
Please confirm that the foregoing correctly sets forth the agreement
among the undersigned.
Very truly yours,
SCHUFF STEEL COMPANY
By:______________________________________
Name: Scott A. Schuff
Title: President, Chief Executive
Officer and Director
B & K STEEL FABRICATIONS, INC.
By:______________________________________
Name: Scott A. Schuff
Title: President
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
JEFFERIES & COMPANY INC.
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
BY: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:______________________________________
Name: Thomas H. Roberts III
Title: Vice President
19
<PAGE> 21
SCHEDULE A
GUARANTORS
Addison Structural Services, Inc.
Addison Steel, Inc.
Quincy Joist Company
B & K Steel Fabrications, Inc.
<PAGE> 22
SCHEDULE B
<TABLE>
<CAPTION>
Initial Purchasers Principal Amount
------------------ ----------------
of Notes
--------
<S> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation.......... $ 66,500,000
Jefferies & Company, Inc........... $ 28,500,000
Friedman, Billings, Ramsey
& Co., Inc..................... $ 5,000,000
Total.............................. $100,000,000
</TABLE>
<PAGE> 23
SCHEDULE C
SUBSIDIARIES
Addison Structural Services, Inc.
Addison Steel, Inc.
Quincy Joist Company
B & K Steel Fabrications, Inc.
<PAGE> 24
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
<PAGE> 25
EXHIBIT B
FORM OF OPINION
<PAGE> 1
Exhibit 10.2
SCHUFF STEEL COMPANY
as Issuer
$100,000,000
10 1/2% Notes due 2008
---------------
INDENTURE
Dated as of June 4, 1998
---------------
HARRIS TRUST COMPANY OF CALIFORNIA
as Trustee
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................1
SECTION 1.1 Definitions...........................................................................1
SECTION 1.2 Other Definitions....................................................................26
SECTION 1.3 Incorporation By Reference of Trust Indenture Act....................................26
SECTION 1.4 Rules of Construction................................................................26
ARTICLE 2. THE NOTES.............................................................................................28
SECTION 2.1 Form and Dating......................................................................28
SECTION 2.2 Execution and Authentication.........................................................30
SECTION 2.3 Registrar and Paying Agent...........................................................31
SECTION 2.4 Paying Agent to Hold Money in Trust..................................................31
SECTION 2.5 Holder Lists.........................................................................32
SECTION 2.6 Transfer and Exchange................................................................32
SECTION 2.7 Replacement of Notes.................................................................42
SECTION 2.8 Outstanding Notes....................................................................42
SECTION 2.9 Treasury Notes.......................................................................42
SECTION 2.10 Temporary Notes......................................................................43
SECTION 2.11 Cancellation.........................................................................43
SECTION 2.12 Payment of Interest; Interest Rights Preserved.......................................43
SECTION 2.13 Computation of Interest..............................................................44
SECTION 2.14 CUSIP Number.........................................................................44
ARTICLE 3. REDEMPTION AND PREPAYMENT.............................................................................45
SECTION 3.1 Notices to Trustee...................................................................45
SECTION 3.2 Selection of Notes to be Redeemed....................................................45
SECTION 3.3 Notice of Redemption.................................................................45
SECTION 3.4 Effect of Notice of Redemption.......................................................46
SECTION 3.5 Deposit of Redemption Price..........................................................46
SECTION 3.6 Notes Redeemed in Part...............................................................47
SECTION 3.7 Optional Redemption..................................................................47
ARTICLE 4. COVENANTS.............................................................................................48
SECTION 4.1 Payment of Notes.....................................................................48
SECTION 4.2 Maintenance of Office or Agency......................................................48
SECTION 4.3 Corporate Existence..................................................................49
SECTION 4.4 Maintenance of Properties and Insurance..............................................49
SECTION 4.5 Compliance With Laws.................................................................49
SECTION 4.6 Reports..............................................................................50
SECTION 4.7 Taxes and Other Claims...............................................................50
SECTION 4.8 Stay, Extension and Usury Laws.......................................................50
SECTION 4.9 Change of Control....................................................................51
SECTION 4.10 Transactions With Affiliates.........................................................53
SECTION 4.11 Limitation on Restricted Payments....................................................53
SECTION 4.12 Limitation on Indebtedness...........................................................55
SECTION 4.13 Limitation on Subsidiary Indebtedness and Preferred Stock............................55
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
SECTION 4.14 Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries.........................................................................56
SECTION 4.15 Limitation on Asset Sales............................................................57
SECTION 4.16 Limitation on Sale and Lease-Back Transactions.......................................60
SECTION 4.17 Limitation on Liens..................................................................60
SECTION 4.18 Limitation on Guarantees by Subsidiaries.............................................60
SECTION 4.19 Unrestricted Subsidiaries............................................................60
SECTION 4.20 Limitations on Line of Business......................................................61
SECTION 4.21 Compliance Certificate; Notice of Default or Event of Default........................61
SECTION 4.22 Prohibition on Company and Guarantors Becoming an Investment Company.................62
ARTICLE 5. CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER..................................................62
SECTION 5.1 Consolidation, Merger, Conveyance, Lease or Transfer.................................62
SECTION 5.2 Successor Corporation Substituted....................................................64
ARTICLE 6. DEFAULTS AND REMEDIES.................................................................................65
SECTION 6.1 Events of Default....................................................................65
SECTION 6.2 Acceleration.........................................................................67
SECTION 6.3 Other Remedies.......................................................................68
SECTION 6.4 Waiver of Past Defaults..............................................................68
SECTION 6.5 Control By Majority..................................................................69
SECTION 6.6 Limitation on Suits..................................................................69
SECTION 6.7 Rights of Holders of Notes to Receive Payment........................................70
SECTION 6.8 Collection Suit by Trustee...........................................................70
SECTION 6.9 Trustee May File Proofs of Claim.....................................................70
SECTION 6.10 Priorities...........................................................................71
SECTION 6.11 Undertaking For Costs................................................................72
SECTION 6.12 Restoration of Rights and Remedies...................................................72
SECTION 6.13 Rights and Remedies Cumulative.......................................................72
SECTION 6.14 Delay or Omission Not Waiver.........................................................72
ARTICLE 7. TRUSTEE...............................................................................................73
SECTION 7.1 Duties of Trustee....................................................................73
SECTION 7.2 Rights of Trustee....................................................................74
SECTION 7.3 Individual Rights of Trustee.........................................................75
SECTION 7.4 Trustee's Disclaimer.................................................................75
SECTION 7.5 Notice of Defaults...................................................................76
SECTION 7.6 Reports by Trustee to Holders of the Notes...........................................76
SECTION 7.7 Compensation and Indemnity...........................................................76
SECTION 7.8 Replacement of Trustee...............................................................77
SECTION 7.9 Successor Trustee by Merger, Etc. ...................................................79
SECTION 7.10 Eligibility; Disqualification........................................................79
SECTION 7.11 Preferential Collection of Claims Against the Company................................79
ARTICLE 8. SATISFACTION AND DISCHARGE............................................................................79
SECTION 8.1 Satisfaction and Discharge...........................................................79
SECTION 8.2 Application of Trust Money...........................................................80
SECTION 8.3 Repayment of the Company.............................................................81
SECTION 8.4 Reinstatement........................................................................81
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
ARTICLE 9. DEFEASANCE AND COVENANT DEFEASANCE....................................................................81
SECTION 9.1 Option to Effect Defeasance or Covenant Defeasance...................................81
SECTION 9.2 Defeasance and Discharge.............................................................82
SECTION 9.3 Covenant Defeasance..................................................................82
SECTION 9.4 Conditions to Defeasance or Covenant Defeasance......................................83
SECTION 9.5 Deposited Money and U.S. Government Obligations To Be Held in Trust; Other
Miscellaneous Provisions.............................................................84
SECTION 9.6 Repayment to the Company.............................................................85
SECTION 9.7 Reinstatement........................................................................86
ARTICLE 10. AMENDMENT, SUPPLEMENT AND WAIVER.....................................................................86
SECTION 10.1 Without Consent of Holders of Notes..................................................86
SECTION 10.2 With Consent of Holders of Notes.....................................................87
SECTION 10.3 Effect of Supplemental Indentures....................................................89
SECTION 10.4 Compliance with Trust Indenture Act..................................................89
SECTION 10.5 Revocation and Effect of Consents....................................................89
SECTION 10.6 Notation on or Exchange of Notes.....................................................90
SECTION 10.7 Trustee to Sign Supplemental Indentures..............................................90
SECTION 10.8 Payment for Consent..................................................................91
ARTICLE 11. MISCELLANEOUS........................................................................................91
SECTION 11.1 Trust Indenture Act Controls.........................................................91
SECTION 11.2 Notices..............................................................................91
SECTION 11.3 Communication By Holders of Notes With Other Holders of Notes........................93
SECTION 11.4 Certificate and Opinion as to Conditions Precedent...................................94
SECTION 11.5 Statements Required in a Certificate or Opinion......................................94
SECTION 11.6 Acts of Holders......................................................................94
SECTION 11.7 Rules by Trustee and Agents..........................................................95
SECTION 11.8 No Personal Liability of Directors, Officers, Employees and Stockholders.............96
SECTION 11.9 Governing Law........................................................................96
SECTION 11.10 Agent for Service; Submission to Jurisdiction; Waiver of Immunities 96
SECTION 11.11 No Adverse Interpretation of Other Agreements........................................97
SECTION 11.12 Successors...........................................................................97
SECTION 11.13 Severability.........................................................................97
SECTION 11.14 Counterpart Originals................................................................97
SECTION 11.15 Table of Contents, Headings, Etc. ...................................................97
ARTICLE 12. GUARANTEES...........................................................................................98
SECTION 12.1 Guarantors...........................................................................98
SECTION 12.2 Limitation on Liability.............................................................101
SECTION 12.3 Execution and Delivery of Guarantees................................................101
SECTION 12.4 When A Guarantor May Merge, Etc. ...................................................101
SECTION 12.5 No Waiver...........................................................................102
SECTION 12.6 Modification........................................................................102
SECTION 12.7 Release of Guarantor................................................................103
SECTION 12.8 Future Guarantors; Execution of Supplemental Indentures for Future
Guarantors..........................................................................104
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
SCHEDULES
<S> <C>
SCHEDULE 1.1(a) ................. Existing Indebtedness
SCHEDULE 1.1(b) ................. Existing Investments
SCHEDULE 4.11 ................. Existing Lease Agreements with Affiliates
SCHEDULE 4.13 ................. Existing Subsidiary Indebtedness
SCHEDULE A ................. Guarantors
</TABLE>
iii
<PAGE> 6
EXHIBITS
<TABLE>
<CAPTION>
<S> <C>
EXHIBIT A ............ Form of Note
EXHIBIT B-1 ............ Form of Certificate for Exchange or Registration of Transfer from U.S.
Global Note to Regulation S Global Note
EXHIBIT B-2 ............ Form of Certificate for Exchange or Registration of Transfer from
Regulation S Global Note to U.S. Global Note
EXHIBIT B-3 ............ Form of Certificate for Exchange or Registration of Transfer of
Certificated Notes
EXHIBIT B-4 ............ Form of Certificate for Exchange or Registration of Transfer from U.S.
Global Note or Regulation S Global Note to Certificated Note
EXHIBIT C ............ Form of Certificate From Acquiring Institutional Accredited Investor
</TABLE>
iv
<PAGE> 7
INDENTURE, dated as of June 4, 1998, among Schuff Steel Company,
a Delaware corporation (the "Company"), each of the subsidiaries listed on
Schedule A hereto (each a "Guarantor" and, collectively, the "Guarantors"), and
Harris Trust Company of California, a California trust company, as trustee (the
"Trustee").
RECITALS
The Company has duly authorized the creation and issuance of its
10 1/2% Senior Notes due 2008 (the "Initial Notes") of substantially the tenor
and amount hereinafter set forth; and to provide therefor and for, if and when
issued as further evidence of the Company's indebtedness and in substitution for
the Notes pursuant to this Indenture and the Registration Rights Agreement (as
defined herein), the Company's 10 1/2% Senior Notes due 2008 (the "Exchange
Notes," and together with the Notes, the "Notes"), the Company has duly
authorized the execution and delivery of this Indenture.
All things necessary to make the Notes, when executed by the
Company and authenticated and delivered by the Trustee hereunder and duly issued
by the Company, the valid obligations of the Company, and to make this Indenture
a valid instrument of the Company and the Guarantors, in accordance with their
respective terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in
consideration of the premises and the purchase of the Initial Notes by the
Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.1 Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
"Acquired Indebtedness" means, with respect to any specified
Person, Indebtedness of any other Person existing at the time such other Person
merged with or into or became a subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a subsidiary of such specified Person,
but excluding Indebtedness which is extinguished, retired or repaid in
connection with such other Person merging with or into or becoming a subsidiary
of such specified Person.
<PAGE> 8
"Adjusted Net Assets" of a Guarantor at any date shall mean the
amount by which the fair value of the Property and other assets of such
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Guarantee of such Guarantor.
"Affiliate" of any specified Person means another Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of beneficial interests in a Global Note, the rules and procedures of
the Depository that apply to such transfer and exchange.
"Asset Acquisition" means (a) an Investment by the Company or any
Subsidiary in any other Person pursuant to which such Person becomes a
Subsidiary or is merged with or into the Company or any Subsidiary or (b) the
acquisition by the Company or any Subsidiary of the assets of any Person (other
than a Subsidiary) which constitute all or substantially all of the assets of
such Person or comprise any division or line of business of such Person.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease or other disposition (including, without limitation, by way of
merger or consolidation or by means of a Sale and Lease-Back Transaction) by the
Company or any Subsidiary to any Person other than the Company or a Subsidiary,
in one transaction, or a series of related transactions, of (i) any Capital
Stock of any Subsidiary (except for directors' qualifying shares or certain
minority interests sold to other Persons solely due to local law requirements
that there be more than one stockholder, but which are not in excess of what is
required for such purpose), or (ii) any other Property or assets of the Company
or any Subsidiary, other than (A) sales of obsolete or worn out equipment in the
ordinary course of business or other assets that, in the Company's reasonable
judgment, are no longer used or useful in the conduct of the business of the
Company and its Subsidiaries), (B) a Restricted Payment or Restricted Investment
permitted under Section 4.11, (C) a Change of Control, (D) a consolidation,
merger, continuance or the disposition of all or substantially all of the assets
of the Company and the Subsidiaries, taken as a whole, in compliance with
Article 5 and (E) any transfer, conveyance, sale, lease or other disposition of
Property or assets, the gross proceeds of which (exclusive of indemnities) do
not exceed $25,000. An Asset Sale shall include the requisition
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<PAGE> 9
of title to, seizure of or forfeiture of any Property or assets, or any actual
or constructive total loss or an agreed or compromised total loss of any
Property or assets.
"Attributable Indebtedness" in respect of a Sale and Lease-Back
Transaction means, at any date of determination, the present value (discounted
at the interest rate borne by the Notes, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease (or to the first date on which the lessee is permitted to terminate such
lease without the payment of a penalty) included in such Sale and Lease-Back
Transaction (including any period for which such lease has been extended).
"Average Life" means, as of any date, with respect to any debt
security, the quotient obtained by dividing (i) the sum of the products of (x)
the number of years from such date to the date of each scheduled principal
payment (including any sinking fund or mandatory redemption payment
requirements) of such debt security multiplied in each case by (y) the amount of
such principal payment by (ii) the sum of all such principal payments.
"Board of Directors" of any Person means the Board of Directors
of such Person, or any authorized committee of such Board of Directors.
"Board Resolution" means a copy of a resolution certified by a
Secretary or Assistant Secretary of the Company or a Subsidiary of the Company
to have been duly adopted by the Board of Directors thereof and to be in full
force and effect on the date of such certification and delivered to the Trustee.
"Borrowing Base" means, at any date of determination, an amount
equal to 75% of the accounts receivable owned by the Company and its
Subsidiaries that are not more than 90 days past due and 60% of the inventory of
the Company and its Subsidiaries, each as calculated on a consolidated basis in
accordance with GAAP as shown on the last financial statements delivered to the
Trustee pursuant to Section 4.6.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at any time as to any Person
with respect to any Property leased by such Person as lessee, the amount of the
liability with respect to such lease that would be required at such time to be
capitalized and accounted for as a capital lease on the balance sheet of such
Person prepared in accordance with GAAP.
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<PAGE> 10
"Capital Stock" in any Person means any and all shares,
interests, partnership interests, participations or other equivalents in the
equity interest (however designated) in such Person and any rights (other than
debt securities convertible into an equity interest), warrants or options to
acquire any equity interest in such Person.
"Cash Proceeds" means, with respect to any Asset Sale by any
Person, the aggregate consideration received for such Asset Sale by such Person
in the form of cash or cash equivalents (including any amounts of insurance or
other proceeds received in connection with an Asset Sale of the type described
in the last sentence of the definition thereof or marketable securities that are
converted into cash or cash equivalents within 30 days of an Asset Sale),
including payments in respect of deferred payment obligations when received in
the form of cash or cash equivalents (except to the extent that such obligations
are financed or sold with recourse to such Person or any subsidiary thereof).
"Cedel" means Cedel Bank, societe anonyme.
"Certificated Notes" means Notes that are substantially in the
form of the Note attached hereto as Exhibit A, that do not include the
information or text called for by footnotes 1, 2 and 3 thereto.
"Change of Control" means (i) any Person or group (as defined in
Section 13(d)(3) or 14(d)(2) of the Exchange Act) other than Permitted Holders
becomes the direct or beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of more than 50% of the voting power of the outstanding Voting
Stock of the Company; (ii) the Company is merged with or into or consolidated
with another corporation and, immediately after giving effect to the merger or
consolidation, less than 50% of the outstanding voting securities entitled to
vote generally in the election of directors or persons who serve similar
functions of the surviving or resulting entity are then beneficially owned
(within the meaning of Rule 13d-3 of the Exchange Act) in the aggregate by (x)
the stockholders of the Company immediately prior to such merger or
consolidation, or (y) if the record date has been set to determine the
stockholders of the Company entitled to vote on such merger or consolidation,
the stockholders of the Company as of such a record date; (iii) the Company,
either individually or in conjunction with one or more Subsidiaries, sells,
conveys, transfers or leases, or the Subsidiaries sell, convey, transfer or
lease, all or substantially all of the assets of the Company or the Company and
the Subsidiaries, taken as a whole (either in one transaction or a series of
related transactions), including Capital Stock of the Subsidiaries, to any
Person (other than a Wholly Owned Subsidiary); (iv) the liquidation or
dissolution of the Company; or (v) the first day on which a majority of the
individuals who constitute the Board of Directors of the Company are not
Continuing Directors.
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<PAGE> 11
"Commission" means the U.S. Securities and Exchange Commission,
as from time to time constituted, created under the Exchange Act, or if at any
time after the date of execution of this Indenture, such commission is not
existing and performing the duties assigned to it under the Trust Indenture Act,
the body performing such duties at such time.
"Common Stock" means Capital Stock other than Preferred Stock.
"Company Order" means a written order or request signed in the
name of an Officer and delivered to the Trustee.
"Company" means the Person named as such in the preamble of this
Indenture unless and until a successor replaces it pursuant to the applicable
provisions hereof and thereafter means such successor.
"Consolidated Interest Coverage Ratio" means as of the date of
the transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date"), the ratio of (a) the aggregate amount
of EBITDA of the Company and its consolidated Subsidiaries for the four fiscal
quarters for which financial information in respect thereof is available
immediately prior to the applicable Transaction Date (the "Determination
Period") to (b) the aggregate Consolidated Interest Expense of the Company and
its consolidated Subsidiaries for such Determination Period. In addition to and
without limitation of the foregoing, for purposes of this definition, "EBITDA"
and "Consolidated Interest Expense" shall be calculated after giving effect on a
pro forma basis to (i)(a) the incurrence of any Indebtedness of the Company or
any of its Subsidiaries (and the application of the proceeds thereof) giving
rise to the need to make such calculation and (b) any incurrence or repayment of
other Indebtedness (and the application of the proceeds thereof) occurring on or
after the first day of the Determination Period and on or prior to the
Transaction Date, in each case set forth in clauses (i)(a) and (b), as if such
incurrence or repayment, as the case may be, (and the application of proceeds
thereof) occurred on the first day of the Determination Period (except that
Indebtedness under any revolving credit facility shall be deemed to be the
average daily balance of such Indebtedness during such Determination Period) and
(ii) any Asset Sales or Asset Acquisitions (including (x) any Person who becomes
a Subsidiary as a result of any such Asset Acquisition and including any Asset
Sale or Asset Acquisition during such Determination Period by any such Person
determined as if such Person had been a Subsidiary at the time of such
transaction; provided that all Indebtedness of the Company and any such
Subsidiaries shall be deemed to have been incurred on the first day of the
Determination Period and (y) the increase or decrease, as the case may be, in
EBITDA directly attributable to such Asset Sale or Asset Acquisition, as the
case may be) occurring on or after the first day of the Determination Period and
on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition,
as the case may be, (including the issuance, assumption or liability for any
such Acquired Indebtedness) occurred on the first day of the Determination
Period. For purposes of this definition, whenever pro forma effect is to be
given to an Asset Acquisition, the amount of income or earnings relating thereto
and the amount of Consolidated Interest Expense associated with any Indebtedness
incurred in connection therewith shall be determined in goodfaith by a
responsible financial or accounting officer of the Company.
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<PAGE> 12
"Consolidated Interest Expense" means, with respect to any Person
for any period, without duplication (A) the sum of (i) the aggregate amount of
cash and noncash interest expense (including capitalized interest) of such
Person and its subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP in respect of Indebtedness (including, without
limitation, (x) net costs associated with Interest Swap Obligations (including
any amortization of discounts), (y) the interest portion of any deferred payment
obligation calculated in accordance with the effective interest method, and (z)
all accrued interest and paid or accrued, or scheduled to be paid or accrued,
during such period); (ii) dividends on Preferred Stock or Redeemable Stock of
such Person (and Preferred Stock or Redeemable Stock of its subsidiaries if paid
to a Person other than such Person or its subsidiaries) declared and payable in
cash; (iii) the portion of any rental obligation of such Person or its
subsidiaries in respect of any Capital Lease Obligation allocable to interest
expense in accordance with GAAP; (iv) the portion of any rental obligation of
such Person or its subsidiaries in respect of any Sale and Lease-Back
Transaction allocable to interest expense (determined as if such were treated as
a Capital Lease Obligation); and (v) to the extent any debt of any other Person
is guaranteed by such Person or any of its subsidiaries, the aggregate amount of
interest paid, accrued or scheduled to be paid or accrued, by such other Person
during such period attributable to any such debt, less (B) to the extent
included in (A) above, amortization or write-off of deferred financing costs of
such Person and its subsidiaries during such period and any charge related or
any premium or penalty paid in connection with redeeming or retiring any
Indebtedness of such Person and its subsidiaries prior to its stated maturity;
in the case of both (A) and (B) above, after elimination of intercompany
accounts among such Person and its subsidiaries and as determined in accordance
with GAAP. For purposes of clause (ii) above, dividend requirements attributable
to any Preferred Stock or Redeemable Stock shall be deemed to be an amount equal
to the amount of dividend requirements on such Preferred Stock or Redeemable
Stock times a fraction, the numerator of which is one, and the denominator of
which is one minus the applicable combined federal, state, local and foreign
income tax rate of the Company and its Subsidiaries (expressed as a decimal), on
a consolidated basis, for the fiscal year immediately preceding the date of the
transaction giving rise to the need to calculate Consolidated Interest Expense.
"Consolidated Net Income" of any Person means, for any period,
the aggregate net income (or net loss, as the case may be) of such Person and
its subsidiaries for such period on a consolidated basis, determined in
accordance with GAAP, provided that there shall be excluded therefrom, without
duplication, (i) any net income of any Unrestricted Subsidiary, except that the
Company's or any Subsidiary's interest in the net income of such Unrestricted
Subsidiary for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash or cash equivalents actually distributed by such
Unrestricted Subsidiary during such period to the Company or a Subsidiary as a
dividend or other distribution, (ii) gains and losses, net of taxes, from Asset
Sales or reserves relating thereto, (iii) the net income of any Person that is
not a subsidiary or that is accounted for by the equity method of accounting
which shall be included only to the extent of the amount of dividends or
distributions paid to such Person or its subsidiaries, (iv) items (but not loss
items) classified as extraordinary, unusual or nonrecurring (other than the tax
benefit, if any, of the utilization of net operating loss carryforwards or
alternative minimum tax credits), (v) the net income (or net loss) of any Person
acquired by such specified Person or any of its subsidiaries in a
pooling-of-interests transaction for any period prior to the date of such
acquisition, (vi) any gain or loss, net of taxes, realized on the termination of
any employee pension benefit plan, (vii) the net income (but not net loss) of
any subsidiary of such specified Person to the extent that the transfer
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<PAGE> 13
to that Person of that income is not at the time permitted, directly or
indirectly, by any means (including by dividend, distribution, advance or loan
or otherwise), or by operation of the terms of its charter or any agreement with
a Person other than with such specified Person, instrument held by a Person
other than by such specified Person, judgment, decree, order, statute, law, rule
or governmental regulations applicable to such subsidiary or its stockholders,
except for any dividends or distributions actually paid by such subsidiary to
such Person, and (viii) with regard to a non-Wholly Owned Subsidiary, any
aggregate net income (or loss) in excess of such Person's or such subsidiary's
pro rata share of such non-Wholly Owned Subsidiary's net income (or loss).
"Consolidated Net Worth" of any Person means, as of any date, the
sum of the Capital Stock and additional paid-in capital plus retained earnings
(or minus accumulated deficit) of such Person and its subsidiaries on a
consolidated basis at such date, each item determined in accordance with GAAP,
less amounts attributable to Redeemable Stock of such Person or any of its
subsidiaries.
"Continuing Director" means an individual who (i) is a member of
the Board of Directors of the Company and (ii) either (A) was a member of the
Board of Directors of the Company on the Issue Date or (B) whose nomination for
election or election to the Board of Directors of the Company was approved by
vote of at least a majority of the directors then still in office who were
either directors on the Issue Date or whose election or nomination for election
was previously so approved.
"Corporate Trust Office of the Trustee" shall be at the address
of the Trustee specified in Section 11.2 hereof or such other address as to
which the Trustee may give notice to the Company.
"Currency Hedge Obligations" means, at any time as to any Person,
the obligations of such Person at such time which were incurred in the ordinary
course of business pursuant to any foreign currency exchange agreement, option
or future contract or other similar agreement or arrangement designed to protect
against or manage such Person's or any of its subsidiaries' exposure to
fluctuations in foreign currency exchange rates.
"Default" means any event, act or condition the occurrence of
which is, or after notice or the passage of time or both would be, an Event of
Default.
"Depository" means, with respect to the Notes issuable or issued
in whole or in part in global form, the Person specified in Section 2.3 hereof
as the Depository with respect to the Notes, until a successor shall have been
appointed and become such Depository pursuant to the applicable provision of
this Indenture, and, thereafter, "Depository" shall mean or include such
successor.
"Determination Period" has the meaning specified in clause (a) of
the definition of "Consolidated Interest Coverage Ratio."
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<PAGE> 14
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period, plus to the extent
reflected in the income statement of such Person for such period from which
Consolidated Net Income is determined, without duplication, (i) Consolidated
Interest Expense, (ii) income tax expense, (iii) depreciation expense, (iv)
amortization expense, (v) any charge related to any premium or penalty paid in
connection with redeeming or retiring any Indebtedness prior to its stated
maturity, (vi) any one-time write-off of non-recurring closing costs incurred in
connection with any merger consummated after the Issue Date and (vii) any other
non-cash charges minus, to the extent reflected in such income statement, any
noncash credits that had the effect of increasing Consolidated Net Income of
such Person for such period.
"Euroclear" means the Euroclear System.
"Existing Credit Facility" means that certain Revolving Line of
Credit Agreement dated as of June 30, 1995 by and between the Company and Bank
One, Arizona, N.A. ("Bank One"), that certain Loan Agreement dated as of June
30, 1996, by and between the Company and Bank One, Arizona, N.A. and that
certain Credit Agreement dated as of December 10, 1997 by and between the
Company and Bank One, Arizona, N.A., all as may have been modified, supplemented
or amended to the date of this Indenture.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
"Exchange Global Note" means one or more Global Notes that do not
and are not required to bear the Private Placement Legend.
"Exchange Notes" has the meaning set forth in the Recitals to
this Indenture and more particularly means any of the Notes authenticated and
delivered under this Indenture pursuant to the Exchange Offer.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Exchange Notes for
Initial Notes.
"Exchange Offer Registration Statement" has the meaning set forth
in the Registration Rights Agreement.
"Fair Market Value" means, with respect to consideration received
or to be received pursuant to any transaction by any Person, the fair market
value of such consideration as determined in good faith by the Board of
Directors of the Company and, in the case of a determination including a Fair
Market Value in excess of $1,000,000, shall be evidenced by a Board Resolution.
8
<PAGE> 15
"Fair Value" means, with respect to any asset or Property, the
price which could be negotiated in an arm's-length free market transaction, for
cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction.
"GAAP" means, at any date, United States generally accepted
accounting principles, consistently applied, as set forth in the opinions of the
Accounting Principles Board of the American Institute of Certified Public
Accountants ("AICPA") and statements of the Financial Accounting Standards
Board, or in such other statements by such other entity as may be designated by
the AICPA, that are applicable to the circumstances as of the date of
determination; provided, however, that all calculations made for purposes of
determining compliance with the provisions set forth herein shall utilize GAAP
in effect at the Issue Date.
"Global Note" means, individually and collectively, the
Regulation S Global Notes, the U.S. Global Notes and the Exchange Global Notes.
"Guarantee" means any guarantee of the Notes by any Guarantor in
accordance with the provisions described in Article 12.
"Guarantor" means the Initial Guarantors and each other future
Subsidiary of the Company that is required to guarantee the Company's
Obligations under the Notes and this Indenture as described in Sections 4.18 and
12.1 and any other Subsidiary of the Company that executes a supplemental
indenture in which such Subsidiary agrees to guarantee the Company's Obligations
under the Notes and this Indenture.
"Holder" means a Person in whose name a Note is registered on the
Registrar's books.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, suffer to exist, incur (by
conversion, exchange or otherwise), assume, guarantee or otherwise become liable
in respect of such Indebtedness or other obligation or the recording, as
required pursuant to GAAP or otherwise, of any such Indebtedness or obligation
on the balance sheet of such Person (and "incurrence," "incurred," "incurable"
and "incurring" shall have meanings correlative to the foregoing); provided that
a change in GAAP that results in an obligation of such Person that exists at
such time becoming Indebtedness shall not be deemed an incurrence of such
Indebtedness. Indebtedness otherwise incurred by a Person before it becomes a
Subsidiary shall be deemed to have been incurred at the time at which it becomes
a Subsidiary. A guarantee otherwise permitted by this Indenture to be incurred
by the Company or a Subsidiary of the Company of Indebtedness incurred in
compliance with the terms herein by the Company or a Subsidiary of the Company,
as applicable, shall not constitute a separate incurrence of Indebtedness.
"Indebtedness" as applied to any Person means, at any time,
without duplication, whether recourse is to all or a portion of the assets of
such Person, and whether or not contingent, (i) any obligation of such Person
for borrowed money; (ii) any obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including, without limitation,
any such
9
<PAGE> 16
obligations incurred in connection with acquisition of Property, assets or
businesses, excluding accounts payable made in the ordinary course of business
which are not more than 90 days overdue or which are being contested in good
faith and by appropriate proceedings; (iii) any obligation of such Person for
all or any part of the purchase price of Property or assets or for the cost of
Property constructed or of improvements thereto (including any obligation under
or in connection with any letter of credit related thereto), other than accounts
payable incurred in respect of Property and services purchased in the ordinary
course of business which are no more than 90 days overdue or which are being
contested in good faith and by appropriate proceedings; (iv) any obligation of
such Person upon which interest charges are customarily paid (other than
accounts payable incurred in the ordinary course of business); (v) any
obligation of such Person under conditional sale or other title retention
agreements relating to purchased Property; (vi) any obligation of such Person
issued or assumed as the deferred purchase price of Property or assets (other
than accounts payable incurred in the ordinary course of business which are no
more than 90 days overdue or which are being contested in good faith and by
appropriate proceedings); (vii) any Capital Lease Obligation or Attributable
Indebtedness pursuant to any Sale and Lease-Back Transaction of such Person;
(viii) any obligation of any other Person secured by (or for which the obligee
thereof has an existing right, contingent or otherwise, to be secured by) any
Lien on Property owned or acquired, whether or not any obligation secured
thereby has been assumed, by such Person; (ix) any obligation of such Person in
respect of any letter of credit supporting any obligation of any other Person;
(x) the maximum fixed repurchase price of any Redeemable Stock of such Person
(or if such Person is a subsidiary, any Preferred Stock of such Person); (xi)
the notional amount of any Interest Swap Obligation or Currency Hedge Obligation
of such Person at the time of determination; and (xii) any obligation which is
in economic effect a guarantee, regardless of its characterization (other than
an endorsement in the ordinary course of business), with respect to any
Indebtedness of another Person, to the extent guaranteed. For purposes of the
preceding sentence, the maximum fixed repurchase price of any Redeemable Stock
or subsidiary Preferred Stock that does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Redeemable Stock or
subsidiary Preferred Stock as if such Redeemable Stock or subsidiary Preferred
Stock were repurchased on any date on which Indebtedness shall be required to be
determined pursuant to this Indenture; provided that if such Redeemable Stock or
subsidiary Preferred Stock is not then permitted to be repurchased, the
repurchase price shall be the book value of such Redeemable Stock or subsidiary
Preferred Stock. The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and the maximum liability of any guarantees at such date;
provided, further, that for purposes of calculating the amount of any
non-interest bearing or other discount security, such Indebtedness shall be
deemed to be the principal amount thereof that would be shown on the balance
sheet of the issuer dated such date prepared in accordance with GAAP but that
such security shall be deemed to have been incurred only on the date of the
original issuance thereof.
"Indenture" means this Indenture, as amended or supplemented from
time to time by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof, including for all purposes of this
Indenture and any supplemental indenture the provisions of the Trust Indenture
Act that are deemed to be a part of and govern this Indenture and any
supplemental indenture.
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<PAGE> 17
"Indirect Participant" means a Person who holds an interest
through a Participant.
"Initial Guarantors" means all of the Company's subsidiaries as
of the close of business on the Issue Date.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette
Securities Corporation, Jefferies & Company, Inc. and Friedman, Billings, Ramsey
& Co., Inc.
"Initial Notes" has the meaning set forth in the Recitals to this
Indenture and more particularly means any of the Notes authenticated and
delivered under this Indenture other than Exchange Notes.
"Institutional Accredited Investor" means an entity which is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Interest Swap Obligation" means, with respect to any Person, the
obligation of such Person pursuant to any interest rate swap agreement, interest
rate cap, collar or floor agreement or other similar agreement or arrangement
designed to protect against or manage such Person's or any of its subsidiaries'
exposure to fluctuations in interest rates.
"Investment" means, with respect to any Person, any direct,
indirect or contingent investment in another Person, whether by means of a share
purchase, capital contribution, loan, advance (other than advances to employees
for moving and travel expenses, drawing accounts and similar expenditures in the
ordinary course of business) or similar credit extension constituting
Indebtedness of such other Person, and any guarantee of Indebtedness of any
other Person; provided that the term "Investment" shall not include any
transaction involving the purchase or other acquisition (including by way of
merger) of Property or assets (including Capital Stock) by the Company or any
Subsidiary in exchange for Capital Stock (other than Redeemable Stock) of the
Company. The amount of any Person's Investment shall be the original cost of
such Investment to such Person, plus the cost of all additions thereto paid by
such Person, and minus the amount of any portion of such Investment repaid to
such Person in cash as a repayment of principal or a return of capital, as the
case may be, but without any other adjustments for increases or decreases in
value, or write-ups, writedowns, or write-offs with respect to such Investment.
In determining the amount of any Investment involving a transfer of any Property
or assets other than cash, such Property or assets shall be valued at its Fair
Value at the time of such transfer as determined in good faith by the board of
directors (or comparable body) of the Person making such transfer. The Company
shall be deemed to make an "Investment" in the amount of the Fair Value of the
Property and assets of a Subsidiary at the time such Subsidiary is designated an
Unrestricted Subsidiary.
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<PAGE> 18
"Issue Date" means the date on which Notes are first
authenticated and delivered under this Indenture.
"Joint Venture" means any Person (other than a Subsidiary)
designated as such by a Board Resolution of the Company and as to which (i) the
Company, any Subsidiary or any Joint Venture owns less than 50% of the Capital
Stock of such Person; (ii) no more than ten unaffiliated Persons own of record
any Capital Stock of such Person; (iii) at all times, each such Person owns the
same proportion of each class of Capital Stock of such Person outstanding at
such time; (iv) no Indebtedness of such Person is or becomes outstanding other
than Non-Recourse Indebtedness; (v) there exist no consensual encumbrances or
restrictions on the ability of such Person to (x) pay, directly or indirectly,
dividends or make any other distributions in respect of its Capital Stock to the
holders of its Capital Stock or (y) pay any Indebtedness or other obligation
owed to the holders of its Capital Stock or (z) make any Investment in the
holders of its Capital Stock, in each case other than the types of consensual
encumbrances or restrictions that would be permitted by Section 4.14 if such
Person were a Subsidiary; and (vi) the business engaged in by such Person is a
Related Business.
"Legal Holiday" means a Saturday, a Sunday or a day on which
federal offices or banking institutions in The City of New York, in the city of
the Corporate Trust Office of the Trustee, or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday, payment may be made on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
"Lien" means any mortgage, pledge, hypothecation, charge,
assignment, deposit arrangement, encumbrance, security interest, lien (statutory
or other), or preference, priority or other security or similar agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any agreement to give or grant a Lien or any lease, conditional sale
or other title retention agreement having substantially the same economic effect
as any of the foregoing).
"Maturity" means the date on which the principal of a Note
becomes due and payable as provided therein or herein, whether at the Stated
Maturity or the Change of Control Payment Date or purchase date established
pursuant to the terms herein for an Asset Sale Offer or by declaration of
acceleration, call for redemption or otherwise.
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"Moody's" means Moody's Investors Service, Inc., or if Moody's
Investors Services, Inc. shall cease rating the specified debt securities and
such ratings business with respect thereto shall have been transferred to a
successor Person , such successor Person.
"Net Available Proceeds" means, as to any Asset Sale, the Cash
Proceeds therefrom, net of all legal and title expenses, commissions and other
fees and expenses incurred, and all Federal, state, foreign, recording and local
taxes payable, as a consequence of such Asset Sale, net of all payments made to
any Person other than the Company or a Subsidiary on any Indebtedness which is
secured by such assets, in accordance with the terms of any Lien upon or with
respect to such assets, or which must by its terms, or in order to obtain a
necessary consent to such Asset Sale, or by applicable law, be repaid out of the
proceeds from such Asset Sale and, as for any Asset Sale by a Subsidiary, net of
the equity interest in such Cash Proceeds of any holder of Capital Stock of such
Subsidiary (other than the Company, any other Subsidiary or any Affiliate of the
Company or any such other Subsidiary).
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of an Unrestricted Subsidiary as to which (a) neither the Company
nor any other Subsidiary (other than an Unrestricted Subsidiary) (i) provides
credit support including any undertaking, agreement or instrument which would
constitute Indebtedness or (ii) is directly or indirectly liable for such
Indebtedness and (b) no default with respect to such Indebtedness (including any
rights which the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any
holder of any other Indebtedness of the Company or its other Subsidiaries to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"Note Custodian" means the Trustee, as custodian for the
Depository with respect to the Notes in global form, or any successor entity
thereto.
"Notes" has the meaning set forth in the Recitals of this
Indenture and more particularly means any of the Notes authenticated and
delivered under this Indenture.
"Obligations" means, with respect to any Indebtedness, any
obligation thereunder, including, without limitation, principal, premium and
interest (including post petition interest thereon), penalties, fees, costs,
expenses, indemnifications, reimbursements, damages and other liabilities.
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<PAGE> 20
"Obligors" means the Company and the Guarantors, collectively;
"Obligor" means the Company or any Guarantor.
"Offering Memorandum" means the Offering Memorandum, dated June
1, 1998, relating to the Company's offering and placement of the Initial Notes.
"Offering" means the Offering of the Initial Notes by the
Company.
"Officer" means, with respect to any Person, the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the President,
the Chief Financial Officer, the Chief Accounting Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary, an Assistant Secretary or
any Vice President of such Person.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President, the Chief
Executive Officer or a Vice President, and by the Chief Financial Officer, the
Chief Accounting Officer, the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary of the Company or a Subsidiary and delivered to the
Trustee, which shall comply with this Indenture.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Sections
11.4 and 11.5 hereof. The counsel may be an employee of or counsel to the
Company, any Subsidiary of the Company or the Trustee.
"Participant" means, with respect to DTC, Euroclear or Cedel, a
Person who has an account with DTC, Euroclear or Cedel, respectively (and, with
respect to DTC, shall include Euroclear and Cedel).
"Permitted Holders" means David A. Schuff and Scott A. Schuff and
any person related to such persons by kinship or marriage, trusts or similar
arrangements established solely on the behalf of one or more of them, and
partnerships and other entities that are controlled by them.
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<PAGE> 21
"Permitted Indebtedness" means (a) Indebtedness of the Company
under the Notes; (b) Indebtedness (and any guarantee thereof) under one or more
credit or revolving credit facilities with a bank or syndicate of banks or
financial institutions, including the Existing Credit Facility, as such may be
amended, modified, revised, extended, replaced, or refunded from time to time,
in an aggregate principal amount at any one time outstanding not to exceed at
the time of incurrence the greater of (i) $25,000,000 or (ii) the Borrowing
Base, less any amounts derived from Asset Sales and applied to the required
permanent reduction of Senior Debt (and a permanent reduction of the related
commitment to lend or amount available to be reborrowed in the case of a
revolving credit facility) under such credit facilities as contemplated by
Section 4.15; (c) Indebtedness of the Company or any Subsidiary under Interest
Swap Obligations, provided that (i) such Interest Swap Obligations are related
to payment obligations on Indebtedness otherwise permitted under the covenants
described in Section 4.12 and Section 4.13 and (ii) the notional principal
amount of such Interest Swap Obligations does not exceed the principal amount of
the Indebtedness to which such Interest Swap Obligations relate; (d)
Indebtedness of the Company or any Subsidiary under Currency Hedge Obligations,
provided that (i) such Currency Hedge Obligations are related to payment
obligations on Indebtedness otherwise permitted under the covenants described in
Section 4.12 and Section 4.13 or to the foreign currency cash flows reasonably
expected to be generated by the Company and the Subsidiaries and (ii) the
notional amount of such Currency Hedge Obligations does not exceed the principal
amount of the Indebtedness and the amount of the foreign currency cash flows to
which such Currency Hedge Obligations relate; (e) Indebtedness of the Company or
any Subsidiary outstanding on the Issue Date and listed on Schedule 1.1(a)
attached hereto (excluding Indebtedness under the Existing Credit Facility which
is permitted under clause (b) of this definition); (f) the Guarantees of the
Notes (and any assumption of the Obligations guaranteed thereby); (g)
Indebtedness of the Company or any Subsidiary in respect of bid and performance
bonds, surety bonds, appeal bonds and letters of credit or similar arrangements
issued for the account of the Company or any Subsidiary, in each case in the
ordinary course of business and other than for an obligation for money borrowed;
(h) Indebtedness of the Company to a Subsidiary and Indebtedness of a Subsidiary
to the Company or another Subsidiary; provided that upon any subsequent event
which results in any such Subsidiary ceasing to be a Subsidiary or any other
subsequent transfer of any such Indebtedness (except to the Company or a
Subsidiary), such Indebtedness shall be deemed, in each case, to be incurred and
shall be treated as an incurrence for purposes of Section 4.12 and Section 4.13
at the time the Subsidiary in question ceased to be a Subsidiary or on which
such subsequent transfer occurred; (i) Indebtedness of the Company in connection
with a purchase of the Notes pursuant to a Change of Control Offer, provided
that the aggregate principal amount of such Indebtedness does not exceed 101% of
the aggregate principal amount at Stated Maturity of the Notes purchased
pursuant to such Change of Control Offer; provided, further, that such
Indebtedness (A) has an Average Life equal to or greater than the remaining
Average Life of the Notes and (B) does not mature prior to one year following
the Stated Maturity of the Notes; (j) Permitted Refinancing Indebtedness; (k)
Permitted Subsidiary Refinancing Indebtedness; and (l) additional Indebtedness
in an aggregate principal amount not to exceed $5,000,000 at any time
outstanding. So as to avoid duplication in determining the amount of Permitted
Indebtedness under any clause of this definition, guarantees permitted to be
incurred pursuant to this Indenture of, or obligations permitted to be incurred
pursuant to this Indenture in respect of letters of credit supporting,
Indebtedness otherwise included in the determination of such amount shall not
also be included.
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<PAGE> 22
"Permitted Investments" means (a) certificates of deposit,
bankers acceptances, time deposits, Eurocurrency deposits and similar types of
Investments routinely offered by commercial banks with final maturities of one
year or less issued by commercial banks organized in the United States, or
foreign branches thereof, having capital and surplus in excess of $500,000,000
or foreign branches thereof, or any commercial bank of any other country that is
a member of the Organization for Economic Cooperation and Development ("OECD")
and has total assets in excess of $500,000,000; (b) commercial paper issued by
any corporation, if such commercial paper has credit ratings of at least "A-1"
or its equivalent by S&P or at least "P-1" or its equivalent by Moody's; (c)
U.S. Government Obligations with a maturity of one year or less; (d) repurchase
obligations for instruments of the type described in clause (c) with any bank
meeting the qualifications specified in clause (a) above; (e) shares of money
market mutual or similar funds having assets in excess of $500,000,000; (f)
payroll advances in the ordinary course of business and other advances and loans
to officers and employees of the Company or any Subsidiary, so long as the
aggregate principal amount of such advances and loans does not exceed $1,000,000
million at any one time outstanding; (g) Investments represented by that portion
of the proceeds from Asset Sales that is not required to be Cash Proceeds by the
covenant described in Section 4.15; (h) Investments made by the Company in
Subsidiaries (or any Person that will be a Subsidiary as a result of such
Investment) or by a Subsidiary in the Company or in one or more Subsidiaries (or
any Person that will be a Subsidiary as a result of such Investment); (i)
Investments in stock, obligations or securities received in settlement of debts
owing to the Company or any Subsidiary as a result of bankruptcy or insolvency
proceedings or upon the foreclosure, perfection or enforcement of any Lien in
favor of the Company or any Subsidiary, in each case as to debt owing to the
Company or any Subsidiary that arose in the ordinary course of business of the
Company or any such Subsidiary; (j) Interest Swap Obligations with respect to
any floating rate Indebtedness that is permitted by the terms of this Indenture
to be outstanding; (k) Currency Hedge Obligations, provided that such Currency
Hedge Obligations constitute Permitted Indebtedness permitted by clause (d) of
the definition thereof; (l) foreign bank deposits and cash equivalents in
jurisdictions where Schuff or its Subsidiaries are then actively conducting
business provided that (i) all such deposits are required to be made in the
ordinary course of business, (ii) such deposits do not exceed $1,000,000 in the
aggregate ad (iii) the funds so deposited do not remain in such bank for more
than 30 days; (m) Investments in prepaid expenses, negotiable instruments held
for collection and lease, utility, worker's compensation and performance and
other similar deposits in the ordinary course of business; and (n) Investments
pursuant to any agreement or obligation of the Company or any Subsidiary in
effect on the Issue Date and listed on a Schedule 1.1(b) attached hereto.
"Permitted Liens" means (a) Liens in existence on the Issue Date;
(b) Liens created for the benefit of the Notes and/or the Guarantees; (c) Liens
on Property of a Person existing at the time such Person is merged or
consolidated with or into the Company or a Subsidiary (and not incurred as a
result of, or in anticipation of, such transaction), provided that any such Lien
relates solely to such Property; (d) Liens on Property existing at the time of
the acquisition thereof (and not incurred as a result of, or in anticipation of
such transaction), provided that any such Lien relates solely to such Property;
(e) Liens incurred or pledges and deposits made in connection with worker's
compensation, unemployment insurance and other social security benefits,
statutory obligations, bid, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business; (f)
Liens imposed by law or arising by operation of law, including, without
limitation, landlords', mechanics', carriers', warehousemen's, materialmen's,
suppliers' and
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<PAGE> 23
vendors' Liens and incurred in the ordinary course of business for sums not
delinquent or being contested in good faith, if such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made with respect thereof; (g) zoning restrictions, easements, licenses,
covenants, reservations, restrictions on the use of real property and defects,
irregularities and deficiencies in title to real property that do not,
individually or in the aggregate, materially affect the ability of the Company
or any Subsidiary to conduct its business as presently conducted; (h) Liens for
taxes or assessments or other governmental charges or levies not yet due and
payable, or the validity of which is being contested by the Company or a
Subsidiary in good faith and by appropriate proceedings upon stay of execution
or the enforcement thereof and for which adequate reserves in accordance with
GAAP or other appropriate provision has been made; (i) Liens to secure
Indebtedness incurred for the purpose of financing all or a part of the purchase
price or construction cost of Property or assets acquired or constructed after
the Issue Date, provided that (1) the principal amount of Indebtedness secured
by such Liens shall not exceed 100% of the lesser of cost or Fair Market Value
of the Property or assets so acquired or constructed plus transaction costs
related thereto, (2) such Liens shall not encumber any other Property or assets
of the Company or any Subsidiary (other than the proceeds thereof and accessions
and upgrades thereto) and (3) such Liens shall attach to such Property or assets
within 120 days of the date of the completion of the construction or acquisition
of such Property or assets; (j) Liens securing Capital Lease Obligations,
provided that such Liens secure Capital Lease Obligations in an aggregate
principal amount not exceeding $1,000,000 at any one time outstanding; (k) Liens
to secure any extension, renewal, refinancing or refunding (or successive
extensions, renewals, refinancings or refundings), i whole or in part, of any
Indebtedness secured by Liens referred to in the foregoing clauses (a), (c) and
(d), provided that such Lien does not extend to any other Property or assets of
the Company or any Subsidiary and the principal amount of the Indebtedness
secured by such Lien is not increased; (l) leases or subleases of real property
to other Persons; (m) judgment liens not giving rise to an Event of Default so
long as any appropriate legal proceedings which may have been initiated for the
review of such judgment shall not have been finally terminated or the period
within which such proceeding may be initiated shall not have expired; (n) rights
of off-set of banks and other Persons; (o) liens in favor of the Company; (p)
Liens securing Indebtedness described under clause (b) and clause (l) of the
definition of Permitted Indebtedness, and (q) Liens securing other Indebtedness
in an aggregate principal amount not exceeding $1,000,000 at any one time
outstanding.
"Permitted Refinancing Indebtedness" means Indebtedness of the
Company, incurred in exchange for, or the net proceeds of which are used to
renew, extend, refinance, refund or repurchase, outstanding Indebtedness of the
Company which outstanding Indebtedness was incurred in accordance with, or is
otherwise permitted by, the terms of clauses (a) and (e) of the definition of
"Permitted Indebtedness", provided that (i) if the Indebtedness being renewed,
extended, refinanced, refunded or repurchased is pari passu with or subordinated
in right of payment (without regard to its being secured) to the Notes, then
such new Indebtedness is pari passu with or subordinated in right of payment
(without regard to its being secured) to, as the case may be, the Notes at least
to the same extent as the Indebtedness being renewed, extended, refinanced,
refunded or repurchased, (ii) such new Indebtedness is scheduled to mature later
than the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, (iii) such new Indebtedness has an Average Life at the time such
Indebtedness is incurred that is greater than the Average Life of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased, and
(iv) such new Indebtedness is in aggregate principal amount (or, if such
Indebtedness is issued at a price less than
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<PAGE> 24
the principal amount thereof, the aggregate amount of gross proceeds therefrom
is) not in excess of the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased (or if
the Indebtedness being renewed, extended, refinanced, refunded or repurchased
was issued at a price less than the principal amount thereof, then not in excess
of the amount of liability in respect thereof determined in accordance with
GAAP) plus the amount of reasonable fees, expenses and premium, if any, incurred
by the Company or such Subsidiary in connection therewith.
"Permitted Subsidiary Refinancing Indebtedness" means
Indebtedness of any Subsidiary, incurred in exchange for, or the net proceeds of
which are used to renew, extend, refinance, refund or repurchase, outstanding
Indebtedness of such Subsidiary which outstanding Indebtedness was incurred in
accordance with, or is otherwise permitted by, the terms of clauses (e) and (f)
of the definition of Permitted Indebtedness, provided that (i) if the
Indebtedness being renewed, extended, refinanced, refunded or repurchased is
pari passu with or subordinated in right of payment (without regard to its being
secured) to the Guarantee of such Subsidiary, then such new Indebtedness is pari
passu with or subordinated in right of payment (without regard to its being
secured) to, as the case may be, the Guarantee of such Subsidiary at least to
the same extent as the Indebtedness being renewed, extended, refinanced,
refunded or repurchased, (ii) such new Indebtedness is scheduled to mature later
than the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, (iii) such new Indebtedness has an Average Life at the time such
Indebtedness is incurred that is greater than the Average Life of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased, and
(iv) such new Indebtedness is in an aggregate principal amount (or, if such
Indebtedness is issued at a price less than the principal amount thereof, the
aggregate amount of gross proceeds therefrom is) not in excess of the aggregate
principal amount then outstanding of the Indebtedness being renewed, extended,
refinanced, refunded or repurchased (or if the Indebtedness being renewed,
extended, refinanced, refunded or repurchased was issued at a price less than
the principal amount thereof, then not in excess of the amount of liability in
respect thereof determined in accordance with GAAP) plus the amount of
reasonable fees, expenses and premium, if any, incurred by the Company or such
Subsidiary in connection therewith.
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<PAGE> 25
"Person" means any individual, corporation, partnership, joint
venture, incorporated or unincorporated association, joint stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Preferred Stock" of any Person means Capital Stock of such
Person of any class or classes (however designated) that ranks prior, as to the
payment of dividends and/or as to the distribution of assets upon any voluntary
or involuntary liquidation, dissolution or winding up of such Person, to shares
of Capital Stock of at least one other class of such Person.
"Property" means, with respect to any Person, any interest of
such Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, excluding Capital Stock in any other Person.
"Public Equity Offering" means an offering of Capital Stock
(other than Redeemable Stock) of the Company for cash pursuant to an effective
registration statement (other than on a Form S-4 or a Form S-8 or any other form
relating to securities issuable under any employee benefit plan of the Company)
under the Securities Act.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Record Date" means, for the interest payment on any Interest
Payment Date, the date specified in Section 2.12 hereof.
"Redeemable Stock" means, with respect to any Person, any equity
security that by its terms or otherwise is required to be redeemed, or is
redeemable at the option of the holder thereof, at any time prior to one year
following the Stated Maturity of the Notes or is exchangeable into Indebtedness
of such Person or any of its subsidiaries.
"Redemption Date" means, when used with respect to any Note or
part thereof to be redeemed hereunder, the date fixed for redemption of such
Notes pursuant to the terms of the Notes and this Indenture.
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<PAGE> 26
"Redemption Price" means, when used with respect to any Note or
part thereof to be redeemed hereunder, the price fixed for redemption of such
Note pursuant to the terms of the Notes and this Indenture, plus accrued and
unpaid interest, if any, and Special Interest, if any, thereon, to the
Redemption Date.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and among the Company and
Initial Purchasers, as such agreement may be amended, modified or supplemented
from time to time.
"Regulation S" means Regulation S under the Securities Act
(including any successor regulation thereto), as it may be amended from time to
time.
"Regulation S Global Note" means a permanent global senior note
that contains the paragraphs referred to in footnote 1 and the additional
schedule referred to in footnote 3 to the form of the Note attached hereto as
Exhibit A, and that is deposited with the Note Custodian and registered in the
name of the Depository or its nominee, representing the Initial Notes sold in
reliance on Regulation S.
"Related Business" means the steel fabrication, erection,
engineering and detailing business and activities incidental thereto and any
business reasonably complementary, related or ancillary thereto.
"Replacement Asset" means a Property or asset that, as determined
by the Board of Directors of the Company as evidenced by a Board Resolution, is
used or is useful in a Related Business.
"Responsible Officer," when used with respect to the Trustee,
means any officer of the Trustee with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Investment" means any Investment in any Person,
including an Unrestricted Subsidiary or the designation of a Subsidiary as an
Unrestricted Subsidiary, other than a Permitted Investment.
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<PAGE> 27
"Restricted Payment" means to (i) declare or pay any dividend on,
or make any distribution in respect of, or purchase, redeem, retire or otherwise
acquire for value, any Capital Stock of the Company or any Affiliate of the
Company, or warrants, rights or options to acquire such Capital Stock, other
than (x) dividends payable solely in the Capital Stock (other than Redeemable
Stock) of the Company or such Affiliate, as the case may be, or in warrants,
rights or options to acquire such Capital Stock and (y) dividends or
distributions by a Subsidiary to the Company or to a Wholly Owned Subsidiary;
(ii) make any principal payment on, or redeem, repurchase, defease (including an
in-substance or legal defeasance) or otherwise acquire or retire for value
(including pursuant to mandatory repurchase covenants), prior to any scheduled
principal payment, scheduled sinking fund payment or other stated maturity,
Indebtedness of the Company or any Subsidiary which is subordinated (whether
pursuant to its terms or by operation of law) in right of payment to the Notes
or the Guarantees, as applicable; (iii) make any Restricted Investment in any
Person; (iv) designate (other than pursuant to clause (xi) of the definition of
Permitted Investments) a Subsidiary as an Unrestricted Subsidiary, provided that
such a designation of a Subsidiary of the Company as an Unrestricted Subsidiary
shall be deemed to include the designation of all of the subsidiaries of such
Subsidiary that were Subsidiaries and (v) forgive any Indebtedness of an
Affiliate of the Company to the Company or a Restricted Subsidiary. For purposes
of determining the amount expended for Restricted Payments, cash distributed or
invested shall be valued at the face amount thereof and Property other than cash
shall be valued at its Fair Market Value, except that in determining the amount
of any Restricted Payment made under clause (iv) above, the amount of such
Restricted Payment shall be equal to the greater of (i) the book value or (ii)
the Fair Market Value of the Company's direct and indirect proportionate
interest in such Subsidiary on such date or the date of the acquisition by the
Company.
"Rule 144A" means Rule 144A under the Securities Act (including
any successor regulation thereto), as it may be amended from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc., or if Standard & Poor's Ratings Group shall cease rating the
specified debt securities and such ratings business with respect thereto shall
have been transferred to a successor Person, such successor Person.
"Sale and Lease-Back Transaction" means, with respect to any
Person, any direct or indirect arrangement pursuant to which Property is sold or
transferred by such Person or a subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its subsidiaries.
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<PAGE> 28
"Securities Act" means the U.S. Securities Act of 1933, as
amended.
"Senior Debt" means any Indebtedness incurred by the Company or a
Guarantor, unless the instrument under which such Indebtedness is incurred
expressly provides that it is subordinated in right of payment to the Notes or
such Guarantor's Guarantee, as applicable, provided that Senior Debt will not
include (a) any liability for federal, state, local or other taxes owed or
owing, (b) any Indebtedness owing to any Subsidiaries of the Company, (c) any
trade payables, or (d) any Indebtedness that is incurred in violation of this
Indenture.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Guarantor or any other
Subsidiary that is a "significant subsidiary" as defined in Rule 1-02(w) of
Regulation S-X under the Securities Act and the Exchange Act.
"Special Interest" means all "special interest" owing pursuant to
the Registration Rights Agreement.
"Special Record Date" means a date fixed by the Trustee pursuant
to Section 2.12 hereof for the payment of Defaulted Interest.
"Stated Maturity" when used with respect to a Note or any
installment of interest thereon, means the date specified in such Note as the
fixed date on which the principal of such Note or such installment of interest
is due and payable.
"Subordinated Indebtedness" means any Indebtedness of the Company
or any Guarantor that is subordinated in right of payment to the Notes or the
Guarantees, as the case may be, and does not mature prior to one year following
the Stated Maturity of the Notes.
"Subsidiary" means a subsidiary of the Company other than an
Unrestricted Subsidiary.
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<PAGE> 29
"Subsidiary" means, with respect to any Person, (i) any
corporation more than 50% of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person, or by one or more other subsidiaries of
such Person, or by such Person and one or more other subsidiaries of such
Person, (ii) any general partnership, joint venture or similar entity, more than
50% of the outstanding partnership or similar interest of which is owned,
directly or indirectly, by such Person, or by one or more other subsidiaries of
such Person, or by such Person and one or more other subsidiaries of such Person
and (iii) any limited partnership of which such Person or any subsidiary of such
Person is a general partner.
"Transfer Restricted Notes" means Notes that bear or are required
to bear the Private Placement Legend.
"Transaction Date" has the meaning specified within the
definition of Consolidated Interest Coverage Ratio.
"Trust Indenture Act" or "TIA" means the U.S. Trust Indenture Act
of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date on which this
Indenture is qualified under the Trust Indenture Act except as required by
Section 9.3 hereof, provided that if the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" or "TIA" means, if so required by such
amendment, the Trust Indenture Act of 1939, as so amended.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"U.S. Global Note" means a permanent Global Note that contains
the paragraphs referred to in footnote 1 and the additional schedule referred to
in footnote 3 to the form of the Note attached hereto as Exhibit A, and that is
deposited with the Note Custodian and registered in the name of the Depository
or its nominee, representing Notes sold in reliance on Rule 144A or in reliance
on another exemption from the registration requirements of the Securities Act.
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<PAGE> 30
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged; (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) above, are not callable or redeemable at the option of the
issuers thereof; or (iii) depository receipts issued by a bank or trust company
as custodian with respect to any such U.S. Government Obligations or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation evidenced by such depository receipt.
"U.S. Person" means (i) any individual resident in the United
States, (ii) any partnership or corporation organized or incorporated under the
laws of the United States, (iii) any estate of which an executor or
administrator is a U.S. Person (other than an estate governed by foreign law and
of which at least one executor or administrator is a non-U.S. Person who has
sole or shared investment discretion with respects to its assets), (iv) any
trust of which any trustee is a U.S. Person (other than a trust of which at
least one trustee is an non-U.S. Person who has sole or shared investment
discretion with respect to its assets and no beneficiary of the trust (and no
settler, if the trust is revocable) is a U.S. Person), (v) any agency or branch
of a foreign entity located in the United States, (vi) any non-discretionary or
similar account (other than an estate or trust) held by a dealer or other
fiduciary for the benefit or account of a U.S. person, (vii) any discretionary
or similar account (other than an estate or trust) held by a dealer or other
fiduciary organized, incorporated or (if an individual) resident in the United
States (other than such an account held for the benefit or account of a non-U.S.
Person), (viii) any partnership or corporation organized or incorporated under
the laws of a foreign jurisdiction and formed by a U.S. Person principally for
the purpose of investing in securities not registered under the Securities Act
(unless it is organized or incorporated and owned, by "accredited investors"
within the meaning of Rule 501(a) under the Securities Act who are not natural
persons, estates or trusts); provided, however, that the term "U.S. Person"
shall not include (A) a branch or agency of a U.S. Person that is located and
operating outside the United States for valid business purposes as a locally
regulated branch or agency engaged in the banking or insurance business, (B) any
employee benefit plan established and administered in accordance with the law,
customary practices and documentation of a foreign country and (C) the
international organizations set forth in Section 902(o)(7) of Regulation S and
any other similar international organizations, and their agencies, affiliates
and pension plans.
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<PAGE> 31
"Unrestricted Subsidiary" means any subsidiary of the Company
that the Company has classified as an Unrestricted Subsidiary, and that has not
been reclassified as a Subsidiary, pursuant to the terms herein.
"Voting Stock" means with respect to any Person, securities of
any class or classes of Capital Stock in such Person entitling the holder
thereof (whether at all times or at the times that such class of Capital Stock
has voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable body of such Person.
"Wholly Owned Subsidiary" means any Subsidiary to the extent (i)
all of the Capital Stock or other ownership interests in such Subsidiary, other
than any directors' qualifying shares mandated by applicable law, is owned
directly or indirectly by the Company or (ii) such Subsidiary is organized in a
foreign jurisdiction and is required by the applicable laws and regulations of
such foreign jurisdiction to be partially owned by the government of such
foreign jurisdiction or individual or corporate citizens of such foreign
jurisdiction in order for such Subsidiary to transact business in such foreign
jurisdiction, provided that the Company, directly or indirectly, owns the
remaining Capital Stock or ownership interest in such Subsidiary and, by
contract or otherwise, controls the management and business of such Subsidiary
and derives the economic benefits of ownership of such Subsidiary to
substantially the same extent as if such Subsidiary were a Wholly Owned
Subsidiary.
SECTION 1.2 Other Definitions.
<TABLE>
<CAPTION>
Defined
Term in Section
---- ----------
<S> <C> <C>
"Act" 11.6
"Asset Sale Offer" 4.15
"Asset Sale Offer Amount" 4.15
"Asset Sale Offer Period" 4.15
"Asset Sale Offer Purchase Price" 4.15
"Asset Sale Purchase Date" 4.9
"Change of Control Offer" 4.9
"Change of Control Offer Period" 4.9
"Change of Control Payment Date" 4.9
"Change of Control Purchase Price" 4.9
"Covenant Defeasance" 9.3
"DTC" 2.3
"Defaulted Interest" 2.12
"Defeasance" 9.2
"Event of Default" 6.1
"Excess Proceeds" 4.15
"40-day restricted period" 2.1
"Guaranteed Indebtedness" 4.8; 12.8
</TABLE>
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<PAGE> 32
<TABLE>
<CAPTION>
<S> <C> <C>
"Interest Payment Date" 2.12
"Paying Agent" 2.3
"Payment Default" 6.1
"Private Placement Legend" 2.6
"Process Agent" 11.10
"Registrar" 2.3
"Required Filing Dates" 4.6
"Securities Register" 2.3
"Surviving Entity" 5.1
</TABLE>
SECTION 1.3 Incorporation By Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust
Indenture Act, the provision is incorporated by reference in and made a part of
this Indenture.
The following Trust Indenture Act terms used in this
Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee;
"obligor" on the Notes means the Company or any other
obligor on the Notes.
All other terms used in this Indenture that are defined by
the Trust Indenture Act, defined by the Trust Indenture Act reference to another
statute or defined by Commission rule under the Trust Indenture Act have the
meanings so assigned to them.
SECTION 1.4 Rules of Construction.
Unless the context otherwise requires:
(1) the words "herein," "hereof" and "hereunder," and
other words of similar import, refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
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<PAGE> 33
(2) a term has the meaning assigned to it;
(3) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(4) "or" is not exclusive;
(5) words in the singular include the plural, and in the
plural include the singular;
(6) provisions apply to successive events and
transactions;
(7) references to sections of or rules under the
Securities Act shall be deemed to include substitute, replacement of successor
sections or rules adopted by the Commission from time to time;
(8) the principal amount of any non-interest bearing or
other discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared in
accordance with generally accepted accounting principles;
(9) when used with respect to the Notes, the term
"principal amount" shall mean the principal amount thereof at Maturity;
(10) unless otherwise expressly provided herein, the
principal amount of any preferred stock shall be greater of (i) the maximum
liquidation value of such preferred stock or (ii) the maximum mandatory
redemption or mandatory repurchase price with respect to such preferred stock;
and
(11) all references to amounts of money or $ mean U.S.
Dollars.
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<PAGE> 34
ARTICLE 2.
THE NOTES
SECTION 2.1 Form and Dating.
(a) General. The Notes, together with the Trustee's
certificate of authentication and the Guarantors' notation of Guarantees, shall
be substantially in the form set forth in Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof. The Initial Notes
and the Exchange Notes will be the same except that the Private Placement Legend
and paragraph 18 will be omitted from the Exchange Notes.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company, the Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
(b) Initial Notes. Initial Notes, with the notations of the
Guarantees endorsed thereon, shall be issued in the form of one or more
permanent Global Notes in definitive fully registered form without coupons.
Notes offered and sold to QIBs in reliance on Rule 144A, shall be issued
initially in the form of the U.S. Global Notes, which shall be deposited on
behalf of the purchasers of the Notes represented thereby with the Note
Custodian, and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the U.S. Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depository or its nominee as hereinafter
provided. Initial Notes offered and sold in reliance on Regulation S shall be
issued initially in the form of the Regulation S Global Note, which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Note Custodian, and registered in the name of the Depository or the nominee of
the Depository for the accounts of designated agents holding on behalf of
Euroclear or Cedel, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. During the "40- day restricted period" (as
defined in Regulation S) beneficial interests in the Regulation S Global Note
shall be held only through Euroclear or Cedel, and, pursuant to the Depository's
procedures, Indirect Participants that hold a beneficial interest in the
Regulation S Global Note shall not be able to transfer such interest to a person
that takes delivery thereof in the form of an interest in the U.S. Global Notes.
Following the termination of the 40-day restricted period, beneficial interests
in the Regulation S Global Notes shall be exchanged for beneficial interests in
U.S. Global Notes and beneficial interests in the U.S. Global Notes shall be
exchanged for beneficial interests in the Regulation S Global Notes, pursuant to
the Applicable Procedures. The aggregate principal amount of the Regulation S
Global Notes may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depository or its nominee, as the case may
be, in connection with transfers of interest as hereinafter provided.
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<PAGE> 35
Each Global Note shall represent such of the outstanding Notes
as shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed on Schedule A
thereto and that the aggregate amount of outstanding Notes represented thereby
may from time to time be reduced or increased, as appropriate, to reflect
exchanges, redemptions and transfers of interests. Any endorsement of Schedule A
of a Global Note to reflect the amount of any increase or decrease in the amount
of outstanding Notes represented thereby shall be made by the Trustee or the
Note Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.6 hereof.
The provisions of the "Operating Procedures of the Euroclear
System" and "Terms and Conditions Governing Use of Euroclear" and the
"Management Regulations" and "Instructions to Participants" of Cedel shall be
applicable to interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Cedel. The Trustee shall have no obligation to
notify Holders of any such procedures or to monitor or enforce compliance with
the same.
Except as set forth in Section 2.6 hereof, the Global Notes
may be transferred, in whole and not in part, only to another nominee of the
Depository or to a successor of the Depository or its nominee.
(c) Book-Entry Provisions. This Section 2.1(c) shall apply
only to Global Notes deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(c), authenticate and deliver the Global Notes that (i)
shall be registered in the name of the Depository or the nominee of the
Depository and (ii) shall be delivered by the Trustee to the Depository or
pursuant to the Depository's instructions or held by the Note Custodian.
Participants shall have no rights either under this Indenture
with respect to any Global Note held on their behalf by the Depository or by the
Senior Note Custodian as custodian for the Depository or under such Global Note,
and the Depository may be treated by the Company, the Trustee and any agent of
the Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Participants, the
operation of customary practices of such Depository governing the exercise of
the rights of an owner of a beneficial interest in any Global Note.
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<PAGE> 36
(d) Certificated Notes. Notes issued in certificated form
shall be substantially in the form of Exhibit A attached hereto (but without
including the text referred to in footnotes 1, 2 and 3 thereto) and shall be
printed, typewritten, lithographed or engraved or produced by any combination of
these methods or may be produced by any other method permitted by the rules of
any securities exchange on which the Notes may be listed, as evidenced by the
execution of such Notes.
(e) Provisions Applicable to Forms of Notes. The Notes may
also have such additional provisions, omissions, variations or substitutions as
are not inconsistent with the provisions of this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with this Indenture,
any applicable law or with any rules made pursuant thereto or with the rules of
any securities exchange or governmental agency or as may be determined
consistently herewith by the Officers of the Company executing such Notes, as
conclusively evidenced by their execution of such Notes. All Notes will be
otherwise substantially identical except as provided herein.
Subject to the provisions of this Article 2, a Holder of a
Global Note may grant proxies and otherwise authorize any Person to take any
action that a Holder is entitled to take under this Indenture or the Notes.
SECTION 2.2 Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds
that office at the time a Senior Note is authenticated, the Note shall
nevertheless be valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially as
set forth in Exhibit A hereto.
The Trustee shall authenticate (i) Initial Notes for original
issue in an aggregate principal amount not to exceed $100,000,000 and (ii)
Exchange Notes for issue only in the Exchange Offer pursuant to the Exchange
Offer Registration Statement for a like principal amount of Initial Notes
exchanged in such Exchange Offer, in each case upon the receipt of a Company
Order directing the Trustee to authenticate such Notes and certifying that all
conditions precedent to the issuance of the relevant Notes contained herein have
been complied with. The aggregate principal amount of Notes outstanding at any
time may not exceed $100,000,000, except as provided in Section 2.8 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to
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<PAGE> 37
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
SECTION 2.3 Registrar and Paying Agent.
The Company shall maintain (i) an office or agency where Notes
may be presented for registration of transfer or for exchange ("Registrar"),
(ii) an office or agency where Notes may be presented for payment ("Paying
Agent"), and (iii) and an office or agency where notices or demands to or upon
the Company and the Guarantors in respect of the Notes and this Indenture may be
served. The Registrar shall keep a register of the Notes and of their transfer
and exchange (the "Securities Register"). The Company may appoint one or more
co-registrars and one or more additional paying agents except as otherwise
provided in this Indenture. The term "Registrar" includes any co-registrar and
the term "Paying Agent" includes any additional paying agent. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
shall notify the Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar or Paying Agent, the Trustee shall act as such. The Company
or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee (at the Corporate
Trust Office of the Trustee) to act as the Registrar and Paying Agent and to act
as Note Custodian with respect to the Global Notes.
SECTION 2.4 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of, premium, if any, on, interest on, and Special Interest,
if any, on, the Notes, and shall notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
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<PAGE> 38
SECTION 2.5 Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company shall furnish to the Trustee at
least seven Business Days before each Interest Payment Date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of the
Holders of Notes, and the Company shall otherwise comply with TIA Section
312(a).
SECTION 2.6 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. The transfer and
exchange of beneficial interests in Global Notes shall be effected through the
Depository, in accordance with this Indenture and the Applicable Procedures,
which shall include restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act. Beneficial interests in a
Global Note may be transferred to Persons who take delivery thereof in the form
of a beneficial interest in the same Global Note in accordance with the transfer
restrictions set forth in the legend in subsection (e) of this Section 2.6.
Transfers of beneficial interests in the Global Notes to Persons required to
take delivery thereof in the form of an interest in another Global Note shall be
permitted as follows:
(i) U.S. Global Note to Regulation S Global Note. Prior
to the expiration of the 40-day restricted period, an
owner of a beneficial interest in a U.S. Global Note
deposited with the Depository (or the Note Custodian)
will not be permitted to transfer its interest to a
Person who wishes to take delivery thereof in the
form of an interest in the Regulation S Global Note.
If, at any time after the expiration of the 40-day
restricted period, an owner of a beneficial interest
in a U.S. Global Note deposited with the Depository
(or the Senior Note Custodian) wishes to transfer its
beneficial interest in such U.S. Global Note to a
Person who is required or permitted to take delivery
thereof in the form of an interest in a Regulation S
Global Note, such owner shall, subject to the
Applicable Procedures, exchange or cause the exchange
of such interest for an equivalent beneficial
interest in a Regulation S Global Note as provided in
this Section 2.6(a)(i). Upon receipt by the Trustee
of (1) instructions given in accordance with the
Applicable Procedures from a Participant directing
the Trustee to credit or cause to be credited a
beneficial interest in the Regulation S Global Note
in an amount equal to the beneficial interest in the
U.S. Global Note to be exchanged, (2) a written order
given in accordance with the Applicable Procedures
containing information regarding the Participant
account of the Depository and the Euroclear or Cedel
account to be credited with such increase, and (3) a
certificate in the form of Exhibit B-1 hereto given
by the owner of such beneficial interest stating that
the transfer of such interest has been made in
compliance with the transfer restrictions applicable
to the Global Notes and pursuant to and in accordance
with Rule 903 or Rule 904 of Regulation S, then the
Trustee, as Registrar, shall instruct the Depository
to reduce or cause to be reduced the aggregate
principal amount at Maturity
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<PAGE> 39
of the applicable U.S. Global Note and to increase or
cause to be increased the aggregate principal amount
at Maturity of the applicable Regulation S Global
Note by the principal amount at Maturity of the
beneficial interest in the U.S. Global Note to be
exchanged or transferred, to credit or cause to be
credited to the account of the Person specified in
such instructions, a beneficial interest in the
Regulation S Global Note equal to the reduction in
the aggregate principal amount at Maturity of the
U.S. Global Note, and to debit, or cause to be
debited, from the account of the Person making such
exchange or transfer the beneficial interest in the
U.S. Global Note that is being exchanged or
transferred.
(ii) Regulation S Global Note to U.S. Global Note. Prior
to the expiration of the 40-day restricted period, an
owner of a beneficial interest in a Regulation S
Global Note deposited with the Depository (or the
Note Custodian) will not be permitted to transfer its
interest to a Person who wishes to take delivery
thereof in the form of an interest in a U.S. Global
Note. If, at any time after the expiration of the
40-day restricted period, an owner of a beneficial
interest in a Regulation S Global Note deposited with
the Depository or with the Senior Note Custodian
wishes to transfer its beneficial interest in such
Regulation S Global Note to a Person who is required
or permitted to take delivery thereof in the form of
an interest in a U.S. Global Note, such owner shall,
subject to the Applicable Procedures, exchange or
cause the exchange of such interest for an equivalent
beneficial interest in a U.S. Global Note as provided
in this Section 2.6(a)(ii). Upon receipt by the
Trustee of (1) instructions from Euroclear or Cedel,
if applicable, and the Depository, directing the
Trustee, as Registrar, to credit or cause to be
credited a beneficial interest in the U.S. Global
Note equal to the beneficial interest in the
Regulation S Global Note to be exchanged, such
instructions to contain information regarding the
Participant account with the Depository to be
credited with such increase, (2) a written order
given in accordance with the Applicable Procedures
containing information regarding the Participant
account of the Depository and (3) a certificate in
the form of Exhibit B-2 attached hereto given by the
owner of such beneficial interest stating (A) if the
transfer is pursuant to Rule 144A, that the Person
transferring such interest in a Regulation S Global
Note reasonably believes that the Person acquiring
such interest in a U.S. Global Note is a QIB and is
obtaining such beneficial interest in a transaction
meeting the requirements of Rule 144A and any
applicable blue sky or securities laws of any state
of the United States, (B) that the transfer complies
with the requirements of Rule 144 under the
Securities Act, (C) if the transfer is to an
Institutional Accredited Investor that such transfer
is in compliance with the Securities Act and that a
certificate in the form of Exhibit C attached hereto
is attached thereto, together with, if the Company
should so request, an Opinion of Counsel acceptable
to the Company that such transfer is in compliance
with the Securities Act or (D) if the transfer is
pursuant to any other exemption from the registration
requirements of the Securities Act, that the transfer
of such interest has been made in
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<PAGE> 40
compliance with the transfer restrictions applicable
to the Global Notes and pursuant to and in accordance
with the requirements of the exemption claimed, such
statement to be supported by an Opinion of Counsel
from the transferee or the transferor in form
reasonably acceptable to the Company and to the
Registrar and, in each case, in accordance with any
applicable securities laws of any state of the United
States or any other applicable jurisdiction, then the
Trustee, as Registrar, shall instruct the Depository
to reduce or cause to be reduced the aggregate
principal amount at maturity of such Regulation S
Global Note and to increase or cause to be increased
the aggregate principal amount at Maturity of the
applicable U.S. Global Note by the principal amount
at Maturity of the beneficial interest in the
Regulation S Global Note to be exchanged or
transferred, and the Trustee, as Registrar, shall
instruct the Depository, concurrently with such
redeption, to credit or cause to be credited to the
account of the Person specified in such instructions
a beneficial interest in the applicable U.S. Global
Note equal to the reduction in the aggregate
principal amount at Maturity of such Regulation S
Global Note and to debit or cause to be debited from
the account of the Person making such transfer the
beneficial interest in the Regulation S Global Note
that is being exchanged or transferred.
(iii) U.S. Global Notes to Institutional Accredited
Investor. If, at any time, an owner of a beneficial
interest in a U.S. Global Note deposited with the
Depository (or the Senior Note Custodian) wishes to
transfer its beneficial interest in such U.S. Global
Note to a Person who is an Institutional Accredited
Investor, such owner shall, subject to the Applicable
Procedures and the other provisions of this Section
2.6, exchange or cause the exchange of such interest
for an equivalent beneficial interest in a U.S.
Global Note as provided in this Section 2.6(a)(iii).
Upon receipt by the Trustee of (1) instructions given
in accordance with the Applicable Procedures from a
Participant directing the Trustee to credit or cause
to be credited a beneficial interest in the U.S.
Global Note in an amount equal to the beneficial
interest in the U.S. Global Note to be exchanged, (2)
a written order given in accordance with the
Applicable Procedures containing information
regarding the Participant account of the Depository
to be credited with such increase, and (3) a
certificate in the form of Exhibit C hereto given by
the proposed transferee, and, if the Company should
so request, an Opinion of Counsel provided by the
transferor or the transferee (a copy of which the
Transferor attaches to such certificate), in form
reasonably acceptable to the Company, to the effect
that such transfer is in compliance with the
Securities Act, then the Trustee, as Registrar, shall
instruct the Depository to credit or cause to be
credited to the account of the Person specified in
such instructions, a beneficial interest in the U.S.
Global Note equal to the aggregate principal amount
being transferred, and to debit, or cause to be
debited, from the account of the Person making such
exchange or transfer the beneficial interest in the
U.S. Global Note that is being exchanged or
transferred.
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<PAGE> 41
(b) Transfer and Exchange of Certificated Notes. When
Certificated Notes are presented by a Holder to the Registrar with a request to
register the transfer of the Certificated Notes or to exchange such Certificated
Notes for an equal principal amount of Certificated Notes of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested only if the Certificated Notes are presented or surrendered for
registration of transfer or exchange, are endorsed and contain a signature
guarantee or are accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by such Holder or by his attorney
and contains a signature guarantee, duly authorized in writing and the Registrar
received the following documentation (all of which may be submitted by
facsimile):
in the case of Certificated Notes that are Transfer
Restricted Notes, such request shall be accompanied
by the following additional information and
documents, as applicable:
(A) if such Transfer Restricted Note is being
delivered to the Registrar by a Holder for
registration in the name of such Holder,
without transfer, or such Transfer
Restricted Note is being transferred to the
Company, a certification to that effect from
such Holder (in substantially the form of
Exhibit B-3 hereto); or
(B) if such Transfer Restricted Note is being
transferred to a QIB in accordance with Rule
144A under the Securities Act or pursuant to
an exemption from registration in accordance
with Rule 144 under the Securities Act or in
an offshore transaction pursuant to and in
compliance with Rule 904 under the
Securities Act or pursuant to an effective
registration statement under the Securities
Act, a certification to that effect from
such Holder (in substantially the form of
Exhibit B-3 hereto); or
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<PAGE> 42
(C) if such Transfer Restricted Note is being
transferred in reliance on any other
exemption from the registration requirements
of the Securities Act, a certification to
that effect from such Holder (in
substantially the form of Exhibit B-3
hereto) and an Opinion of Counsel from such
Holder or the transferee reasonably
acceptable to the Company and to the
Registrar to the effect that such transfer
is in compliance with the Securities Act.
(c) Transfer of a Beneficial Interests in Global Notes
for Certificated Notes.
(i) The Global Notes that are Transfer Restricted Notes
or the Exchange Global Notes, as the case may be,
shall be exchanged by the Company for one or more
Certificated Notes representing Initial Notes or
Exchange Notes, as the case may be, if (x) the
Depository (i) has notified the Company that it is
unwilling or unable to continue as, or ceases to be,
a "Clearing Agency" registered under Section 17A of
the Exchange Act and (ii) a successor to the
Depository registered as a "Clearing Agency" under
Section 17A of the Exchange Act is not able to be
appointed by the Company within 90 calendar days or
(y) the Depository is at any time unwilling or unable
to continue as Depository and a successor to the
Depository is not able to be appointed by the Company
within 90 calendar days or (iii) the Company, at its
option, delivers a notice in the form of an Officers'
Certificate that it elects to cause the issuance of
Certificated Notes. If an Event of Default occurs and
is continuing, the Company shall, at the request of
the Holder thereof, exchange all or part of a Global
Note that is a Transfer Restricted Note or an
Exchange Global Note, as the case may be, for one or
more Certificated Notes representing Initial Notes or
Exchange Notes, as the case may be; provided that the
principal amount of each of such Certificated Notes,
and such Global Note, after such exchange, shall be
$1,000 or an integral multiple thereof. Whenever a
Global Note is exchanged as a whole for one or more
Certificated Notes, it shall be surrendered by the
Holder thereof to the Trustee for cancellation.
Whenever a Global Note is exchanged in part for one
or more Certificated Notes, it shall be surrendered
by the Holder thereof to the Trustee and the Trustee
shall make the appropriate notations to Schedule A
thereof pursuant to Section 2.1 hereof. All
Certificated Notes or Exchange Notes, as the case may
be, issued in exchange for a Global Note or any
portion thereof shall be registered in such names,
and delivered, as the Depository shall instruct the
Trustee. Any Certificated Notes issued pursuant to
this Section 2.6(c)(i) shall include the Private
Placement Legend, except as otherwise provided for by
this Section 2.6. Interests in a Global Note may not
be exchanged for Certificated Notes other than as
provided in this Section 2.6. If a beneficial
interest in a Transfer Restricted Note is being
transferred, the following additional documents and
information must be submitted (including by
facsimile):
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(A) if such beneficial interest is being
transferred to the Person designated by the
Depository as being the beneficial owner, a
certification to that effect from such
Person (in substantially the form of Exhibit
B-4 hereto);
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule
144A under the Securities Act or pursuant to
an exemption from registration in accordance
with Rule 144 under the Securities Act or in
an offshore transaction pursuant to and in
compliance with Rule 904 under the
Securities Act or pursuant to an effective
registration statement under the Securities
Act, a certification to that effect from the
transferor (in substantially the form of
Exhibit B-4 hereto);
(C) if such beneficial interest is being
transferred in reliance on any other
exemption from the registration requirements
of the Securities Act, a certification to
that effect from the transferor (in
substantially the form of Exhibit B-4
hereto) and an Opinion of Counsel from the
transferee or the transferor reasonably
acceptable to the Company and to the
Registrar to the effect that such transfer
is in compliance with the Securities Act, in
which case the Trustee or the Note
Custodian, at the direction of the Trustee,
shall, in accordance with the standing
instructions and procedures existing between
the Depository and the Note Custodian, cause
the aggregate principal amount of U.S.
Global Notes or Regulation S Global Notes,
as applicable, to be reduced accordingly
and, following such reduction, the Company
shall execute and, the Trustee shall
authenticate and deliver to the transferee a
Certificated Note in the appropriate
principal amount.
(ii) Certificated Notes issued in exchange for a
beneficial interest in a U.S. Global Note or
Regulation S Global Note, as applicable, pursuant to
this Section 2.6(c) shall be registered in such names
and in such authorized denominations as the
Depository, pursuant to instructions from its
Participants or Indirect Participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver
such Certificated Notes to the Persons in whose names
such Notes are so registered. Following any such
issuance of Certificated Notes, the Trustee, as
Registrar, shall instruct the Depository to reduce or
cause to be reduced the aggregate principal amount at
maturity of the applicable Global Note to reflect the
transfer.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (e) of this Section 2.6), a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository. Any Holder of a beneficial interest in a
Global Note shall, by acceptance
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of such Global Note, agree that transfers of beneficial interests in such Global
Note may be effected only through a book entry system maintained by the Holder
of such Global Note (or its agent), and that ownership of a beneficial interest
in the Notes represented hereby shall be required to be reflected in book entry
form. Interests of beneficial owners in a Global Note may be transferred in
accordance with the rules and procedures of the Depository (or its successors).
(e) Legends.
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Note certificate evidencing
Global Notes and Certificated Notes (and all Notes
issued in exchange therefor or substitution thereof)
shall bear a legend (the "Private Placement Legend")
in substantially the following form:
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS
SET FORTH IN THE SECOND SENTENCE HEREOF. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) (A "QIB"), OR (B) IT
IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT, OR (2) AGREES THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES
ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (E) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR
AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
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STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902
OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING.
(ii) Upon any sale or transfer of a Transfer Restricted
Note (including any Transfer Restricted Note
represented by a Global Note) pursuant to Rule 144
under the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Note
that is a Certificated Note, the Registrar
shall permit the Holder thereof to exchange
such Transfer Restricted Note for a
Certificated Note that does not bear the
legend set forth in (i) above and rescind
any restriction on the transfer of such
Transfer Restricted Note upon receipt of a
certification from the transferring Holder
substantially in the form of Exhibit B-4
hereto; and
(B) in the case of any Transfer Restricted Note
represented by a Global Note, such Transfer
Restricted Note shall not be required to
bear the legend set forth in (i) above, but
shall continue to be subject to the
provisions of Section 2.6(a) and (b) hereof;
provided, however, that with respect to any
request for an exchange of a Transfer
Restricted Note that is represented by a
Global Note for a Certificated Note that
does not bear the legend set forth in (i)
above, which request is made in reliance
upon Rule 144, the Holder thereof shall
certify in writing to the Registrar that
such request is being made pursuant to Rule
144 (such certification to be substantially
in the form of Exhibit B-4 hereto).
(iii) Upon any sale or transfer of a Transfer Restricted
Note (including any Transfer Restricted Note
represented by a Global Note) in reliance on any
exemption from the registration requirements of the
Securities Act (other than exemptions pursuant to
Rule 144A or Rule 144 under the Securities Act) in
which the Holder or the transferee provides an
Opinion of Counsel to the Company and the Registrar
in form and substance reasonably acceptable to the
Company and the Registrar (which Opinion of Counsel
shall also state that the transfer restrictions
contained in the legend are no longer applicable):
(A) in the case of any Transfer Restricted Note
that is a Certificated Note, the Registrar
shall permit the Holder thereof to exchange
such Transfer Restricted Note for a
Certificated Note that does not bear the
legend set forth in (i) above and rescind
any restriction on the transfer of such
Transfer Restricted Note; and
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(B) in the case of any Transfer Restricted Note
represented by a Global Note, such Transfer
Restricted Note shall not be required to
bear the legend set forth in (i) above, but
shall continue to be subject to the
provisions of Section 2.6(a) and (b) hereof.
(iv) By its acceptance of any Initial Note represented by
a certificate bearing the Private Placement Legend,
each Holder of, and beneficial owner of an interest
in, such Initial Note acknowledges the restrictions
on transfer of such Initial Note set forth in the
Private Placement Legend and under the heading
"Notice to Investors" in the Offering Memorandum and
agrees that it will transfer such Initial Note only
in accordance with the Private Placement Legend and
the restrictions set forth under the heading "Notice
to Investors" in the Offering Memorandum.
(v) Notwithstanding the foregoing, upon the occurrence of
the Exchange Offer in accordance with the
Registration Rights Agreement, the Company shall
issue and, upon receipt of an authentication order in
accordance with Section 2.2 hereof, the Trustee shall
authenticate (i) one or more unrestricted Global
Notes in aggregate principal amount equal to the
principal amount of the restricted beneficial
interests validly tendered and not properly withdrawn
by Persons that certify in the letter of transmittal
delivered in the Exchange Offer that they are not (x)
broker-dealers, (y) Persons participating in the
distribution of the Exchange Notes or (z) Persons who
are affiliates (as defined in Rule 144 under the
Securities Act) of the Company and accepted for
exchange in the Exchange Offer and (ii) Certificated
Notes that do not bear the Private Placement Legend
in an aggregate principal amount equal to the
principal amount of the Certificated Notes that are
Transfer Restricted Notes accepted for exchange in
the Exchange Offer. Concurrently with the issuance of
such Notes, the Trustee shall cause the aggregate
principal amount of the applicable Global Notes to be
reduced accordingly and the Company shall execute and
the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Certificated
Notes so accepted Certificated Notes in the
appropriate principal amount.
(f) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in Global Notes have been exchanged for
Certificated Notes, redeemed, repurchased or cancelled, all Global Notes shall
be returned to or retained and cancelled by the Trustee in accordance with
Section 2.11 hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Note is exchanged for Certificated Notes, redeemed,
repurchased or cancelled, the principal amount of Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be made on
such Global Note, by the Trustee or the Note Custodian, at the direction of the
Trustee, to reflect such reduction.
(g) General Provisions Relating to Transfers and Exchanges.
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(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall
authenticate Global Notes and Certificated Notes at
the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any
stamp or transfer tax or similar governmental charge
payable in connection therewith (other than any such
stamp or transfer taxes or similar governmental
charge payable upon exchange or transfer pursuant to
Sections 2.10, 3.6, 4.9, 4.16 and 10.6 hereto).
(iii) All Global Notes and Certificated Notes issued upon
any registration of transfer or exchange of Global
Notes or Certificated Notes shall be the valid
obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this
Indenture, as the Global Notes or Certificated Notes
surrendered upon such registration of transfer or
exchange.
(iv) The Registrar shall not be required: (A) to issue, to
register the transfer of or to exchange Notes during
a period beginning at the opening of fifteen (15)
Business Days before the day of any selection of
Notes for redemption under Section 3.2 hereof and
ending at the close of business on the day of
selection, (B) to register the transfer of or to
exchange any Note so selected for redemption in whole
or in part, except the unredeemed portion of any Note
being redeemed in part, or (C) to register the
transfer of or to exchange a Note between a Record
Date and the next succeeding Interest Payment Date.
(v) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the
Company may deem and treat the Person in whose name
any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of
principal of and interest on such Notes and for all
other purposes, and neither the Trustee, any Agent
nor the Company shall be affected by notice to the
contrary.
(vi) The Trustee shall authenticate Global Notes and
Certificated Notes in accordance with the provisions
of Section 2.2 hereof.
Notwithstanding anything herein to the contrary, as to any certifications or
certificates delivered to the Trustee or Registrar pursuant to this Section 2.6,
the Trustee's or the Registrar's duties shall be limited to confirming that any
such certifications and certificates delivered to it are in the form of Exhibits
B-1 through B-4 and C attached hereto. The Trustee or Registrar shall not be
responsible for confirming the truth or accuracy of representations made in any
such certifications or certificates.
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SECTION 2.7 Replacement of Notes.
If any mutilated Note is surrendered to the Trustee, or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon the receipt of a Company Order, shall authenticate a replacement Note if
the Trustee's requirements are met. If required by the Trustee or the Company,
an indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, each Guarantor,
the Trustee, any Agent and any authenticating agent from any loss that any of
them may suffer if a Note is replaced. The Company may charge for its expenses
in replacing a Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder. The provisions
of this Section 2.7 are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement of mutilated,
destroyed, lost or stolen Notes.
SECTION 2.8 Outstanding Notes.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section 2.9
hereof, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.1 hereof, it ceases to be outstanding and interest (including Special
Interest, if any) on it ceases to accrue.
If the Paying Agent (other than the Company, a Guarantor, a
Subsidiary or an Affiliate of any thereof) holds, on a Redemption Date or
Maturity, money sufficient to pay Notes payable on that date, then on and after
that date such Notes shall be deemed to be no longer outstanding and shall cease
to accrue interest (including Special Interest, if any).
SECTION 2.9 Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or any Guarantor, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any Guarantor, shall be considered as though not outstanding, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes that a Responsible
Officer knows are so owned shall be so disregarded.
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SECTION 2.10 Temporary Notes.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a Company Order.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company considers appropriate for temporary Notes and
as shall be reasonably acceptable to the Trustee. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall upon the
written request of the Company, return such cancelled Notes to the Company. The
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation.
SECTION 2.12 Payment of Interest; Interest Rights Preserved.
Interest (including Special Interest, if any) on any Note
which is payable, and is punctually paid or duly provided for, on any June 1 or
December 1 (an "Interest Payment Date"), commencing on December 1, 1998, shall
be paid to the Person in whose name such Note is registered at the close of
business on the Record Date for such interest payment, which shall be the May 15
or November 15 (whether or not a Business Day) immediately preceding such
Interest Payment Date.
Any interest on any Note which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Record Date, and, except as hereinafter
provided, such Defaulted Interest and any interest payable on such Defaulted
Interest may be paid by the Company, at its election, as provided in clause (a)
or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest, and any interest payable on such Defaulted Interest, to the Persons in
whose names the Notes are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on the Notes and the date of
the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest (including Special Interest, if any) or shall
make arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as provided in this
clause (a).
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Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 calendar days and not less
than 10 calendar days prior to the date of the proposed payment and not less
than 10 calendar days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be sent, first class mail, postage prepaid, to each Holder at
such Holder's address as it appears in the Securities Register, not less than 10
calendar days prior to such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names the Notes are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest
(including Special Interest, if any), and any interest payable on such Defaulted
Interest, on the Notes in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.12, each
Note delivered under this Indenture upon registration of transfer of, or in
exchange for, or in lieu of, or in substitution for, any other Note, shall carry
the rights to interest (and Special Interest, if any) accrued and unpaid, and to
accrue, which were carried by such other Note.
SECTION 2.13 Computation of Interest.
Interest on the Notes shall be computed on the basis of a
360-day year consisting of twelve 30-day months.
SECTION 2.14 CUSIP Number.
The Company in issuing the Notes may use a "CUSIP" number, and
if it does so, the Trustee shall use the CUSIP number in notices of redemption
or exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in the CUSIP number.
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ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.1 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof and of the Notes, it shall furnish
to the Trustee, at least 30 days (unless a shorter period is acceptable to the
Trustee) but not more than 60 days before a Redemption Date, an Officers'
Certificate setting forth (i) the section of this Indenture pursuant to which
the redemption shall occur, (ii) the Redemption Date, (iii) the principal amount
of Notes to be redeemed and (iv) the Redemption Price.
SECTION 3.2 Selection of Notes to be Redeemed.
If less than all of the Notes are to be redeemed at any time,
selection of the Notes for redemption will be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which the Notes are listed or, if the Notes are not so listed, on a pro rata
basis, by lot or by such method as the Trustee considers fair and appropriate.
In the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the Redemption Date by the Trustee from the outstanding
Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the portion of the principal amount thereof to be redeemed.
Notes and portions of Notes selected shall be in amounts of $1,000 or integral
multiples of $1,000, except that if all of the Notes of a Holder are to be
redeemed, the entire outstanding amount of Notes held by such Holder, even if
not an integral multiple of $1,000, shall be redeemed. Except as provided in the
preceding sentence, provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption.
SECTION 3.3 Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Notes are to be redeemed at its
registered address as it appears in the Securities Register.
The notice shall identify the Notes to be redeemed including
CUSIP number and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption Date
upon surrender of such Note, a new
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Note or Notes in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption (other than a Global
Note) must be surrendered to the Paying Agent to collect the Redemption Price;
(f) that, unless the Company defaults in making such
Redemption Payment, interest (and Special Interest, if any) on Notes (or
portions thereof) called for redemption cease to accrue on and after the
Redemption Date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being redeemed;
and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 30 days prior to the
Redemption Date (unless a shorter time is acceptable to the Trustee), an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
SECTION 3.4 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.3 hereof, Notes called for redemption become irrevocably due and payable on
the Redemption Date at the Redemption Price including interest and Special
Interest, if any, accrued and unpaid on the Redemption Date. Upon surrender to
the Paying Agent, such Notes shall be paid at the Redemption Price stated in
such notice. Failure to give notice or any defect in the notice to any Holder
shall not affect the validity of the notice to any other Holder. A notice of
redemption may not be conditional.
SECTION 3.5 Deposit of Redemption Price.
On or prior to the Redemption Date, the Company shall deposit
with the Trustee or with the Paying Agent immediately available funds sufficient
to pay the Redemption Price of and accrued and unpaid interest, if any, on (and
Special Interest, if any on) all Notes to be redeemed on that date. The Trustee
or the Paying Agent shall promptly return to the Company any money deposited
with the Trustee or the Paying Agent by the Company in excess of the amounts
necessary to pay the Redemption Price of, and accrued interest (including
Special Interest, if any) on, all Notes to be redeemed.
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If the Company complies with the provisions of the preceding
paragraph, on and after the Redemption Date, interest (and Special Interest, if
any) shall cease to accrue on the Notes or the portions of Notes called for
redemption. If a Note is redeemed on or after a Record Date but on or prior to
the related Interest Payment Date, then any accrued and unpaid interest (and
Special Interest, if any) shall be paid to the Person in whose name such Note
was registered at the close of business on such Record Date. If any Note called
for redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest (and
Special Interest, if any) shall be paid on the unpaid principal, from the
Redemption Date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
the Notes and in Section 4.1 hereof.
SECTION 3.6 Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered. The records
of the Registrar and the Depository shall reflect any partial redemption of any
Global Note.
SECTION 3.7 Optional Redemption.
(a) Except as set forth in subsection (b) of this Section 3.7,
the Notes shall not be redeemable at the Company's option prior to June 1, 2003.
On or after such date, the Notes shall be redeemable at the option of the
Company, in whole at any time or in part from time to time, at the following
prices (expressed in percentages of the principal amount thereof) if redeemed
during the twelve-month period beginning June 1 of each of the years indicated
below, in each case together with interest (and Special Interest, if any)
accrued to the Redemption Date (subject to the right of Holders of record on the
relevant Record Date to receive interest (and Special Interest, if any) due on
the relevant Interest Payment Date):
YEAR Percentage
2003............................................. 105.250%
2004............................................. 103.938%
2005............................................. 102.625%
2006 101.313%
2007 and thereafter.............................. 100.000%
(b) Notwithstanding the provisions of Subsection (a) of this
Section 3.7, at any time during the first 36 months after the Issue Date, the
Company may, at its option, redeem up to a maximum of 35% of the original
aggregate principal amount of the Notes with the net cash proceeds of one or
more Public Equity Offerings at a Redemption Price equal to 110.5% of the
principal amount thereof, plus accrued and unpaid interest (and Special
Interest, if any), thereon to the Redemption Date; provided that at least 65% of
the aggregate principal amount of the Notes originally issued shall remain
outstanding immediately after the occurrence of such redemption; and provided,
further, that such redemption shall occur within 90 days of the date of the
closing of such Public Equity Offering.
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(c) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Section 3.1 through 3.6 hereof.
ARTICLE 4.
COVENANTS
SECTION 4.1 Payment of Notes.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest (and Special Interest, if any) on, the Notes on
the dates and in the manner provided in the Notes and in this Indenture.
Principal, premium, if any, and interest (and Special Interest, if any) shall be
considered paid on the date due if the Trustee or the Paying Agent, if other
than the Company or a Subsidiary thereof, holds as of 12:00 noon, New York Time,
on the due date money deposited by the Company in immediately available funds
and designated for and sufficient to pay all principal, premium, if any, and
interest (and Special Interest, if any), then due. The Company shall pay all
Special Interest, if any, in the same manner on the dates and in the amounts set
forth in the Registration Rights Agreement. The Company will promptly notify the
Trustee of a Registration Default (as defined in the Registration Rights
Agreement) under the Registration Rights Agreement and any cure thereof.
The Company shall pay interest (including post-petition
interest in any proceeding under any applicable Federal, state or foreign
bankruptcy law) on Defaulted Interest and Special Interest, if any (without
regard to any applicable grace period) at the same rate to the extent lawful.
SECTION 4.2 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
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The Company hereby designates the Corporate Trust Office of
the Trustee's Affiliate, Harris Trust Company of New York, 88 Pine Street, New
York, New York 10005, as one such office or agency of the Company in accordance
with Section 2.3 hereof.
SECTION 4.3 Corporate Existence.
Subject to the provisions of Article 5 hereof, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect (i) its corporate existence, and the corporate, partnership or
other existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of each
of the Company or any such Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of each of the Company and its Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors of the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries taken as a whole and that the
loss thereof is not adverse in any material respect to the Holders of the Notes.
SECTION 4.4 Maintenance of Properties and Insurance.
(a) The Company shall cause all material Properties owned by
or leased by it or any of its Subsidiaries useful and necessary to the conduct
of its business or the business of any of its Subsidiaries to be maintained and
kept in good condition, repair and working order (reasonable wear and tear
excepted) and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in its judgment may
be necessary, so that the business carried on in connection therewith may be
properly conducted at all times; provided, however, that nothing in this Section
4.4 shall prevent the Company or any of its Subsidiaries from discontinuing the
use, operation or maintenance of any of such Properties, or disposing of any of
them, if such discontinuance or disposal is, in the judgment of the Board of
Directors of the Company or the Subsidiary of the Company so concerned, or of an
officer (or other agent employed by the Company or of the Subsidiary so
concerned) of the Company or a Subsidiary having managerial responsibility for
any such property, desirable in the conduct of the business of the Company or
such Subsidiary of the Company, and if such discontinuance or disposal is not
adverse in any material respect to the Holders.
(b) To the extent available at commercially reasonable rates,
the Company shall maintain, and shall cause its Subsidiaries to maintain,
insurance with responsible carriers against such risks and in such amounts, and
with such deductibles, retentions, self-insured amounts and co-insurance
provisions, as are customarily carried by similar businesses, of similar size.
SECTION 4.5 Compliance With Laws.
The Company shall comply, and shall cause each of its
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions in respect of the conduct of their respective businesses and
the ownership of their respective properties, except for such noncompliances as
would not in the aggregate have a material adverse effect on the financial
condition or results of operations of the Company and its Subsidiaries taken as
a whole.
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SECTION 4.6 Reports.
Whether or not the Company is subject to Section 13(a) or
15(d) of the Exchange Act, or any successor provision thereto, the Company shall
file with the Commission the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
pursuant to such Section 13(a) or 15(d) or any successor provision thereto if
the Company were subject thereto, such documents to be filed with the Commission
on or prior to the respective dates (the "Required Filing Dates") by which the
Company would have been required to file them. The Company shall also (whether
or not it is required to file reports with the Commission), within 30 days of
each Required Filing Date, (i) transmit by mail to all Holders of Notes, as
their names and addresses appear in the applicable Securities Register, without
cost to such Holders or Persons, and (ii) file with the Trustee, copies of the
annual reports, quarterly reports and other documents (without exhibits) which
the Company has filed or would have filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act, any successor provisions thereto or
this covenant. The Company shall not be required to file any report with the
Commission if the Commission does not permit such filing. In addition, the
Company shall furnish to the Trustee, the Holders of the Notes and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144(d)(4) under the Securities Act and the
exhibits omitted from the information furnished pursuant to the preceding
sentence, for so long as the Notes are not freely transferable under the
Securities Act.
SECTION 4.7 Taxes and Other Claims.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, (a) all material taxes, assessments,
and governmental charges levied or imposed upon the Company or any of its
Subsidiaries or upon the income, profits or property or assets of the Company or
any of its Subsidiaries and (b) all lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a Lien upon the property or
assets of the Company or any of its Subsidiaries, except such as are contested
in good faith and by appropriate proceedings or where the failure to effect such
payment is not adverse in any material respect to the Holders of the Notes and
for which adequate reserves in accordance with GAAP or other appropriate
provisions have been made.
SECTION 4.8 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenant (to the extent
that they may lawfully do so) that they shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, that may affect the covenants or the performance of this Indenture;
and the Company and each of the Guarantors (to the extent that they may lawfully
do so) hereby expressly waive all benefit or advantage of any such law, and
covenant that they shall not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
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SECTION 4.9 Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder
shall have the right to require the Company to repurchase such Holder's Notes in
whole or in part (the "Change of Control Offer") at a purchase price (the
"Change of Control Purchase Price") in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest thereon, if any, and
Special Interest, if any, to the Change of Control Payment Date. The Change of
Control Offer will remain open for a period of at least 30 days following its
commencement but no longer than 60 days, except to the extent that a longer
period is required by applicable law (the "Change of Control Offer Period"). On
the first Business Day after the termination of the Change of Control Offer
Period (the "Change of Control Payment Date"), the Company will purchase all
Notes validly tendered and not properly withdrawn pursuant to the Change of
Control Offer. Payment for any Notes so purchased will be made in the same
manner as interest payments are made on the Notes. If the Change of Control
Purchase Date is on or after a Record Date and on or before the related Interest
Payment Date, any accrued and unpaid interest and Special Interest (to the
extent involving interest that is due and payable on such Interest Payment
Date), if any, shall be paid to the Person in whose name a Note is registered at
the close of business on such Record Date, and no additional interest (or
Special Interest, if any) (to the extent involving interest that is due and
payable on such Interest Payment Date)) shall be payable to Holders who validly
tender Notes pursuant to the Change of Control Offer.
(b) Within 30 days following any Change of Control, the
Company or the Trustee (at the expense of the Company) shall mail by first class
mail, a notice to each Holder, with a copy of such notice to the Trustee. The
notice, which shall govern the terms of the Change of Control Offer, shall
state, among other things:
(i) that a Change of Control has occurred and a
Change of Control Offer is being made as provided for herein, and that,
although Holders are not required to tender their Notes, all Notes that
are validly tendered shall be accepted for payment;
(ii) the Change of Control Purchase Price and the
Change of Control Payment Date, which will be no earlier than 30 days
and no later than 60 days after the date such notice is mailed;
(iii) that any Note accepted for payment pursuant to
the Change of Control Offer (and duly paid for on the Change of Control
Payment Date) shall cease to accrue interest and Special Interest, if
applicable, after the Change of Control Payment Date;
(iv) that any Notes (or portions thereof) not validly
tendered shall continue to accrue interest and Special Interest, if
applicable;
(v) that any Holder electing to have a Note purchased
pursuant to any Change of Control Offer shall be required to surrender
the Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Note completed, or transfer by book-entry
transfer, to the Company, a depository, if appointed by the Company, or
a Paying Agent at the address specified in the notice at least one (1)
Business Day before the Change of Control Purchase Date;
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(vi) that Holders shall be entitled to withdraw their
election if the Company, the depository or the Paying Agent, as the
case may be, receives, not later than the expiration of the Change of
Control Offer Period, a telegram, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Note
the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased; and
(vii) the instructions and any other information
necessary to enable Holders to tender their Notes (or portions thereof)
and have such Notes (or portions thereof) purchased pursuant to the
Change of Control Offer.
(c) On or before the Change of Control Payment Date, the
Company shall, to the extent lawful, (1) accept for payment all Notes or
portions thereof validly tendered and not properly withdrawn pursuant to the
Change of Control Offer, (2) deposit by 12:00 noon, New York City time, on such
date with the Paying Agent an amount equal to the Change of Control Purchase
Price in respect of all Notes or portions thereof so validly tendered and not
properly withdrawn and (3) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the Company.
The Paying Agent shall promptly (but in any case not later than five days after
the Change of Control Payment Date) mail to each Holder of Notes so validly
tendered and not properly withdrawn the Change of Control Purchase Price for
such Notes.
(d) Upon surrender and cancellation of a Certificated Note
that is purchased in part pursuant to the Change of Control Offer, the Company
shall promptly issue and the Trustee shall authenticate and mail (or cause to be
transferred by book entry) to the surrendering Holder of such Certificated Note,
a new Certificated Note equal in principal amount to the unpurchased portion of
such surrendered Certificated Note; provided that each such new Certificated
Note shall be in a principal amount of $1,000 or an integral multiple thereof.
Upon surrender of a Global Note that is purchased in part
pursuant to a Change of Control Offer, the Paying Agent shall forward such
Global Note to the Trustee who shall make a notation on Schedule A thereof to
reduce the principal amount of such Global Note to an amount equal to the
unpurchased portion of such Global Note, as provided in Section 2.6 hereof. The
Company shall publicly announce the results of the Change of Control Offer on
the Change of Control Payment Date. For purposes of this Section 4.9, the
Trustee shall act as the Paying Agent.
(e) The Company shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Company and purchases all Notes validly tendered and not withdrawn
under such Change of Control Offer.
(f) The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the Notes as a result of a Change of Control.
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SECTION 4.10 Transactions With Affiliates.
Subsequent to the Issue Date, the Company shall not, and shall
not permit any Subsidiary to, directly or indirectly, enter into or permit to
exist any transaction or series of related transactions (including, but not
limited to, the purchase, sale or exchange of Property, the making of any
Investment, the giving of any guarantee or the rendering of any service) with
any Affiliate of the Company, other than transactions among the Company and any
Subsidiaries, unless (i) such transaction or series of related transactions is
on terms no less favorable to the Company or such Subsidiary than those that
could be obtained in a comparable arm's length transaction with a Person that is
not such an Affiliate, and (ii) (a) with respect to a transaction or series of
related transactions that has a Fair Market Value in excess of $1,000,000, the
transaction or series of related transactions is approved by a majority of the
Board of Directors of the Company (including a majority of the disinterested
directors), which approval is set forth in a Board Resolution certifying that
such transaction or series of transactions complies with clause (i) above, and
(b) with respect to a transaction or series of related transactions that has a
Fair Market Value in excess of $3,000,000, the Company delivers an opinion as to
the fairness from a financial point of view to the Company or such Subsidiary
issued by an investment banking firm of nationally recognized standing or other
independent appraisal firm or expert of nationally recognized standing that is
qualified, in the reasonable and good faith judgment of the Board of Directors,
to perform the task for which it has been engaged. The foregoing provisions
shall not be applicable to (i) reasonable and customary compensation,
indemnification and other benefits paid or made available to an officer,
director or employee of the Company or a Subsidiary for services rendered in
such person's capacity as an officer, director or employee (including
reimbursement or advancement of reasonable out-of-pocket expenses and provisions
of directors' and officers' liability insurance); (ii) the making of any
Restricted Payment otherwise permitted herein, (iii) transactions and agreements
existing on the Issue Date and described in the Offering Memorandum under the
caption " -- Certain Relationships and Related Transactions" and (iv) loans to
officers and employees of the Company and its Subsidiaries made in the ordinary
course of business and in furtherance of the Company's business in an aggregate
amount not to exceed $500,000 at any one time outstanding.
SECTION 4.11 Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Subsidiary
to, make any Restricted Payment, unless at the time of and after giving effect
to the proposed Restricted Payment, (i) no Default shall have occurred and be
continuing (or would result therefrom), (ii) the Company could incur at least
$1.00 of additional Indebtedness under the test described in the first sentence
of Section 4.12 and (iii) the aggregate amount of all Restricted Payments
declared or made on or after the Issue Date by the Company or any Subsidiary
shall not exceed the sum of (A) $1 million, plus (B) 50% (or if such
Consolidated Net Income shall be a deficit, minus 100% of such deficit) of the
aggregate Consolidated Net Income accrued during the period beginning on the
first day of the fiscal quarter in which the Issue Date falls and ending on the
last day of the fiscal quarter ending immediately prior to the date of such
proposed Restricted Payment, minus 100% of the amount of any writedowns,
write-offs and other negative extraordinary charges not otherwise reflected in
Consolidated Net Income during such period, plus (C) an amount equal to the
aggregate net cash proceeds received by the Company, subsequent to the Issue
Date, from the issuance or sale (other than to a Subsidiary) of shares of its
Capital Stock (excluding Redeemable Stock, but including Capital Stock issued
upon the exercise of options, warrants or rights to purchase Capital Stock
(other
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than Redeemable Stock) of the Company) subsequent to the Issue Date, plus (D)
100% of the liability (expressed as a positive number) as expressed on the face
of a balance sheet in accordance with GAAP in respect of any Indebtedness of the
Company or any of its Subsidiaries, or the carrying value of Redeemable Stock,
which has been converted into, exchanged for or satisfied by the issuance of
shares of Capital Stock (other than Redeemable Stock) of the Company, subsequent
to the Issue Date, plus (E) 100% of the net reduction in Restricted Investments,
subsequent to the Issue Date, in any Person, resulting from payments of interest
on Indebtedness, dividends, repayments of loans or advances, or other transfers
of Property (but only to the extent such interest, dividends, repayments or
other transfers of Property are not included in the calculation of Consolidated
Net Income), in each case to the Company or any Subsidiary from any Person
(including, without limitation, from Unrestricted Subsidiaries) or from
redesignations of Unrestricted Subsidiaries as Subsidiaries (valued in each case
as provided in the definition of "Investment"), not to exceed in the case of any
Person the amount of Restricted Investments previously made by the Company or
any Subsidiary in such Person and in each such case which was treated as a
Restricted Payment.
(b) The provisions of Section 4.11(a) above shall not prevent
(A) the payment of any dividend on Capital Stock of any class within 60 days
after the date of its declaration if at the date of declaration such payment
would have been permitted by this Indenture; (B) any repurchase or redemption of
Capital Stock or Subordinated Indebtedness of the Company or a Subsidiary made
by exchange for Capital Stock of the Company (other than Redeemable Stock), or
out of the net cash proceeds from the substantially concurrent issuance or sale
(other than to a Subsidiary) of Capital Stock of the Company (other than
Redeemable Stock), provided that the net cash proceeds from such sale are
excluded from computations under clause (a)(iii)(C) of this Section to the
extent that such proceeds are applied to purchase or redeem such Capital Stock
or Subordinated Indebtedness; (C) so long as no Default shall have occurred and
be continuing or should occur as a consequence thereof, any repurchase or
redemption of Subordinated Indebtedness of the Company or a Subsidiary solely in
exchange for, or out of the net cash proceeds from the substantially concurrent
sale of, new Subordinated Indebtedness of the Company or a Subsidiary, so long
as such Subordinated Indebtedness is permitted under the covenant described in
Section 4.12 and (x) is subordinated to the Notes at least to the same extent as
the Subordinated Indebtedness so exchanged, purchased or redeemed, (y) has a
stated maturity later than the stated maturity of the Subordinated Indebtedness
so exchanged, purchased or redeemed and (z) has an Average Life at the time
incurred that is greater than the remaining Average Life of the Subordinated
Indebtedness so exchanged, purchased or redeemed; (D) Investments in any Joint
Ventures in an aggregate amount not to exceed $2,000,000; (E) existing affiliate
leases set forth on Schedule 4.11 attached hereto and renewals and extensions
thereof not involving changes in the terms thereof materially adverse to the
Company; (F) any dividend, obligation or other payment by any Subsidiary on
shares of its Common Stock that is paid pro rata to all holders of such Common
Stock and (G) so long as no Default or Event of Default shall have occurred and
be continuing, repurchases by the Company of Capital Stock (other than Preferred
Stock) of the Company from officers and employees of the Company or any of its
Subsidiaries or their authorized representatives upon the death, disability or
termination of employment of such employees, in an aggregate amount not to
exceed $1,000,000 in any calendar year. Notwithstanding the foregoing, the
amount available for Investments in Joint Ventures pursuant to clause (D) of the
preceding sentence may be increased by the aggregate amount received by the
Company and its Subsidiaries from a Joint Venture on or before such date
resulting from payments of interest on Indebtedness, dividends, repayments of
loans or advances or other transfers of Property made to such Joint Venture (but
only to the extent such interest, dividends, repayments or other transfers of
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Property are not included in the calculation of Consolidated Net Income).
Restricted Payments permitted to be made as described in the first sentence of
this Section 4.11(b) shall be excluded in calculating the amount of Restricted
Payments thereafter, except that any dividends, distributions or other payments
made to a Person other than the Company or a Wholly Owned Subsidiary permitted
to be made pursuant to clause (F) and any repurchase of Capital Stock of the
Company permitted to be made pursuant to clause (G) will be included in
calculating the amount of Restricted Payments thereafter and except that any
such Restricted Payments permitted to be made pursuant to clause (D) shall be
included in calculating the amount of Restricted Payments made pursuant to such
clause (D) thereafter.
(c) For purposes of this covenant, if a particular Restricted
Payment involves a non-cash payment, including a distribution of assets, then
such Restricted Payment shall be deemed to be an amount equal to the cash
portion of such Restricted Payment, if any, plus an amount equal to the Fair
Market Value of the non-cash portion of such Restricted Payment.
(d) If the Board of Directors of the Company designates a
subsidiary (including a newly formed or newly acquired subsidiary) of the
Company or any of the Subsidiaries as an Unrestricted Subsidiary pursuant to
Section 4.19, all outstanding Investments by the Company and its Subsidiaries in
the subsidiary so designated will be deemed to be Restricted Payments at the
time of such designation and will reduce the amount available for Restricted
Payments under Section 4.11(a)(iii) above.
SECTION 4.12 Limitation on Indebtedness.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, incur any Indebtedness (including Acquired
Indebtedness), unless after giving pro forma effect to the incurrence of such
Indebtedness, the Consolidated Interest Coverage Ratio for the Determination
Period preceding the Transaction Date is at least 2.0 to 1.0. Notwithstanding
the foregoing, the Company or any Subsidiary may incur Permitted Indebtedness
which such Person is permitted thereby to incur. Any Indebtedness of a Person
existing at the time at which such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be incurred
by such Subsidiary at the time at which it becomes a Subsidiary.
SECTION 4.13 Limitation on Subsidiary Indebtedness and Preferred Stock.
The Company shall not permit any Subsidiary to, directly or
indirectly, incur any Indebtedness or issue any Preferred Stock except:
(a) Indebtedness or Preferred Stock issued to and held by
the Company or a Subsidiary, so long as any transfer of such
Indebtedness or Preferred Stock to a Person other than the Company or a
Subsidiary shall be deemed to constitute an incurrence of such
Indebtedness or Preferred Stock by the issuer thereof as of the date of
such transfer;
(b) Acquired Indebtedness or Preferred Stock of a
Subsidiary issued and outstanding prior to the date on which such
Subsidiary was acquired by the Company (other than Indebtedness or
Preferred Stock issued in connection with or in anticipation of such
acquisition);
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(c) Indebtedness or Preferred Stock outstanding on the
Issue Date and listed in Schedule 4.13 attached hereto;
(d) Indebtedness permitted to be incurred by the first
sentence of the covenant described in Section 4.12 and Indebtedness
described in clauses (b), (c), (d), (e), (f), (g), (h) and (l) under
the definition of "Permitted Indebtedness";
(e) Permitted Subsidiary Refinancing Indebtedness of
such Subsidiary; and
(f) Indebtedness of a Subsidiary which represents the
assumption by such Subsidiary of Indebtedness of another Subsidiary in
connection with a merger of such Subsidiaries, provided that no
Subsidiary or any successor (by way of merger) thereto existing on the
Issue Date shall assume or otherwise become responsible for any
Indebtedness of an entity which is not a Subsidiary on the Issue Date,
except to the extent that a Subsidiary would be permitted to incur such
Indebtedness under this Section 4.13.
SECTION 4.14 Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.
The Company shall not, and shall not permit any Subsidiary,
directly or indirectly, to create, enter into any agreement with any Person or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind which by its terms restricts the ability
of any Subsidiary to (a) pay dividends, in cash or otherwise, or make any other
distributions on its Capital Stock to the Company or any Subsidiary, (b) pay any
Indebtedness owed to the Company or any Subsidiary, (c) make loans or advances
to the Company or any Subsidiary or (d) transfer any of its Property or assets
to the Company or any Subsidiary except any encumbrance or restriction contained
in any agreement or instrument:
(i) existing on the Issue Date;
(ii) relating to any Property or assets acquired after the
Issue Date, so long as such encumbrance or restriction relates only to
the Property or assets so acquired and is not and are not created in
anticipation of such acquisition;
(iii) relating to any Acquired Indebtedness of any
Subsidiary at the date on which such Subsidiary was acquired by the
Company or any Subsidiary (other than Indebtedness incurred in
anticipation of such acquisition);
(iv) effecting a refinancing of Indebtedness incurred
pursuant to an agreement referred to in clauses (i) through (iii) of
this Section, so long as the encumbrances and restrictions contained in
any such refinancing agreement are no more restrictive than the
encumbrances and restrictions contained in such agreements;
(v) constituting customary provisions restricting
subletting or assignment of any lease of the Company or any Subsidiary
or provisions in license agreements or similar agreements that restrict
the assignment of such agreement or any rights thereunder;
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(vi) constituting restrictions on the sale or other
disposition of any Property securing Indebtedness as a result of a
Permitted Lien on such Property;
(vii) constituting any temporary encumbrance or
restriction with respect to a Subsidiary pursuant to an agreement that
has been entered into for the sale or disposition of all or
substantially all of the Capital Stock of, or Property and assets of,
such Subsidiary; or
(viii) governing Senior Debt permitted to be incurred
hereunder, provided that the terms and conditions of any such
restrictions and encumbrances are not materially more restrictive than
those contained in this Indenture.
SECTION 4.15 Limitation on Asset Sales.
(a) The Company shall not engage in, and shall not permit any
Subsidiary to engage in, any Asset Sale unless: (i) except in the case of an
Asset Sale resulting from the requisition of title to, seizure or forfeiture of
any Property or assets or any actual or constructive total loss or an agreed or
compromised total loss, the Company or such Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the Property; (ii) at least 75% of such consideration consists
of Cash Proceeds (or the assumption of Indebtedness of the Company or such
Subsidiary relating to the Capital Stock or Property or asset that was the
subject of such Asset Sale and the unconditional release of the Company or such
Subsidiary from such Indebtedness); (iii) after giving effect to such Asset
Sale, the total non-cash consideration held by the Company from all such Asset
Sales does not exceed $2,000,000; and (iv) the Company delivers to the Trustee
an Officers' Certificate certifying that such Asset Sale complies with clauses
(i), (ii) and (iii). The Company or such Subsidiary, as the case may be, may
apply the Net Available Proceeds from each Asset Sale (x) to the acquisition of
one or more Replacement Assets, or (y) to repurchase or repay Senior Debt (with
a permanent reduction of availability in the case of revolving credit
borrowings); provided that such acquisition or such repurchase or repayment
shall be made within 270 days after the consummation of the relevant Asset Sale;
provided, further, that any such Net Available Proceeds that are applied to the
acquisition of Replacement Assets useful in the business of the Company or any
of its Subsidiaries pursuant to any binding agreement relating thereto shall be
deemed to have been applied for such purpose within such 270-day period so long
as they are so applied within 30 days of the effective date of such agreement.
(b) Any Net Available Proceeds from any Asset Sale that are
not used so to acquire Replacement Assets or to repurchase or repay Senior Debt
within 270 days after consummation of the relevant Asset Sale constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $5,000,000, the
Company shall within 270 days thereafter, or at any time after receipt of Excess
Proceeds but prior to there being $5,000,000 of Excess Proceeds, the Company
may, at its option, make a pro rata offer (an "Asset Sale Offer") to all Holders
of Notes and holders of Senior Debt, if and to the extent the Company is
required by the instruments governing such Senior Debt to make such an offer, to
purchase Notes and such Senior Debt in an aggregate amount equal to the Excess
Proceeds, at a price in cash (the "Asset Sale Offer Purchase Price") equal to
100% of the outstanding principal amount of the Notes plus accrued interest and
Special Interest, if any, to the date of purchase and, in the case of such other
Senior Debt, 100% of the principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of
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purchase, in accordance with the procedures set forth in this Section 4.15. Upon
completion of such Asset Sale Offer, the amount of Excess Proceeds shall be
reset to zero and the Company may use any remaining amount for general corporate
purposes.
(c) The Asset Sale Offer will remain open for a period of at
least 30 days following its commencement but no longer than 60 days, except to
the extent that a longer period is required by applicable law (the "Asset Sale
Offer Period"). On the Business Day following the termination of the Asset Sale
Offer Period (the "Asset Sale Purchase Date"), the Company will purchase the
principal amount of Notes required to be purchased pursuant to this Section 4.15
(the "Asset Sale Offer Amount") or, if less than the Asset Sale Offer Amount has
been so validly tendered and not properly withdrawn, all Notes validly tendered
and not properly withdrawn in response to the Asset Sale Offer. Payment for any
Notes so purchased will be made in the same manner as interest payments are made
on the Notes. If the Asset Sale Purchase Date is on or after a Record Date and
on or before the related Interest Payment Date, any accrued and unpaid interest
and Special Interest, if any, shall be paid to the Person in whose name a Note
is registered at the close of business on such Record Date, and no additional
interest (or Special Interest (to the extent involving interest that is due and
payable on such Interest Payment Date), if any) shall be payable to Holders who
tender Notes pursuant to the Asset Sale Offer.
(d) Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the
Holders. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset
Sale Offer shall be made to all Holders. The notice, which shall govern the
terms of the Asset Sale Offer, shall state:
(i) that the Asset Sale Offer is being made
pursuant to this Section 4.15 and the Asset Sale Offer Period during
which the Asset Sale Offer shall remain open;
(ii) the Asset Sale Offer Amount, the Asset Sale
Offer Purchase Price and the Asset Sale Purchase Date;
(iii) that any Notes which are not validly
tendered or are not otherwise accepted for payment shall continue to
accrue interest and Special Interest, if applicable;
(iv) that, unless the Company defaults in making
such payment, any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest and Special Interest, if
applicable, after the Asset Sale Purchase Date;
(v) that any Holder electing to have a Note
purchased pursuant to any Asset Sale Offer shall be required to
surrender the Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, or transfer by
book-entry transfer, to the Company, a depository, if appointed by the
Company, or a Paying Agent at the address specified in the notice at
least one Business day before the Asset Sale Purchase Date;
(vi) that Holders shall be entitled to withdraw
their election if the Company, the Depository or the Paying Agent, as
the case may be, receives, no later than
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the expiration of the Asset Sale Offer Period, a telegram, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such
Note purchased;
(vii) that, if the aggregate principal amount of
Notes surrendered by Holders exceeds the Asset Sale Offer Amount, the
Trustee shall select the Notes to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Trustee so
that only Notes in denominations of $1,000, or integral multiples
thereof, shall be purchased); and
(viii) that Holders whose Notes were purchased
only in part shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer).
(e) On or before the Asset Sale Purchase Date, the Company
shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the
extent necessary, the Asset Sale Offer Amount of Notes or portions thereof so
validly tendered and not properly withdrawn pursuant to the Asset Sale Offer, or
if less than the Asset Sale Offer Amount has been so validly tendered and not
properly withdrawn, all Notes validly tendered and not properly withdrawn, (2)
deposit by 12:00 noon New York City time, on such date with the Paying Agent an
amount equal to Asset Sale Offer Amount, plus accrued and unpaid interest, and
Special Interest, if any, in respect of all Notes, or portions thereof, so
accepted and (3) shall deliver to the Trustee an Officers' Certificate stating
that such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 4.15. The Company, the Depository or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Asset Sale Purchase Date) mail or deliver to each
tendering Holder an amount equal to the Asset Sale Offer Purchase Price of the
Notes validly tendered and not properly withdrawn by such Holder and accepted by
the Company for purchase. Upon surrender and cancellation of a Certificated Note
that is purchased in part, the Company shall promptly issue and the Trustee
shall authenticate and deliver to the surrendering Holder of such Certificated
Note a new Certificated Note equal in principal amount to the unpurchased
portion of such surrendered Certificated Note; provided that each such new
Certificated Note shall be in a principal amount at Maturity of $1,000 or an
integral multiple thereof. Upon surrender of a Global Note that is purchased in
part pursuant to an Asset Sale Offer, the Paying Agent shall forward such Global
Note to the Trustee who shall make a notation on Schedule A thereof to reduce
the principal amount of such Global Note to an amount equal to the unpurchased
portion of such Global Note, as provided in Section 2.6 hereof. Any Note not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale offer
on the Asset Sale Purchase Date. For purposes of this Section 4.15, the Trustee
shall act as the Paying Agent.
(f) The Company shall comply with any applicable tender offer
rules (including, without limitation, any applicable requirements of Rule 14e-1
under the Exchange Act) in the event that an Asset Sale Offer is required under
the circumstances described herein.
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SECTION 4.16 Limitation on Sale and Lease-Back Transactions.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, enter into, assume, guarantee or otherwise become liable
with respect to any Sale and Lease-Back Transaction unless (i) the proceeds from
such Sale and Lease-Back Transaction are at least equal to the Fair Market Value
of such Property being transferred and (ii) the Company or such Subsidiary would
have been permitted to enter into such transaction under the covenants described
in Sections 4.12, 4.13 and 4.17.
SECTION 4.17 Limitation on Liens.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, create, affirm, incur, assume or suffer to exist any
Liens of any kind other than Permitted Liens on or with respect to any Property
or assets of the Company or such Subsidiary or any interest therein or any
income or profits therefrom, whether owned at the Issue Date or thereafter
acquired, without effectively providing that the Notes or the Guarantees, as
applicable, shall be secured equally and ratably with (or prior to) the
Indebtedness so secured for so long as such obligations are so secured.
SECTION 4.18 Limitation on Guarantees by Subsidiaries.
The Company shall not permit any Subsidiary which is not
already a Guarantor, directly or indirectly, to guarantee any Indebtedness of
the Company or any other Obligor ("Guaranteed Indebtedness") unless (i) such
Subsidiary simultaneously executes and delivers a supplemental indenture to this
Indenture providing for a Guarantee of payment of the Notes by such Subsidiary
and (ii) such Subsidiary waives and will not in any manner whatsoever claim or
take the benefit or advantage of, any rights of reimbursement, indemnity or
subrogation or any other rights against the Company or any other Subsidiary as a
result of any payment by such Subsidiary under its Guarantee. If the Guaranteed
Indebtedness is pari passu with the Notes, then the guarantee of such Guaranteed
Indebtedness shall be pari passu with or subordinated to the Guarantee; and if
the Guaranteed Indebtedness is subordinated to the Notes, then the guarantee of
such Indebtedness shall be subordinated to the Guarantee at least to the extent
that all Guaranteed Indebtedness is subordinated to the Notes. Notwithstanding
the foregoing, any Guarantee by a Subsidiary that was incurred pursuant to the
terms of the preceding sentence (but not otherwise) shall provide by its terms
that it shall be automatically and unconditionally released and discharged upon
the release or discharge of the guarantee which resulted in the creation of such
Subsidiary's Guarantee, except a discharge or release by, or as a result of,
payment under such guarantee.
SECTION 4.19 Unrestricted Subsidiaries.
(a) The Company may designate a subsidiary (including a newly
formed or newly acquired subsidiary) of the Company or any of its Subsidiaries
as an Unrestricted Subsidiary; provided that (i) immediately after giving effect
to the transaction, the Company could incur $1.00 of additional Indebtedness
pursuant to the first sentence of Section 4.12 and (ii) such designation is at
the time permitted under Section 4.11. Notwithstanding any provisions of this
covenant all subsidiaries of an Unrestricted Subsidiary shall be Unrestricted
Subsidiaries.
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(b) The Company will not, and will not permit any of its
Subsidiaries to, take any action or enter into any transaction or series of
transactions that would result in a Person (other than a newly formed subsidiary
having no outstanding Indebtedness (other than Indebtedness to the Company or a
Subsidiary) at the date of determination) becoming a Subsidiary (whether through
an acquisition, the redesignation of an Unrestricted Subsidiary or otherwise)
unless, after giving effect to such action, transaction or series of
transactions on a pro forma basis, (i) the Company could incur at least $1.00 of
additional Indebtedness pursuant to the first sentence of Section 4.12 and (ii)
no Default or Event of Default would occur.
(c) Subject to the preceding provisions of this Section 4.19,
an Unrestricted Subsidiary may be redesignated as a Subsidiary. The designation
of a subsidiary as an Unrestricted Subsidiary or the designation of an
Unrestricted Subsidiary as a Subsidiary in compliance with the preceding
provisions of this Section 4.19 shall be made by the Board of Directors pursuant
to a Board Resolution delivered to the Trustee and shall be effective as of the
date specified in such Board Resolution, which shall not be prior to the date
such Board Resolution is delivered to the Trustee. Any Unrestricted Subsidiary
shall become a Subsidiary if it incurs any Indebtedness other than Non-Recourse
Indebtedness. If at any time Indebtedness of an Unrestricted Subsidiary which
was Non-Recourse Indebtedness no longer so qualifies, such Indebtedness shall be
deemed to have been incurred when such Non-Recourse Indebtedness becomes
Indebtedness.
SECTION 4.20 Limitations on Line of Business.
Neither the Company nor any of its Subsidiaries shall directly
or indirectly engage to any substantial extent in any line or lines of business
activity other than a Related Business.
SECTION 4.21 Compliance Certificate; Notice of Default or Event of Default.
(a) The Company and each Guarantor shall deliver to the
Trustee, within 90 days after the end of each fiscal year, an Officers'
Certificate (which shall be signed by Officers satisfying the requirements of
Section 314 of the Trust Indenture Act) stating that a review of the activities
of the Company and its Subsidiaries during the preceding fiscal year has been
made under the supervision of the signing Officers with a view to determining
whether the Company has kept, observed, performed and fulfilled its obligations
under this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of, interest, if any, or Special Interest,
if any, on the Notes is prohibited or if such event has occurred, a description
of the event and what action the Company is taking or proposes to take with
respect thereto.
(b) The year-end financial statements delivered pursuant to
Section 4.6(a) hereof shall be accompanied by a written statement of the
independent public accountants of the
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Company (who shall be a firm of established national reputation) that in making
the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Article 4 or Article 5 hereof (except
that, such written statement need not address the Company's compliance with the
provisions of Sections 4.2, 4.5, 4.6, 4.8, 4.9, 4.10 or 4.22 hereof) or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon, but in any event within
five Business Days after, any Officer's becoming aware of any Default or Event
of Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.
(d) For purposes of this Section 4.21, compliance shall be
determined without required by any period of grace or requirement of notice
under this Indenture.
SECTION 4.22 Prohibition on Company and Guarantors Becoming an Investment
Company.
None of the Company or the Guarantors shall become an
"Investment Company" as defined in the Investment Company Act of 1940, as
amended.**
ARTICLE 5.
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.1 Consolidation, Merger, Conveyance, Lease or Transfer.
(a) The Company shall not, in any transaction or series of
transactions, consolidate with or merge into any other Person (other than a
merger of a Wholly Owned Subsidiary into the Company in which the Company is the
continuing corporation), continue in a new jurisdiction or sell, convey, assign,
transfer, lease or otherwise dispose of all or substantially all of the Property
and assets of the Company and the Subsidiaries, taken as a whole, to any Person,
unless:
(i) either (a) the Company shall be the continuing
corporation or (b) the corporation (if other than the Company) formed
by such consolidation or into which the Company is merged, or the
Person which acquires, by sale, assignment, conveyance, transfer, lease
or disposition, all or substantially all of the Property and assets of
the Company and the Subsidiaries, taken as a whole (such corporation or
Person, the "Surviving Entity"), shall be a corporation organized and
validly existing under the laws of the United States of America, any
political subdivision thereof or any state thereof or the District of
Columbia, and shall expressly assume, by a supplemental indenture, the
due and punctual payment of the principal of (and premium, if any) and
interest (including Special Interest, if any) on all the Notes and the
performance of the Company's covenants and obligations under this
Indenture;
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(ii) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis (including,
without limitation, any Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction or series
of transactions), no Event of Default or Default shall have occurred
and be continuing or would result therefrom;
(iii) immediately after giving effect to such transaction
or series of transactions on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of
transactions), the Company (or the Surviving Entity if the Company is
not continuing) shall have a Consolidated Net Worth equal to or greater
than the Consolidated Net Worth of the Company immediately prior to
such transactions; and
(iv) immediately after giving effect to any such
transaction or series of transactions on a pro forma basis as if such
transaction or series of transactions had occurred on the first day of
the Determination Period, the Company (or the Surviving Entity if the
Company is not continuing) would be permitted to incur $1.00 of
additional Indebtedness pursuant to the test described in the first
sentence of Section 4.12.
The provision of clause (iv) shall not apply to any merger or
consolidation into or with, or any such transfer of all or substantially all of
the Property and assets of the Company and the Subsidiaries taken as a whole
into, the Company.
(b) In connection with any consolidation, merger, continuance,
transfer of assets or other transactions contemplated by this provision, the
Company shall deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger,
continuance, sale, assignment, conveyance or transfer and the supplemental
indenture in respect thereto comply with the provisions of this Indenture and
that all conditions precedent in this Indenture relating to such transactions
have been complied with.
(c) Upon any transaction or series of transactions that are of
the type described in, and are effected in accordance with, this Section 5.1,
the Surviving Entity shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture and the Notes with
the same effect as if such Surviving Entity had been named as the Company in
this Indenture; and when a Surviving Person duly assumes all of the obligations
and covenants of the Company pursuant to this Indenture and the Notes, except in
the case of a lease, the predecessor Person shall be relieved of all such
obligations.
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SECTION 5.2 Successor Corporation Substituted.
Upon any consolidation or merger by the Company with or into any
other corporation, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1 hereof, the successor corporation formed by such
consolidation into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to "the Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor of the Company shall not be relieved from the obligation to pay
the principal, premium, if any, and interest and Special Interest, if any, on
the Notes except in the case of a sale of all of the Company's assets that meets
the requirements of Section 5.1 hereof.
If the Surviving Entity shall have succeeded to and been substituted
for the Company, such Surviving Entity may cause to be signed, and may issue
either in its own name or in the name of the Company prior to such succession
any or all of the Notes issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of such
Surviving Entity, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Notes which previously shall have been signed
and delivered by the Officers of the Company to the Trustee for authentication,
and any Notes which such Surviving Entity thereafter shall cause to be signed
and delivered to the Trustee for that purpose (in each instance with notations
of Guarantees thereon by the Guarantors). All of the Notes so issued and so
endorsed shall in all respects have the same legal rank and benefit under this
Indenture as the Notes theretofore or thereafter issued and endorsed in
accordance with the terms of this Indenture and the Guarantees as though all
such Notes had been issued and endorsed at the date of the execution hereof.
In case of any such consolidation, merger, continuance, sale,
transfer, conveyance or other disposal, such changes in phraseology and form
(but not in substance) may be made in the Notes thereafter to be issued or the
Guarantees to be endorsed thereon as may be appropriate.
For all purposes of this Indenture and the Notes, Subsidiaries of
any Surviving Entity will, upon such transaction or series of transactions,
become Subsidiaries or Unrestricted Subsidiaries as provided pursuant to this
Indenture and all Indebtedness, and all Liens on Property or assets, of the
Surviving Entity and its Subsidiaries immediately prior to such transaction or
series of transactions shall be deemed to have been incurred upon such
transaction or series of transactions.
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ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default.
Each of the following is an "Event of Default" hereunder:
(a) default in the payment of interest on, or Special Interest
with respect to, any Note issued pursuant to this Indenture when the
same becomes due and payable, and the continuance of such default
for a period of 30 days;
(b) default in the payment of the principal of (or premium, if
any, on) any Note issued pursuant to this Indenture at its Maturity,
whether upon optional redemption, required repurchase (including
pursuant to a Change of Control Offer or an Asset Sale Offer) or
otherwise or the failure to make an offer to purchase any such Note
as required;
(c) the Company fails to comply with any of its covenants or
agreements contained in Sections 4.9, 4.11, 4.12, 4.13, 4.15, 4.16,
4.21(c) and 5.1;
(d) default in the performance, or breach, of any covenant of
the Company in this Indenture (other than a covenant addressed in
clause (a), (b) or (c) above) and continuance of such Default or
breach for a period of 30 days after written notice thereof has been
given to the Company by the Trustee or to the Company and the
Trustee by Holders of at least 25% of the aggregate principal amount
at Stated Maturity of the outstanding Notes;
(e) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any
of its Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date of the Indenture,
which default (a) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (b) results in the
acceleration of such Indebtedness prior to its express maturity and,
in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $10,000,000 or more;
(f) the entry by a court of competent jurisdiction of one or
more final judgments against the Company or any Subsidiary in an
uninsured or unindemnified aggregate amount in excess of $5,000,000
which is not discharged, waived, appealed, stayed, bonded or
satisfied for a period of 60 consecutive days;
(g) the entry by a court having jurisdiction in the premises
of (i) a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary
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case or proceeding under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state, or foreign
bankruptcy, insolvency, or other similar law or (ii) a decree or
order adjudging the Company or any Significant Subsidiary a bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in
respect of the Company or any Significant Subsidiary under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency, or
similar law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the
Company or any Significant Subsidiary or of any substantial part of
the Property or assets of the Company or any Significant Subsidiary,
or ordering the winding up or liquidation of the affairs of the
Company or any Significant Subsidiary, and the continuance of any
such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days;
(h) (i) the commencement by the Company or any Significant
Subsidiary of a voluntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable
Federal, state or foreign bankruptcy, insolvency or other similar
law or of any other case or proceeding to be adjudicated a bankrupt
or insolvent; or (ii) the consent by the Company or any Significant
Subsidiary to the entry of a decree or order for relief in respect
of the Company or any Significant Subsidiary in an involuntary case
or proceeding under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state, or foreign
bankruptcy, insolvency or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against the
Company or any Significant Subsidiary; or (iii) the filing by the
Company or any Significant Subsidiary of a petition or answer or
consent seeking reorganization or relief under U.S. bankruptcy laws,
as now or hereafter constituted, or any other applicable Federal,
state or foreign bankruptcy, insolvency or other similar law; or
(iv) the consent by the Company or any Significant Subsidiary to the
filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or any Significant
Subsidiary or of any substantial part of the Property or assets of
the Company or any Significant Subsidiary, or the making by the
Company or any Significant Subsidiary of an assignment for the
benefit of creditors; or (v) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due; or (vi) the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of any
such action; or
(i) any Guarantee shall for any reason cease to be, or be
asserted by the Company or any Guarantor, as applicable, not to be,
in full force and effect (except pursuant to the release of any such
Guarantee in accordance with this Indenture).
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SECTION 6.2 Acceleration.
If any Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.1) occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% of the outstanding
aggregate principal amount at Stated Maturity of the Notes, may declare the
principal amount at Stated Maturity of, premium, if any, and any accrued and
unpaid interest (and Special Interest, if any) on all such Notes then
outstanding to be immediately due and payable by a notice in writing to the
Company (and to the Trustee if given by Holders of such Notes), and upon any
such declaration all amounts payable in respect of the Notes will become and be
immediately due and payable. If any Event of Default specified in clause (g) or
(h) of Section 6.1 occurs, the principal amount at Stated Maturity of, premium,
if any, and any accrued and unpaid interest (including Special Interest, if any)
on the Notes then outstanding shall become immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder of such
Notes. In the event of a declaration of acceleration because an Event of Default
set forth in clause (e) of Section 6.1 has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if the
event of default triggering such Event of Default pursuant to clause (e) of
Section 6.1 shall be remedied or cured or waived by the holders of the relevant
Indebtedness within 30 days after such event of default; provided that no
judgment or decree for the payment of the money due on the Notes has been
obtained by the Trustee as provided in this Indenture.
After any such acceleration, but before a judgment or decree based
on acceleration, Holders of a majority in principal amount at Stated Maturity of
the outstanding Notes by notice to the Company and the Trustee may rescind an
acceleration and its consequences if:
(a) the Company or any Guarantor has paid or deposited with the
Trustee a sum sufficient to pay
(i) all money paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursement and advances of the Trustee,
its agents and counsel, and any other amounts due to the Trustee under Section
7.7;
(ii) all overdue installments of interest and Special
Interest, if any, on, and any other amounts due in respect of, all Notes;
(iii) the principal of (and premium, if any, on) any Notes
that have become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in the Notes and this
Indenture; and
(iv) to the extent that payment of such interest is lawful,
interest upon Defaulted Interest at the rate or rates prescribed therefor in the
Notes and this Indenture;
(b) all Events of Default, other than the nonpayment of principal of
Notes which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 6.4;
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(c) the annulment of such acceleration would not conflict with any
judgment or decree of a court of competent jurisdiction; and
(d) the Company has delivered an Officers' Certificate to the
Trustee to the effect of clauses (b) and (c) of this sentence.
No such recission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.3 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of, premium, on,
if any, any interest on, Special Interest, if any, on, and any other amounts
owing and unpaid on, the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.4 Waiver of Past Defaults.
Subject to Section 6.7 hereof, Holders of not less than a majority
in aggregate principal amount of the then outstanding Notes by notice to the
Trustee may on behalf of the Holders of all of the Notes waive an existing
Default or Event of Default and its consequences hereunder, except (i) an
existing Default or Event of Default in the payment of the principal of,
premium, if any, on, or interest and Special Interest, if any, on, the Notes
(including in connection with an offer to purchase) or (ii) an existing Default
or Event of Default in respect of a provision that under Section 10.2 cannot be
amended without the consent of each Holder affected thereby. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
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SECTION 6.5 Control By Majority.
The Holders of a majority in aggregate principal amount of the Notes
then outstanding may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section 7.1
hereof, that the Trustee determines may be unduly prejudicial to the rights of
other Holders of Notes or that may involve the Trustee in personal liability, it
being understood that (subject to Section 7.1) the Trustee shall have no duty to
ascertain whether or not such actions or forbearances are unduly prejudicial to
such Holders; provided that the Trustee may take any other action deemed by the
Trustee that is not inconsistent with such direction. Prior to taking any action
hereunder, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by taking or not
taking such action.
SECTION 6.6 Limitation on Suits.
No Holder of any Note shall have the right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, the
Guarantees or the Notes, or for the appointment of a receiver or a trustee, or
for any other remedy, unless:
(a) the Holder of a Note has given to the Trustee written notice of
a continuing Event of Default;
(b) a Holder or Holders of at least 25% in principal amount of the
then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the Notes then outstanding do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
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SECTION 6.7 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of, premium, if any, on, and interest
and Special Interest, if any, on, the Notes held by such Holder, on or after the
respective due dates expressed in the Notes or this Indenture (including in
connection with an offer to purchase), or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 6.8 Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, on, interest and Special Interest, if any,
remaining unpaid on, the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due to the Trustee under Section 7.7.
SECTION 6.9 Trustee May File Proofs of Claim.
The Trustee shall be entitled and empowered, without regard to
whether the Trustee or any Holder shall have made any demand or performed any
other act pursuant to the provisions of this Article and without regard to
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise, by intervention in any proceedings
relative to the Company or any Obligor upon the Notes, or to the creditors or
property or assets of the Company, any Guarantor or any other Obligor or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be entitled and empowered in such
instances:
(a) to file and prove a claim or claims for the whole amount of
principal (and premium, if any), interest, Special Interest, if any, and any
other amounts owing and unpaid in respect of the Notes, and to file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including all amounts owing to the Trustee and each predecessor
Trustee pursuant to Section 7.7 hereof) and of the Holders allowed in any
judicial proceedings relative to the Company or other obligor upon the Notes, or
to the creditors or property of the Company, any Guarantor, or any such other
Obligor,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of the Notes in any election of a trustee or a standby
trustee in arrangement, reorganization, liquidation or other bankruptcy or
insolvency proceedings or Person performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or other Property or assets
payable or deliverable on any such claims, and to distribute all amounts
received with respect to the claims of the Holders and of the Trustee on their
behalf; and any trustee, receiver, or liquidator, custodian or
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other similar official is hereby authorized by each of the Holders to make
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of payments directly to the Holders, to pay to the Trustee such amounts
as shall be sufficient to cover all amounts owing to the Trustee and each
predecessor Trustee pursuant to Section 7.7 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Holder in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
person.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Notes, and it shall not be necessary to make any Holders of the
Notes parties to any such proceedings.
SECTION 6.10 Priorities.
If the Trustee collects any money or property pursuant to this
Article, it shall pay out the money or property in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.7 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, interest, and Special Interest, if any, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal (premium, if any), interest, and Special
Interest , if any, respectively; and
Third: to the Company or to the Guarantors or to such other party as
a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders of Notes pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Holder and the Trustee a notice that
states the record date, the payment date and amount to be paid. The Trustee may
mail such notice in the name and at the expense of the Company.
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SECTION 6.11 Undertaking For Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.7 hereof, or a suit by Holders of more than 10% in
aggregate principal amount of the then outstanding Notes.
SECTION 6.12 Restoration of Rights and Remedies.
If the Trustee or any Holder of Notes has instituted any proceeding
to enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, the
Guarantors, the Trustee and the Holders shall, subject to any determination in
such proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding has been instituted.
SECTION 6.13 Rights and Remedies Cumulative.
Except as otherwise provided in Section 2.7 hereof, no right or
remedy conferred herein, upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.14 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article 6 or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
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ARTICLE 7.
TRUSTEE
SECTION 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts;
and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its
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rights and powers under this Indenture at the request of any Holders, unless
such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the Trust
Indenture Act.
SECTION 7.2 Rights of Trustee.
(a) Subject to the provisions of Section 7.1(a) hereof, the Trustee
may rely upon any document believed by it to be genuine and to have been signed
or presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel with
respect to legal matters relating to this Indenture and the Notes shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or agent
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture; provided, however, that the
Trustee's conduct does not constitute willful misconduct or negligence.
(e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
security or indemnity reasonable to it against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(f) Except with respect to Section 4.1 hereof, the Trustee shall
have no duty to inquire as to the performance of the Company's covenants in
Article 4 hereof. In addition, the Trustee shall not be deemed to have knowledge
of any Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 6.1(a) (except that the Trustee shall not be deemed to have
knowledge of a default in the payment of Special Interest) or 6.1(b), or (ii)
any Default or Event of Default of which a Responsible Officer of the Trustee
shall have received written notification or obtained actual knowledge; provided
that the Trustee shall comply with the "automatic stay" provisions contained in
U.S. bankruptcy laws, if applicable. As used herein, the
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term "actual knowledge" means the actual fact or statement of knowing, without
any duty to make any investigation with regard thereto.
(g) Prior to the occurrence of an Event of Default hereunder and
after the curing and waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document unless requested in writing to do so by
the Holders of not less than a majority in aggregate principal amount of the
Notes then outstanding; provided that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable expenses of
every such examination shall be paid by the Company or, if advanced by the
Trustee, shall be repaid by the Company upon demand. The Trustee shall not be
bound to ascertain or inquire as to the performance or observance of any
covenants, conditions, or agreements on the part of the Company, except as
otherwise set forth herein, but the Trustee may, in its discretion, make such
further inquiry or investigation into such facts or matters as it may see fit
and if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company personally or by agent or attorney.
(h) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty.
SECTION 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as defined in the Trust Indenture Act) it must eliminate such conflict
within 90 days, apply to the Commission for permission to continue as Trustee or
resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.4 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, any Guarantee or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
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SECTION 7.5 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium, if
any, or interest on any Note (including payments pursuant to the mandatory
repurchase provisions of such Notes, if any), the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
SECTION 7.6 Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b). The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee whenever the Notes become
listed on any stock exchange and of any delisting thereof.
SECTION 7.7 Compensation and Indemnity.
The Company shall pay to the Trustee promptly from time to time such
compensation for its acceptance of this Indenture and services hereunder as
agreed to by the parties from time to time. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it, including the costs
of collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses (including reasonable attorneys' fees) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.7) and defending itself
against or investigating any claim (whether asserted by the Company or any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad
faith. The Trustee shall notify the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
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The obligations of the Company under this Section 7.7 shall survive
the resignation or removal of the Trustee and the satisfaction and discharge of
this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or Property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall be a Permitted Lien and survive
the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Sections 6.1(g) or 6.1(h) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any applicable bankruptcy laws.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
SECTION 7.8 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. If at any time:
(a) the Trustee shall fail to comply with Section 310(b) of the
Trust Indenture Act after written request thereof by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six months,
unless the Trustee's duty to resign is stayed in accordance with the
provisions of TIA Section 310(b); or
(b) the Trustee shall cease to be eligible under Section 7.10 hereof
and shall fail to resign after written request therefor by the Company or
by any Holder; or
(c) the Trustee shall become incapable of acting or a decree or
order for relief by a court having jurisdiction in the premises shall have
been entered in respect of the Trustee in an involuntary case under the
U.S. bankruptcy laws, as now or hereinafter constituted, or a decree or
order by a court having jurisdiction in the premises shall have been
entered for the appointment of a receiver, custodian, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Trustee
or of its Property and assets or affairs, or any public officer shall take
charge or control of the Trustee or of its Property and assets or affairs
for the purpose of rehabilitation, conservation, winding-up or
liquidation; or
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(d) the Trustee shall commence a voluntary case under the U.S.
bankruptcy laws, as now or hereafter constituted, or shall consent to the
appointment of or taking possession by a receiver, custodian, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Trustee
or of its Property and assets or affairs, or shall make an assignment for
the benefit of creditors, or shall admit in writing its inability to pay
its debts generally as they become due, or shall take corporate action in
furtherance of any such action; or
(e) the Trustee becomes incapable of acting,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to the Notes, or (ii) subject to Section 6.11 hereof, any
Holder who has been a bona fide Holder of a Note for at least six months may, on
behalf of such Holder and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee for the Securities.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee notifies the Company of its resignation is removed, the
retiring Trustee, the Company, or the Holders of Notes of at least 10% in
principal amount of the then outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all Property held by it as Trustee to the successor Trustee, provided that all
sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.7 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.8, the Company's obligations under Section 7.7 hereof
shall continue for the benefit of the retiring Trustee.
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SECTION 7.9 Successor Trustee by Merger, Etc.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificate
of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has (or its ultimate parent has) combined
capital and surplus of at least $100,000,000 as set forth in its most recent
published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall comply
with TIA Section 310(b); provided, however, that there shall be excluded from
the operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met.
SECTION 7.11 Preferential Collection of Claims Against the Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8.
SATISFACTION AND DISCHARGE
SECTION 8.1 Satisfaction and Discharge.
This Indenture shall upon the request of the Company cease to be of
further effect (except as to surviving rights of registration of transfer,
substitution or exchange of Notes herein expressly provided for, the Company's
obligations under Sections 7.7 and 8.4 hereof, the Company's rights of optional
redemption under Article 3 hereof, the rights, obligations and the
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immunities of the Trustee under Article 7 and the Company's, the Trustee's and
the Paying Agent's obligations under Section 8.3 hereof) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture when:
(a) either
(i) all outstanding Notes have been delivered to the Trustee
for cancellation, or
(ii) all such Notes not therefore delivered to the Trustee for
cancellation have become due and payable, will become due and payable
within one year or are to be called for redemption within one year under
irrevocable arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name and at the expense of the
Company, and the Company has irrevocably deposited or caused to be
deposited with the Trustee funds in an amount sufficient to pay and
discharge the entire indebtedness on the Notes not theretofore delivered
to the Trustee for cancellation, for principal of (premium, if any, on)
and interest (including Special Interest, if any) to the date of deposit
or Maturity or date of redemption;
(b) the Company has paid or caused to be paid all sums then due and
payable by the Company under this Indenture; and
(c) the Company has delivered an Officers' Certificate and an
Opinion of Counsel relating to compliance with the conditions set forth in this
Indenture.
Notwithstanding the satisfaction and discharge of this Indenture,
the Company's obligations in Sections 2.3, 2.4, 2.6, 2.7, 2.11, 2.13, 7.7, 7.8,
8.2, 8.3 and 8.4, and the Trustee's and Paying Agent's obligations in Section
8.3 shall survive until the Notes are no longer outstanding. Thereafter, only
the Company's obligations in Sections 7.7, 8.3 and 8.4 and the Trustee's and
Paying Agent's obligations in Section 8.3 shall survive.
In order to have money available on a payment date to pay principal
(and premium, if any, on) or interest (and Special Interest, if any) on the
Notes, the U.S. Government Obligations shall be payable as to principal (and
premium, if any) or interest (and Special Interest, if any) at least one
Business Day before such payment date in such amounts as will provide the
necessary money. U.S. Government Obligations shall not be callable at the
issuer's option.
SECTION 8.2 Application of Trust Money.
All money deposited with the Trustee pursuant to Section 8.1 shall
be held in trust and, at the written direction of the Company, be invested prior
to maturity in non-callable U.S. Government Obligations, and applied by the
Trustee in accordance with the provisions of the Notes and this Indenture, to
the payment, either directly or through any Paying Agent as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest (and Special Interest, if any) for the payment of which money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
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SECTION 8.3 Repayment of the Company.
The Trustee and the Paying Agent shall promptly pay to the Company
upon written request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon
written request any money held by them for the payment of principal or interest
that remains unclaimed for two years after the date upon which such payment
shall have become due; provided that the Company shall have either caused notice
of such payment to be failed to each Holder of the Notes entitled thereto no
less than 30 days prior to such repayment or within such period shall have
published such notice in a financial newspaper of widespread circulation
published in The City of New York, including, without limitation, The Wall
Street Journal (national edition). After payment to the Company, Holders
entitled to the money must look only to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person,
and all liability and responsibility of the Trustee and such Paying Agent with
respect to such money shall cease.
SECTION 8.4 Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.1 by reason of any legal
proceeding or by reason of any order or judgment of any court of governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and Guarantors' obligations under this Indenture, the Notes and the
Guarantees shall be revived and reinstated as though no deposit has occurred
pursuant to Section 8.1 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with Section 8.2; provided, however, that if the Company or the Guarantors have
made any payment of interest on or principal of any Notes because of the
reinstatement of their Obligations, the Company or such Guarantors shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.
ARTICLE 9.
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 9.1 Option to Effect Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced
by a Board Resolution, at any time, elect to have either Section 9.2 or 9.3
hereof be applied to all outstanding Notes upon compliance with the conditions
set forth below in this Article 9.
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SECTION 9.2 Defeasance and Discharge.
Upon the Company's exercise under Section 9.1 hereof of the option
applicable to this Section 9.2, the Company and the Guarantors shall, subject to
the satisfaction of the conditions set forth in Section 9.4 hereof, be deemed to
have been discharged from their respective obligations with respect to all
outstanding Notes, this Indenture and the Guarantees on the date the conditions
set forth below are satisfied (hereinafter, "Defeasance"). For this purpose,
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes and the Company and
the Guarantors shall be deemed to have satisfied all of their obligations under
such Notes, this Indenture and the Guarantees (and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same),
subject to the following which shall survive until otherwise terminated or
discharged hereunder:
(a) the rights of Holders of such Notes to receive, solely from the
trust fund described in Section 9.4 hereof and as more fully set forth in
Section 9.4, payments in respect of the principal and of and any premium and
interest (including Special Interest, if any), on such Notes when payments are
due,
(b) the Company's obligations with respect to such Notes under
Sections 2.6, 2.8, 2.10, and 4.2 hereof,
(c) the rights, powers, trusts, duties and immunities of the Trustee
under this Indenture,
(d) Article 3 hereof, and
(e) this Article 9.
Subject to compliance with this Article 9, the Company may exercise its option
under this Section 9.2 notwithstanding the prior exercise of its option under
Section 9.3 hereof.
SECTION 9.3 Covenant Defeasance.
Upon the Company's exercise under Section 9.1 hereof of the option
applicable to this Section 9.3, (i) the Company and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 9.4 hereof,
be released from its obligations under the covenants contained in Sections 4.4,
4.6, 4.7, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and
4.20 and Section 5.1(iv) hereof and any covenant added to this Indenture
subsequent to the Issue Date pursuant to Section 10.1 hereof with respect to the
outstanding Notes and (ii) the occurrence of any event specified in Section
6.1(c) or 6.1(d) hereof, with respect to any of Sections 4.4, 4.6, 4.7, 4.9,
4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20 and Section
5.1(iv) hereof, and any covenant added to this Indenture subsequent to the Issue
Date pursuant to Section 10.1 hereof, shall be deemed not to be or result in an
Event of Default, in each case with respect to such Notes as provided in this
Section 9.3 on and after the date on which the conditions set forth in Section
9.4 hereof are satisfied, and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other
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purposes hereunder (it being understood that such Notes shall not be deemed
outstanding for accounting purposes). For this purpose, "Covenant Defeasance"
means that, with respect to the outstanding Notes, the Company and the
Guarantors may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant (to the extent so
specified in the case of Section 6.1(c) or 6.1(d) hereof), whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.1 hereof, but, except as specified above,
the remainder of this Indenture, the Guarantees and the Notes shall be
unaffected thereby.
SECTION 9.4 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 9.2 or 9.3 hereof to the outstanding Notes:
In order to exercise either Defeasance or Covenant Defeasance:
(a) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to the benefits of the Holders of such Notes, (i) money in an amount, or (ii)
U.S. Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one Business Day before the due date of any payment, money in an
amount, or (iii) a combination thereof, in each case sufficient, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge the
principal of (premium, if any, on) and any installment of interest on and
Special Interest, if any, on the Notes at the Maturity thereof or Redemption
Date therefor in accordance with the terms of this Indenture and the Notes.
(b) in the case of an election under Section 9.2 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel confirming that (A)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Indenture, there has been
a change in the applicable U.S. federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that, the
Holders of the outstanding Notes will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such Defeasance and will be
subject to U.S. federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Defeasance had not
occurred;
(c) in the case of an election under Section 9.3 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such Covenant Defeasance and
will be subject to U.S. federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
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(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Notes pursuant to this Article 9
concurrently with such incurrence) or insofar as Sections 6.1(g) or 6.1(h)
hereof is concerned, shall have occurred at any time on or prior to the 91st day
after the date of such deposit and be continuing on such 91st day (it being
understood that this condition shall not be deemed satisfied until after such
91st day);
(e) such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming for the purpose of this clause (f) that all Notes are in default
within the meaning of such Act);
(g) such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act of 1940, as amended, unless such trust
shall be registered under such Act or exempt from registration thereunder;
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that on the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(i) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(j) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Defeasance or the Covenant Defeasance
have been complied with.
SECTION 9.5 Deposited Money and U.S. Government Obligations To Be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 9.6 hereof, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 9.5, the
"Trustee") pursuant to Section 9.4 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any such Paying Agent
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as the Trustee may determine, to the Holders of such Notes of all sums due and
to become due thereon in respect of principal, premium, if any, and interest
(including Special Interest, if any), but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or U.S. Government
Obligations deposited pursuant to Section 9.4 hereof or the principal and
interest received in respect thereof.
Anything in this Article 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or U.S. Government Obligations held by it as provided
in Section 9.4 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
9.4(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Defeasance or Covenant Defeasance.
SECTION 9.6 Repayment to the Company.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, Special Interest, if any, or interest on any Note and remaining unclaimed
for two years after such principal, and premium, if any Special Interest, if
any, or interest has become due and payable shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as a creditor, look only to the
Company for payment thereof, and all liability and responsibility of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in The New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
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SECTION 9.7 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 9.2 or 9.3
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's Obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 9.2 or 9.3 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 9.2 or 9.3 hereof,
as the case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, interest, Special Interest, if any, on any Note
following the reinstatement of its Obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
ARTICLE 10.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 10.1 Without Consent of Holders of Notes.
Notwithstanding Section 9.2 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
without the consent of any Holder of a Note:
(a) to evidence the succession of another Person to the Company and
the Guarantors and the assumption by such successor of the covenants and
Obligations of the Company under this Indenture and contained in the Notes and
of the Guarantors contained in this Indenture and the Guarantees,
(b) to add to the covenants of the Company, for the benefit of
Holders, or to surrender any right or power conferred upon the Company or the
Guarantors by this Indenture,
(c) to add any additional Events of Default,
(d) to provide for uncertificated Notes in addition to or in place
of Certificated Notes,
(e) to evidence and provide for the acceptance of appointment under
this Indenture by the successor Trustee,
(f) to secure the Notes and/or the Guarantees,
(g) to cure any ambiguity, to correct or supplement any provision in
this Indenture which may be inconsistent with any other provision herein or to
add any other provisions
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with respect to matters or questions arising under this Indenture, provided that
such actions will not adversely affect the interests of Holders in any material
respect,
(h) to add or release any Guarantor pursuant to the terms of this
Indenture, or
(i) to comply with the requirements of the Commission to effect or
maintain the qualification of the Indenture under the Trust Indenture Act.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon receipt by the Trustee of the documents described in Section 10.7 hereof,
the Trustee shall join with the Company in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 10.2 With Consent of Holders of Notes.
Except as provided below in this Section 10.2, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture and the Notes
may be amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding (including
consents obtained in connection with a tender offer or exchange offer for the
Notes), and, subject to Sections 6.4 and 6.7 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or, interest on, or Special Interest, if any, on,
the Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture or the Notes may
be waived with the consent of the Holders of a majority in aggregate principal
amount of the then outstanding Notes (including consents obtained in connection
with a tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of
the documents described in Section 10.7 hereof, the Trustee shall join with the
Company and the Guarantors in the execution of such amended or supplemental
Indenture unless such amended or supplemental Indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 10.2 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
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After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.4 and 6.7 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected, an
amendment or waiver may not (with respect to any Notes held by a non-consenting
Holder):
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount thereof (or
premium, if any), or the interest thereon that would be due and payable upon
Maturity thereof, or change the place of payment where, or the coin or currency
in which, any Note or any premium or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof;
(b) reduce the percentage in principal amount at Stated Maturity of
the outstanding Notes, the consent of whose Holders is necessary for any such
supplemental indenture or required for any waiver of compliance with certain
provisions of this Indenture, or certain Defaults thereunder;
(c) modify the Obligations of the Company to make offers to purchase
Notes upon a Change of Control or from the proceeds of Asset Sales;
(d) subordinate in right of payment, or otherwise subordinate, the
Notes or the Guarantees to any other Indebtedness;
(e) amend, supplement or otherwise modify the provisions of this
Indenture relating to Guarantees or
(f) make any change in Sections 6.4 or 6.7 or modify any of the
provisions of this Section 10.2 (except to increase any percentage set forth
therein or herein).
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of
the documents described in Section 10.7 hereof, the Trustee shall join with the
Company in the execution of such amended or supplemental Indenture unless such
amended or supplemental Indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
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It shall not be necessary for the consent of the Holders of Notes
under this Section 10.2 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
SECTION 10.3 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article
10, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby. After a supplemental indenture becomes
effective, the Company shall mail to Holders a notice briefly describing such
amendment. The failure to give such notice to all Holders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 10.4 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall
be set forth in an amended or supplemental Indenture that complies with the
Trust Indenture Act as then in effect.
SECTION 10.5 Revocation and Effect of Consents.
(a) Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
(b) The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to give their consent
or take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding subsection, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
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SECTION 10.6 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 10.7 Trustee to Sign Supplemental Indentures.
The Trustee shall sign any supplemental Indenture authorized
pursuant to this Article 10 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. Neither the
Company nor a Guarantor may sign a supplemental Indenture until the Board of
Directors of such Person approves it. In executing any supplemental indenture,
the Trustee shall be entitled to receive indemnity reasonably satisfactory to it
and to receive and (subject to Section 7.1) shall be fully protected in relying
upon, in addition to the documents required by Section 11.4, an Officers'
Certificate and an Opinion of Counsel stating that:
(a) such supplemental indenture is authorized or permitted by this
Indenture and that all conditions precedent to the execution, delivery and
performance of such supplemental indenture have been satisfied;
(b) the Company and the Guarantors have all necessary corporate
power and authority to execute and deliver the supplemental indenture and that
the execution, delivery and performance of such supplemental indenture has been
duly authorized by all necessary corporate action of the Company and the
Guarantors;
(c) the execution, delivery and performance of the supplemental
indenture do not conflict with, or result in the breach of or constitute a
default under any of the terms, conditions or provisions of (i) this Indenture,
(ii) the charter documents and by-laws of the Company or any Guarantor, or (iii)
any material agreement or instrument to which the Company or any Guarantor is
subject and of which such counsel is aware;
(d) to the knowledge of legal counsel writing such Opinion of
Counsel, the execution, delivery and performance of the supplemental indenture
do not conflict with, or result in the breach of any of the terms, conditions or
provisions of (i) any law or regulation applicable to the Company or any
Guarantor, or (ii) any material order, writ, injunction or decree of any court
or governmental instrumentality applicable to the Company or any Guarantor;
(e) such supplemental indenture has been duly and validly executed
and delivered by the Company and the Guarantors, and this Indenture together
with such supplemental
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indenture constitutes a legal, valid and binding obligations of the Company and
the Guarantors enforceable against the Company and the Guarantors, as
applicable, in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles (whether considered
in a proceeding at law or in equity); and
(f) this Indenture together with such amendment or supplement
complies with the Trust Indenture Act.
SECTION 10.8 Payment for Consent.
Neither the Company nor any Affiliate of the Company shall, directly
or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Notes unless such consideration is offered to be paid to all Holders that
so consent, waive or agree to amend in the time frame set forth in solicitation
documents relating to such consent, waiver or agreement.
ARTICLE 11.
MISCELLANEOUS
SECTION 11.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by, or with another provision included in this Indenture
by operation of Sections 310 to 318, inclusive, of the Trust Indenture Act, such
imposed duties or incorporated provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that can
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or excluded, as the case may be.
SECTION 11.2 Notices.
Any notice or communication by the Company, the Guarantors or the
Trustee to the others is duly given if in writing and delivered in person or
mailed by first class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
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If to the Company or any Guarantor:
Schuff Steel Company
420 South 19th Avenue
Phoenix, Arizona 85069
Attention: Kenneth F. Zylstra
Telephone No.: (602) 251-0313
Telecopier No.: (602) 452-4465
If to the Trustee:
Harris Trust Company of California
601 South Figueroa St., Suite 4900
Los Angeles, California 90017
Attention: Corporate Trust Department
Telephone No.: (213) 239-0677
Telecopier No.: (213) 239-0631
The Company, the Guarantors, or the Trustee, by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the
Securities Register kept by the Registrar and shall be given if so sent within
the time prescribed. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the Trust
Indenture Act. Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it; a notice or communication, however, shall not be effective unless,
in the case of the Company, the Guarantors or the Trustee, actually received.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give notice by mail to
Holders, then such notification as shall
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be made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.
SECTION 11.3 Communication By Holders of Notes With Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Guarantors, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 11.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company, upon request, shall furnish
to the Trustee, to the extent required by this Indenture or the Trust Indenture
Act:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.5 hereof) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.5 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer of the Company or any
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such Officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, and may state that it is so based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations
by, an Officer or Officers of the Company or such Guarantor stating that the
information with respect to such factual matters is in the possession of the
Company or such Guarantor, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate of opinion or representations
with respect to such matters are erroneous.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 11.5 Statements Required in a Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the Persons making such certificate or opinion
have read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Persons, they have made
such examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such
Persons, such condition or covenant has been satisfied.
SECTION 11.6 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by a
specified percentage of Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such specified percentage
of Holders in person or by agents duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are received by the Trustee and, where it is
hereby expressly required, by the Company and the Guarantors. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Sections 7.1 and 7.2) conclusive in favor of the Trustee, the
Company and the Guarantors, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate
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or affidavit shall also constitute sufficient proof of authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient, including the execution of such instrument or writing
without more.
(c) The ownership, principal amount and serial numbers of Notes held
by any Person, and the date of holding the same, shall be proved by the
Securities Register.
(d) If the Company shall solicit from the Holders of Notes any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Such record date shall be the
record date specified in or pursuant to such Board Resolution, which shall be a
date not earlier than the date 30 days prior to the first solicitation is
completed. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of outstanding Notes have authorized
or agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the outstanding Notes
shall be computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become pursuant to the provisions of this Indenture
not later than eleven months after the record date.
(e) Except to the extent otherwise expressly provided in this
Indenture, any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action with regard to any particular Note may do so with regard
to all or any part of the principal amount of such Note or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any different part of such principal amount.
SECTION 11.7 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions; provided that no such rule shall
conflict with the terms of this Indenture or the Trust Indenture Act.
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SECTION 11.8 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or the Guarantors under the Notes, this Indenture, the Guarantees
or for any claim based on, in respect of, or by reason of, such Obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
SECTION 11.9 Governing Law.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS INDENTURE AND THE NOTES, WITHOUT REGARD TO THE CONFLICTS OF
LAWS PRINCIPLES THEREOF.
SECTION 11.10 Agent for Service; Submission to Jurisdiction; Waiver of
Immunities.
By the execution and delivery of this Indenture or any amendment or
supplement hereto, each of the Company and the Guarantors (i) acknowledges that
it has, by separate written instrument, designated and appointed CT Corporation
System (the "Process Agent") currently located at 1633 Broadway, New York, New
York 10019, as its authorized agent upon which process may be served in any
suit, action or proceeding with respect to, arising out of, or relating to, this
Indenture, the Guarantees, or the Notes or brought under U.S. federal or state
securities laws, may be instituted in any U.S. federal or state court located in
The City of New York, New York, and acknowledges that the Process Agent has
accepted such designation, (ii) irrevocably submits to the jurisdiction of any
such court in any such suit, action or proceeding and irrevocably waives, to the
fullest extent that it may effectively and lawfully do so, any obligation to the
laying of venue of any such suit, action or proceeding and the defense of an
inconvenient forum to the maintenance of any such suit action or proceeding in
such court, and (iii) agrees that service of process upon the Process Agent
shall be deemed in every respect effective service of process upon the Company
in any such suit, action or proceeding. The Company and the Guarantors further
agrees to take any and all action, including the execution and filing of any and
all such documents and instruments as may be necessary to continue such
designation and appointment of the Process Agent in full force and effect so
long as this Indenture shall be in full force and effect; provided that the
Company may and shall (to the extent the Process Agent ceases to be able to be
served on the basis contemplated herein), by written notice to the Trustee,
designate such additional or alternative agents for service of process under
this Section 11.10 that (i) maintains an office located in the Borough of
Manhattan, The City of New York in the State of New York, (ii) are either (a)
counsel for the Company or (b) a corporate service company which acts as agent
for service of process for other persons in the ordinary course of its business
and for other persons in the ordinary course of its business and (iii) agrees to
act as agent for service of process in accordance with this Section 11.10. Such
notice shall identify the name of such agent for process and the address of such
agent for process in the Borough of Manhattan, The City of New York, State of
New York. Upon the request of any Holder of a Note, the Trustee shall deliver
such information to such Holder. Notwithstanding
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the foregoing, there shall, at all times, be at least one agent for service of
process for the Company and each Guarantor appointed and acting in accordance
with this Section 11.10.
To the extent that the Company or any Guarantor has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether through service of notice, attachment prior to judgment, attachment in
aid of execution, execution or otherwise) with respect to itself or its
property, each of the Company and the Guarantors hereby irrevocably waives such
immunity in respect of its Obligations under this Indenture, the Guarantees and
the Notes, to the extent permitted by law.
SECTION 11.11 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company, the Guarantors or the Company's
Subsidiaries or of any other Person. Any such indenture, loan or debt agreement
may not be used to interpret this Indenture.
SECTION 11.12 Successors.
All agreements of the Company and the Guarantors in this Indenture,
the Notes and the Guarantors shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.13 Severability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.14 Counterpart Originals.
The parties may sign any number of copies of this Indenture and by
the parties thereto in separate counterparts. Each of which when signed shall be
deemed to be an original, but all of them together represent the same agreement.
SECTION 11.15 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
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ARTICLE 12.
GUARANTEES
SECTION 12.1 Guarantors.
(a) For good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each of the Guarantors, together with each
Subsidiary of the Company which in accordance with Sections 4.18 and 12.8(a)
hereof is required in the future to guarantee the Obligations of the Company and
the Guarantors under the Notes, the Guarantees and this Indenture upon execution
of a supplemental indenture, hereby jointly and severally and irrevocably and
unconditionally guarantees to the Trustee and to each Holder irrespective of the
validity or enforceability of this Indenture or the Notes or the Obligations of
the Company and the Guarantors under this Indenture, that: (i) the principal of,
premium, if any, any interest, and Special Interest, if any, on the Notes
(including, without limitation, any interest that accrues after the filing of a
proceeding of the type described in Sections 6.1(g) and (h)) and any fees,
expenses and other amounts owing under this Indenture will be duly and
punctually paid in full when due, whether at Maturity, by acceleration, call for
redemption, upon a Change of Control Offer, Asset Sale Offer, purchase or
otherwise, and interest on the overdue principal and (to the extent permitted by
law) interest, if any, on the Notes and any other amounts due in respect of the
Notes, and all other Obligations of the Company and the Guarantors, to the
Holders of the Notes under this Indenture, the Notes and the Guarantees, whether
now or hereafter existing, will be promptly paid in full or performed, all
strictly in accordance with the terms hereof and of the Notes; and (ii) in case
of any extension of time of payment or renewal of any Notes or any of such other
Obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Maturity, by
acceleration, call for redemption, upon Change of Control Offer, Asset Sale
Offer, purchase or otherwise. If payment is not made when due of any amount so
guaranteed for whatever reason, each Guarantor shall be jointly and severally
obligated to pay the same individually whether or not such failure to pay has
become an Event of Default which could cause acceleration pursuant to Section
6.2. Each Guarantor agrees that this is a guarantee of payment and not a
guarantee of collection. An Event of Default under this Indenture of the Notes
shall constitute an Event of Default under each Guarantee, and shall entitle the
Holders to accelerate the Obligations of each Guarantor hereunder in the same
manner and to the same extent as the Obligations of the Company. Each Guarantee
is intended to be superior to or pari passu in right of payment with all
Indebtedness of the Guarantors and each Guarantor's Obligations are independent
of any Obligation of the Company or any other Guarantor.
(b) Each Guarantor waives presentation to, demand of, payment from
and protest to the Company of any of the Obligations under this Indenture or the
Notes and also waives notice of protest for nonpayment. Each Guarantor waives
notice of any default under the Notes or the Obligations. The Obligations of
each Guarantor hereunder shall not be affected by (i) the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person under this Indenture, the Notes or any
other agreement or otherwise; (ii) any extension or renewal of any thereof;
(iii) any rescission, waiver, amendment or
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modification of any of the terms or provisions of this Indenture, the Notes or
any other agreement; (iv) the release of any security held by any Holder or the
Trustee for the Obligations or any of them; (v) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of the
Obligations; or (f) any change in the ownership of such Guarantor.
(c) The Obligations of each Guarantor hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations of the Company or otherwise. Without
limiting the generality of the foregoing, the Obligations of each Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Notes or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations of the Company, or by any other
act or thing or omission or delay to do any other act or thing which may or
might in any manner or to any extent vary the risk of such Guarantor or would
otherwise operate as a discharge of such Guarantor as a matter of law or equity.
(d) Each Guarantor further agrees that its Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of, premium, if any, on or interest
(or Special Interest, if any) on any Obligation of the Company is rescinded or
must otherwise be restored by any Holder or the Trustee upon the bankruptcy or
reorganization of the Company or otherwise.
(e) In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of, premium, if any, on or interest (or Special Interest, if any) on any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, by redemption or otherwise, or to perform or comply with any other
Obligation, each Guarantor hereby promises to and will, upon receipt of written
demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the
Holders or the Trustee an amount equal to the sum of (i) the unpaid amount of
such Obligations, (ii) accrued and unpaid interest on such Obligations (but only
to the extent not prohibited by law) and (iii) all other monetary Obligations of
the Company to the Holders and the Trustee.
(f) Until such time as the Notes and the other Obligations of the
Company guaranteed hereby have been satisfied in full, each Guarantor hereby
irrevocably waives any claim or other rights that it may now or hereafter
acquire against the Company or any other Guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor's Obligations
under each Guarantee, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Holders or the Trustee against the
Company or any other Guarantor or any security, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive from the Company or
any other Guarantor, directly
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or indirectly, in cash or other Property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right. If any amount
shall be paid to such Guarantor in violation of the preceding sentence at any
time prior to the later of the payments in full of the Notes and all other
amounts payable under this Indenture, each Guarantee and the Maturity of the
Notes, such amount shall be held in trust for the benefit of the Holders and the
Trustee and shall forthwith be paid to the Trustee to be credited and applied to
the Notes and all other amounts payable under each Guarantee, whether matured or
unmatured, in accordance with the terms of this Indenture, or to be held as
security for any Obligations or other amounts payable under any Guarantee
thereafter arising.
(g) Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this Indenture
and that the waiver set forth in this Section 12.1 is knowingly made in
contemplation of such benefits. Each Guarantor further agrees that, as between
it, on the one hand, and the Holders and the Trustee, on the other hand, (x)
subject to this Article 12, the maturity of the Obligations guaranteed hereby
may be accelerated as provided in Article 6 for the purposes of each Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any acceleration of such Obligations guaranteed hereby as provided in
Article 6, such Obligations (whether or not due and payable) shall further then
become due and payable by the Guarantors for the purposes of each Guarantee.
(h) A Guarantor that makes a distribution or payment under a
Guarantee shall be entitled to contribution from each other Guarantor in a pro
rata amount based on the Adjusted Net Assets of each such other Guarantor for
all payments, damages and expenses incurred by that Guarantor in discharging the
Company's obligations with respect to the Notes and this Indenture or any other
Guarantor with respect to its Guarantee, so long as the exercise of such right
does not impair the rights of the Holders of the Notes under the Guarantees.
(i) Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any Holder in
enforcing any rights under this Section.
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SECTION 12.2 Limitation on Liability.
The Obligations of each Guarantor will be limited to the maximum
amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect of the
Obligations of such other Guarantor under its Guarantee or pursuant to its
contribution obligations under this Indenture, result in the Obligations of such
Guarantor under its Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under federal or state law or otherwise not being void,
voidable or unenforceable under any bankruptcy, reorganization, receivership,
insolvency, liquidation or other similar legislation or legal principles under
any applicable foreign law. Each Guarantor that makes a payment or distribution
under a Guarantee shall be entitled to a contribution from each other Guarantor
in a pro rata amount based on the Adjusted Net Assets of each Guarantor.
SECTION 12.3 Execution and Delivery of Guarantees.
To further evidence its Guarantee set forth in Section 12.1 hereof,
each Guarantor hereby agrees that notation of such Guarantee shall be endorsed
on each Note authenticated and delivered by the Trustee and executed by either
manual or facsimile signature of an authorized officer of such Guarantor. Each
Guarantor hereby agrees that its Guarantee set forth in Section 12.1 hereof
shall remain in full force and effect notwithstanding any failure to endorse on
each Note a notation of such Guarantee. If an officer of a Guarantor whose
signature is on this Indenture or a Note no longer holds that office at the time
the Trustee authenticates such Note or at any time thereafter, such Guarantor's
guarantee of such Senior Note shall be valid nevertheless. The delivery of any
Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of any Guarantee set forth in this Indenture on behalf
of the Guarantor.
SECTION 12.4 When A Guarantor May Merge, Etc.
Each Guarantor may consolidate with or merge into or sell or
otherwise dispose of all or substantially all of its Property and assets to the
Company or another Guarantor without limitation, except to the extent any such
transaction is subject to Section 5.1 hereof. Each Guarantor may consolidate
with or merge into or sell all or substantially all of its Property and assets
to a Person other than the Company or another Guarantor (whether or not
Affiliated with the Guarantor), provided that (a) if the surviving Person is not
the Guarantor, the surviving Person agrees to assume such Guarantor's Guarantee
and all its Obligations pursuant to this Indenture (except to the extent the
provisions of Section 12.7(a) would result in the release of such Guarantee) and
(b) such transaction does not (i) violate any of the covenants described in
Article 4 hereof or (ii) result in a Default or Event of Default being in
existence or continuing immediately thereafter.
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SECTION 12.5 No Waiver.
Neither a failure nor a delay on the part of either the Trustee or
the Holders in exercising any right, power or privilege under this Article 12
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any right, power or privilege.
The rights, remedies and benefits of the Trustee and the Holders herein
expressly specified are cumulative and not exclusive of any other rights,
remedies or benefits which either may have under this Article 12 at law, in
equity, by statute or otherwise.
SECTION 12.6 Modification.
No modification, amendment or waiver of any provision of this
Article 12, nor the consent to any departure by any Guarantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Trustee, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other or further
notice or demand in the same, similar or other circumstances.
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SECTION 12.7 Release of Guarantor.
(a) Upon the sale or other disposition (by merger or otherwise) of a
Guarantor (or all or substantially all of its Property and assets) to a Person
other than the Company or another Guarantor and pursuant to a transaction that
is otherwise in compliance with this Indenture (including as described in clause
(b) of Section 12.4 and as described in Section 4.15 hereof), such Guarantor
(unless it otherwise remains a Subsidiary) shall be deemed released from its
Guarantee and the related Obligations set forth in this Indenture; provided that
any such termination shall occur only to the extent that all Obligations of such
Guarantor under all of its guarantees of and under all of its pledges of assets
or other security interests which secure, other Indebtedness of the Company or
any other Subsidiary shall also terminate or be released upon such sale or other
disposition. Each Guarantor that is designated as an Unrestricted Subsidiary in
accordance with this Indenture shall be released from its Guarantee and the
related Obligations set forth in this Indenture so long as it remains an
Unrestricted Subsidiary.
(b) Any Guarantee by a Subsidiary (including an Initial Guarantor)
shall be automatically and unconditionally released and discharged, as evidenced
by a supplemental indenture executed by the Company, the Guarantors, if any, and
the Trustee, upon the release or discharge of the guarantee which resulted in
the creation of such Subsidiary's Guarantee and all other guarantees of the
Obligations of any Obligor on the Notes, except a discharge or release by, or as
a result of, payment under such guarantee.
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SECTION 12.8 Future Guarantors; Execution of Supplemental Indentures for Future
Guarantors.
(a) The Company may not permit any Subsidiary, directly or
indirectly, to guarantee any Indebtedness of the Company or any other Obligor
("Guaranteed Indebtedness") unless (i) such Subsidiary simultaneously executes
and delivers a supplemental indenture to this Indenture providing for a
Guarantee of payment of the Notes by such Subsidiary and (ii) such Subsidiary
waives and will not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any other
rights against the Company or any other Subsidiary as a result of any payment by
such Subsidiary under its Guarantee. If the Guaranteed Indebtedness is pari
passu with the Notes, then the guarantee of such Guaranteed Indebtedness shall
be pari passu with or subordinated to the Guarantee; and if the Guaranteed
Indebtedness is subordinated to the Notes, then the guarantee of such Guaranteed
Indebtedness shall be subordinated to the Guarantee at least to the extent that
all Guaranteed Indebtedness is subordinated to the Notes.
(b) Any Subsidiary that guarantees any Indebtedness of the Company
or another Obligor is required pursuant to Section 12.8(a) or 4.18 hereof to
become a Guarantor and the Company shall cause each such Subsidiary to promptly
execute and deliver to the Trustee a supplemental indenture pursuant to which
such Subsidiary shall become a Guarantor under this Article 12 and shall
guarantee the Obligations of the Company under the Notes and this Indenture.
Concurrently with the execution and delivery of such supplemental indenture, the
Company shall deliver to the Trustee an Opinion of Counsel to the effect that
such supplemental indenture has been duly authorized, executed and delivered by
such Subsidiary and that, subject to the application of bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance or transfer and other similar
laws relating to creditors' rights generally and to the principles of equity,
whether considered in a proceeding at law or in equity, the Guarantee of such
Guarantor is a legal, valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, and as to any
such other matters as the Trustee may reasonably request.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
SCHUFF STEEL COMPANY
By:__________________________________
Name:________________________________
Title:_______________________________
104
<PAGE> 111
HARRIS TRUST COMPANY OF
CALIFORNIA,
as Trustee
By:__________________________________
Name: John T. Deleray
Title: Assistant Vice President
ADDISON STRUCTURAL SERVICES,
INC.,
as Guarantor
By:__________________________________
Name:________________________________
Title:_______________________________
ADDISON STEEL, INC.,
as Guarantor
By:__________________________________
Name:________________________________
Title:_______________________________
QUINCY JOIST COMPANY,
as Guarantor
By:__________________________________
Name:________________________________
Title:_______________________________
105
<PAGE> 112
B & K STEEL FABRICATORS, INC.,
as Guarantor
By:__________________________________
Name:________________________________
Title:_______________________________
106
<PAGE> 113
SCHEDULE A
GUARANTORS
ADDISON STRUCTURAL SERVICES, INC.
ADDISON STEEL, INC.
QUINCY JOIST COMPANY
B & K STEEL FABRICATIONS, INC.
107
<PAGE> 114
(Face of Note) Exhibit A
[THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO ON
THE REVERSE THEREOF.
UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
SCHUFF STEEL COMPANY (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.6 OF THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.
THIS GLOBAL NOTE IS EXCHANGEABLE FOR A NOTE IN DEFINITIVE, FULLY REGISTERED
FORM, WITHOUT INTEREST COUPONS, IF (A) DTC NOTIFIES THE COMPANY THAT IT IS
UNWILLING OR UNABLE TO CONTINUE AS DEPOSITORY FOR THIS GLOBAL NOTE OR IF AT ANY
TIME DTC CEASES TO BE A "CLEARING AGENCY" REGISTERED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, AND A SUCCESSOR DEPOSITORY IS NOT APPOINTED BY
THE COMPANY WITHIN 90 DAYS OF SUCH NOTICE, (B) THE COMPANY EXECUTES AND DELIVERS
TO THE TRUSTEE A NOTICE THAT THIS GLOBAL NOTE SHALL BE SO TRANSFERABLE,
REGISTRABLE, AND EXCHANGEABLE, AND SUCH TRANSFER SHALL BE SO REGISTRABLE, OR (C)
AN EVENT OF DEFAULT (AS HEREINAFTER DEFINED HAS OCCURRED AND IS CONTINUING WITH
RESPECT TO THE NOTES.](1)
[THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
1
<PAGE> 115
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE HEREOF. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) (A "QIB"), OR (B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES
THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT,
(D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SENIOR NOTE OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO
THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING.)(1)
(1) This paragraph should be inserted upon the exchange of Initial Notes
for Exchange Notes in the Exchange Offer or upon the registration of Initial
Notes pursuant to the terms of the Registration Rights Agreement.
2
<PAGE> 116
10 1/2% Senior Notes due 2008
SCHUFF STEEL COMPANY
No.
CUSIP No.
$_____________________
SCHUFF STEEL COMPANY promises to pay to _______________________ or
registered assigns, the principal sum of ___________________ United States
Dollars, or such greater or lesser amount as may from time to time be endorsed
on Schedule A hereto on, June 1, 2008.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authorization hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit of this Indenture or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
as of the date written below.
3
<PAGE> 117
SCHUFF STEEL COMPANY
By:_____________________________
Name:___________________________
Title:__________________________
By:_____________________________
Name:___________________________
Title:__________________________
Dated:________
Certificate of Authentication:
This is one of the Notes
referred to in the within-mentioned
Indenture:
Harris Trust Company of California
as Trustee
By:_____________________________
Authorized Signatory
4
<PAGE> 118
(Reverse of Note)
10 1/2 Senior Notes due 2008
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Schuff Steel Company, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being called the "Company"), promises to pay interest on the
principal amount of this Note at 10 1/2% per annum until Maturity and shall pay
Special Interest, if any, payable pursuant to Section 5 of the Registration
Rights Agreement referred to below. The Company will pay interest, if any, and
Special Interest, if any, semi-annually in arrears on June 1 and December 1 of
each year (each, an "Interest Payment Date"), or if any such day is not a
Business Day, on the next succeeding Business Day. Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the Issue Date; provided that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a Record Date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
December 1, 1998. The Company shall pay interest (including post-petition
interest in any proceeding under any applicable Federal, State or foreign
bankruptcy law) on overdue installments of interest ("Defaulted Interest"), and
Special Interest, if any, if any, (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment. The Company will pay interest on the Notes
(except Defaulted Interest) and Special Interest, if any, to the Persons who are
registered Holders of Notes at the close of business on the May 15 or November
15 immediately preceding the Interest Payment Date (each, a "Record Date"), even
if such Notes are canceled after such Record Date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture with respect
to Defaulted Interest. The Notes will be payable as to principal, premium,
interest and Special Interest at the office or agency of the Company maintained
for such purpose within the City and State of New York, or, at the option of the
Company, payment of interest and Special Interest may be made by check mailed to
the Holders at their addresses set forth in the register of Holders, provided
that payment by wire transfer of immediately available funds will be required
with respect to principal of and interest, premium, if any, and Special
Interest, if any, on, all Global Notes and all other Notes the Holders of which
shall have provided wire transfer instructions to the Company and the Paying
Agent prior to the applicable Record Date for such payment. Such payment shall
be in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, the Trustee under the
Indenture will act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without
5
<PAGE> 119
notice to any Holder. In certain situations, the Company or any of its
Subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture
dated as of June 4, 1998 ("Indenture") between the Company, the Persons acting
as guarantors and named therein (the "Guarantors") and Harris Trust Company of
California, as trustee (the "Trustee," which term includes any successor trustee
under the Indenture). The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the U.S. Trust
Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb) as
in effect on the date of the Indenture. The Notes are subject to all such terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are unsecured obligations of the Company limited to
$100,000,000 in aggregate principal amount (subject to Section 2.7 of the
Indenture). This Note is one of the Notes referred to in the Indenture.
5. Optional Redemption. (a) Except as set forth in clause 5(b) of
this Note, the Notes shall not be redeemable at the Company's option prior to
June 1, 2003. On or after such date, the Notes shall be redeemable at the option
of the Company, in whole at any time or in part from time to time, at the
following prices (expressed in percentages of principal amount thereof) if
redeemed during the twelve-month period beginning June 1 of each of the years
indicated below, in each case together with interest (and Special Interest, if
any) accrued to the Redemption Date (subject to the right of Holders of record
on the relevant Record Date to receive interest (and Special Interest, if any),
due on the relevant Interest Payment Date):
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
2003............................................. 105.250 %
2004............................................. 103.938 %
2005............................................. 102.625 %
2006............................................. 101.313 %
2007 and thereafter.............................. 100.000 %
</TABLE>
(b) Notwithstanding the provisions of clause (a) of this clause 5,
at any time during the first 36 months after the Issue Date, the Company may at
its option redeem up to a maximum of 35% of the original aggregate principal
amount of the Notes with the net cash proceeds of one or more Public Equity
Offerings at a Redemption Price equal to 110.5% of the principal amount thereof,
plus accrued and unpaid interest (and Special Interest, if any), thereon to the
Redemption Date; provided that at least 65% of the aggregate principal amount of
the Notes originally issued shall remain outstanding immediately after the
occurrence of such redemption; and provided, further, that such redemption shall
occur within 90 days of the date of the closing of such Public Equity Offering.
(c) Notices of redemption will be mailed by first class mail at
least 30 days but not more than 60 days before the Redemption Date to each
Holder whose Notes are to be redeemed
6
<PAGE> 120
at its registered address. Notes in denominations larger than $1,000 may be
redeemed in part but only in integral multiples of $1,000, unless all of the
Notes held by a Holder are to be redeemed. Unless the Company defaults in making
such redemption payment, on and after the Redemption Date interest (including
Special Interest, if any) ceases to accrue on Notes or portions thereof called
for redemption.
6. Mandatory Redemption. Except as contemplated by clause 7
below, the Company shall not be required to make any mandatory redemption,
purchase or sinking fund payments with respect to the Notes prior to the
maturity date.
7. Repurchase at Option of Holder. (a) Upon the occurrence of a
Change of Control, each Holder will have the right to require the Company to
repurchase such Holder's Notes in whole or in part (the "Change of Control
Offer") at a purchase price (the "Change of Control Purchase Price") in cash
equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, and Special Interest, if any, to the Change of Control
Payment Date on the terms described in the Indenture.
Within 30 days following any Change of Control, the Company shall send,
or cause to be sent, by first class mail, postage prepaid, a notice regarding
the Change of Control Offer to each Holder of Notes. The Holder of this Note may
elect to have this Note or a portion hereof in an authorized denomination
purchased by completing the form entitled "Option of Holder to Require Purchase"
appearing below and tendering this Note pursuant to the Change of Control Offer.
Unless the Company defaults in the payment of the Change of Control Payment with
respect thereto, all Notes or portions thereof accepted for payment pursuant to
the Change of Control Offer will cease to accrue interest (and Special Interest,
if any) from and after the Change of Control Purchase Date.
(b) If at any time the Company or any Subsidiary engages in an
Asset Sale as result of which the aggregate amount of Excess Proceeds exceeds
$5,000,000, the Company shall within 270 days thereafter, or at any time after
receipt of Excess Proceeds but prior to there being $5,000,000 of Excess
Proceeds, the Company may, at its option, make a pro rata offer (an "Asset Sale
Offer") to all Holders of Notes and holders of Senior Debt, if and to the extent
the Company is required by the instruments governing such Senior Debt to make
such an offer, to purchase Notes and such Senior Debt in an aggregate amount
equal to the Excess Proceeds, at a price in cash (the "Asset Sale Offer Purchase
Price") equal to 100% of the outstanding principal amount of the Notes plus
accrued interest and Special Interest, if any, to the date of purchase and, in
the case of such other Senior Debt, 100% of the principal amount thereof, plus
accrued and unpaid interest, if any, thereon to the date of purchase. Upon
completion of such Asset Sale Offer, the amount of Excess Proceeds shall be
reset to zero and the Company may use any remaining amount for general corporate
purposes.
Within 30 days of the date the amount of Excess Proceeds exceeds
$5,000,000, the Company shall send, or cause to be sent, by first class mail,
postage prepaid, a notice regarding the Asset Sale Offer to each Holder of
Notes. The Holder of this Note may elect to have this Note or a portion
7
<PAGE> 121
hereof in an authorized denomination purchased by completing the form entitled
"Option of Holder to Elect Purchase" appearing below and tendering this Note
pursuant to the Asset Sale Offer. Unless the Company defaults in the payment of
the Asset Sale Offer Purchase Price with respect thereto, all Notes or portions
thereof selected for payment pursuant to the Asset Sale Offer will cease to
accrue interest from and after the Asset Sale Offer Purchase Date.
8. Denominations; Transfer and Exchange. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents (including in certain cases, opinions of counsel) and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Senior Note selected for redemption, except
for the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a Record Date and
the corresponding Interest Payment Date.
9. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
10. Amendment, Supplement and Waiver. With the consent of the
holders of not less than a majority in aggregate principal amount at Stated
Maturity of the outstanding Notes (including consents obtained in connection
with a tender offer or exchange offer for the Notes), the Company, the
Guarantors and the Trustee may enter into one or more indentures supplemental to
the Indenture for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of modifying in
any manner the rights of the holders; provided that no such supplemental
indenture will, without the consent of the Holder of each outstanding Note
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount thereof (or
premium, if any), or the interest thereon that would be due and payable upon
Maturity thereof, or change the place of payment where, or the coin or currency
in which, any Note or any premium or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof, (b) reduce the percentage in principal amount at Stated
Maturity of the outstanding Notes, the consent of whose Holders is necessary for
any such supplemental indenture or required for any waiver of compliance with
certain provisions of the Indenture, or certain Defaults thereunder, (c) modify
the Obligations of the Company to make offers to purchase Notes upon a Change of
Control or from the proceeds of Asset Sales, (d) subordinate in right of
payment, or otherwise subordinate, the Notes or the Guarantees to any other
Indebtedness, (e) amend, supplement or otherwise modify the provisions of the
Indenture relating to Guarantees or (f) make any changes in Sections 6.4 or 6.7
of the Indenture or modify any of the provisions of this clause (except to
increase any percentage set forth therein or herein).
8
<PAGE> 122
11. Defaults and Remedies. Events of Default include in summary
form: (i) default for 30 days in the payment when due of interest on, or Special
Interest with respect to, the Notes; (ii) default in payment when due of the
principal of or premium, if any, on the Notes; (iii) failure by the Company to
comply with Sections 4.9, 4.11, 4.12, 4.13, 4.15, 4.16, 4.21(c) or 5.1 of the
Indenture; (iv) failure by the Company for 30 days after notice to comply with
any of its other agreements in the Indenture or the Notes; (v) Indebtedness of
the Company or any Subsidiary is not paid when due within the applicable grace
period, if any, or is accelerated by the holders thereof and, in either case,
the principal amount of such unpaid or accelerated Indebtedness exceeds
$10,000,000 or more; (vi) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $5,000,000, which
judgments are not paid, discharged or stayed for a period of 60 days; (vii)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Significant Subsidiaries; and (viii) any Guarantee shall for any reason
cease to be, or be asserted by the Company or any Guarantor, as applicable, not
to be, in full force as effect (except pursuant to the release of any Guarantee
in accordance with the Indenture).
Holders of the Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal,
premium, if any, interest or Special Interest, if any) if it determines that
withholding notice is in their interest. Subject to certain limitations, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes then outstanding waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, premium, if any, on,
interest on, and, if any, on, the Notes. The Company is required to deliver to
the Trustee annually a statement regarding compliance with the Indenture, and
the Company is required upon becoming aware of any Default or Event of Default,
to deliver to the Trustee a statement specifying such Default or Event of
Default.
12. Defeasance Prior to Maturity or Redemption. The Company, at
its election, shall (a) be deemed to have paid and discharged its debt on the
Notes and the Indenture and Guarantees shall cease to be of further effect as to
all outstanding Notes (except as to (i) rights of registration of transfer,
substitution and exchange of Notes, (ii) the Company's right of optional
redemption, (iii) rights of Holders to receive payments of principal of,
premium, if any, and interest on the Notes (but not the Change of Control
Purchase Price or the Asset Sale Offer Purchase Price) and any rights of the
Holders with respect to such amounts, (iv) the rights, obligations and
immunities of the Trustee under the Indenture, and (v) certain other specified
provisions in the Indenture) or (b) cease to be under any obligation to comply
with certain restrictive covenants that are described in the Indenture, after
the irrevocable deposit by the Company with the Trustee, in trust for the
benefit of the Holders, at any time prior to the Stated Maturity of the Notes,
of (A) money in an amount, (B) U.S. Government Obligations which through the
payment of interest and principal will provide, not later than one Business Day
before the due date of payment in respect of such
9
<PAGE> 123
Notes, money in an amount, or (C) a combination thereof sufficient to pay and
discharge the principal of, premium, if any on, and interest (including Special
Interest, if any) on, such Notes then outstanding on the dates on which any such
payments are due in accordance with the terms of the Indenture and of such
Notes.
13. Trustee Dealings with the Company. Subject to certain
limitations imposed by the Trust Indenture Act, the Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company or a Guarantor, as such, shall not
have any liability for any obligations of the Company or the Guarantors under
the Notes, the Indenture, the Guarantees or for any claim based on, in respect
of, or by reason of, such Obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
15. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS NOTE, WITHOUT REGARD TO THE CONFLICTS OF
LAWS PRINCIPLES THEREOF.
16. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. Additional Rights of Holders of Transfer Restricted Notes. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transferred Restricted Notes (as defined in the Registration Rights
Agreement) shall have all the rights set forth in the Registration Rights
Agreement dated as of the date of the Indenture, between the Company and the
parties named on the signature pages thereof (the "Registration Rights
Agreement").
19. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
10
<PAGE> 124
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Schuff Steel Company
420 South 19th Avenue
Phoenix, Arizona 85069
Telephone No.: (602) 252-7787
Attention: Kenneth F. Zylstra
Telephone No.: (602) 251-0313
Telecopier No.: (602) 452-4465
11
<PAGE> 125
GUARANTEE
Subject to the limitations set forth in the Indenture, the Guarantors
(as defined in the Indenture referred to in this Note and each hereinafter
referred to as a "Guarantor," which term includes any successor or additional
Guarantor under the Indenture) have jointly and severally, irrevocably and
unconditionally guaranteed (a) the due and punctual payment of the principal
(and premium, if any) of and interest (and Special Interest, if any), on the
Notes, whether at Maturity, by acceleration, call for redemption, upon a Change
of Control Offer, Asset Sale Offer, purchase or otherwise, (b) the due and
punctual payment of interest on the overdue principal of and interest (and
Special Interest, if any), on the Notes to the extent lawful, (c) the due and
punctual performance of all other Obligations of the Company and the Guarantors
to the Holders under the Indenture and the Notes and (d) in case of any
extension of time of payment or renewal of any Notes or any of such other
Obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Maturity, by
acceleration, call for redemption, upon a Change of Control Offer, Asset Sale
Offer, purchase or otherwise. Capitalized terms used herein shall have the same
meanings assigned to them in the Indenture unless otherwise indicated.
Payment on each Note is guaranteed, jointly and severally, by the
Guarantors pursuant to Article 12 of the Indenture and reference is made to such
Indenture for the precise terms of the Guarantees.
The Obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to such maximum amount and all other contingent and
fixed liabilities of such Guarantor, and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of the
Obligations of such other Guarantor under its Guarantee or pursuant to its
contribution Obligations under the Indenture, result in the Obligations of such
Guarantor under its Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under any applicable Federal, State or foreign bankruptcy
law or not otherwise being void, voidable or unenforceable under any such
applicable bankruptcy law. Each Guarantor that makes a payment or distribution
under a Guarantee shall be entitled to a contribution from each other Guarantor
in a pro rata amount based on the Adjusted Net Assets of each Guarantor.
Certain of the Guarantors may be released from their Guarantees upon
the terms and subject to the conditions provided in the Indenture.
The Guarantee shall be binding upon each Guarantor listed below and its
successors and assigns and shall inure to the benefit of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions in the Indenture.
ADDISON STRUCTURAL SERVICES, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
12
<PAGE> 126
ADDISON STEEL, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
QUINCY JOIST COMPANY
By:_________________________________
Name:_______________________________
Title:______________________________
B & K STEEL FABRICATORS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
13
<PAGE> 127
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
________________________________________________________________________________
(Insert assignee's Social Security or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
- -
________________________________________________________________________________
- -
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company or the agent appointed by the
Company to maintain such books. The agent appointed hereby may substitute
another to act for him.
________________________________________________________________________________
Date: ________________________
Your signature: ___________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee:
14
<PAGE> 128
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.9 or 4.15 of the Indenture, check the box below:
Section 4.9 Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.9 or Section 4.15 of the Indenture, state the
amount you elect to have purchased (must be an integral multiple of $1,000):
$__________________
Signature Guarantee:
15
<PAGE> 129
SCHEDULE A
CHANGES IN PRINCIPAL AMOUNT OF NOTE(2)
The following changes in the principal amount of this Global Note have
been recorded:
<TABLE>
<CAPTION>
Principal Amount of this
Amount of decrease in Amount of increase in Global Note Signature of
Principal Amount of Principal Amount of following such decrease authorized officer
Date of Transaction this Global Note this Global Note (or increase) of Trustee
- ---------------------- ----------------------- ------------------------ ------------------------ ----------------------
<S> <C> <C> <C> <C>
</TABLE>
(2) This should only be included if the Note is issued in global form.
16
<PAGE> 130
Exhibit B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM U.S. GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.6(a)(1) of the Indenture)
Harris Trust Company of California
601 South Figueroa Street
Suite 4900
Los Angeles, California 90017
Attention: Corporate Trust Department
Re: 10 1/2% Senior Notes due 2008 of Schuff Steel Company
Reference is hereby made to the Indenture, dated as of June 4,
1998 (the "Indenture"), between Schuff Steel Company (the "Company"), the
Persons acting as guarantors and named therein (the "Guarantors") and Harris
Trust Company of California, as trustee (the "Trustee"). Capitalized terms used
but not defined herein shall have the meanings given them in the Indenture.
This letter relates to U.S.$___________ principal amount of
Notes which are evidenced by one or more U.S. Global Notes and held with the
Depository in the name of _____________ (the "Transferor"). The Transferor has
requested a transfer of such beneficial interest in the Notes to a Person who
will take delivery thereof in the form of an equal principal amount of Notes
evidenced by one or more Regulation S Global Notes, which amount, immediately
after such transfer, is to be held with the Depository through Euroclear or
Cedel or both.
In connection with such request and in respect of such Notes,
the Transferor hereby certifies that such transfer has been effected in
compliance with the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with Rule 903 or Rule 904 under the United States
Securities Act of 1933, as amended (the "Securities Act"), and accordingly the
Transferor hereby further certifies that:
(1) The offer of the Notes was not made to a person in
the United States and, if the 40-day restricted
period has not yet expired and the Transferor is a
dealer (as defined in Section 2(12) of the Securities
Act), or a person receiving a selling concession, fee
or other remuneration in respect of the Notes being
sold (collectively, "Dealers"), (i) neither the
Transferor or any person acting on its behalf knows
that the transferee is a U.S. person and (ii) if the
Transferor or any person acting on its behalf knows
that the transferee is a Dealer, the Transferor or
person acting on its behalf has sent a confirmation
or other notice to the transferee stating that the
Notes may be offered or sold during the 40-day
restricted period only in accordance with the
provisions of Regulation S, pursuant to registration
under the Securities Act or pursuant to an available
exemption from the registration requirements of the
Securities Act;
(2) either:
1
<PAGE> 131
(a) at the time the buy order was originated,
the transferee was outside the United States
or the Transferor and any person acting on
its behalf reasonably believed and believes
that the transferee was outside the United
States; or
(b) the transaction was executed in, on or
through the facilities of a designated
offshore securities market and neither the
Transferor nor any person acting on its
behalf knows that the transaction was
prearranged with a buyer in the United
States;
(3) no directed selling efforts have been made in
contravention of the requirements of Rule 904(b) of
Regulation S;
(4) the transaction is not part of a plan or scheme to
evade the registration provisions of the Securities
Act; and
(5) upon completion of the transaction, the beneficial
interest being transferred as described above is to
be held with the Depository through Euroclear or
Cedel or both.
Upon giving effect to this request to exchange a beneficial
interest in a U.S. Global Note for a beneficial interest in a Regulation S
Global Note. The resulting beneficial interest shall be subject to the
restrictions on transfer applicable to Regulation S Global Notes pursuant to the
Indenture and the Securities Act and, if such transfer occurs prior to the end
of the 40-day restricted period associated with the initial offering of Notes,
the additional restrictions applicable to transfers of interest in the
Regulation S Global Note.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, Jefferies & Company, Inc., and Freeman, Billings, Ramsey
& Co., Inc. (collectively, the Initial Purchasers"), the Initial Purchasers of
such Notes being transferred. We acknowledge that you, the Company and the
Initial Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our representations or warranties herein ceases to be accurate and
complete. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[INSERT NAME OF TRANSFEROR]
By:__________________________________
Name:________________________________
Title:_______________________________
Dated:
cc: Schuff Steel Company
Initial Purchasers
2
<PAGE> 132
Exhibit B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO U.S. GLOBAL NOTE
(Pursuant to Section 2.6(a)(ii) of the Indenture)
Harris Trust Company of California
601 South Figueroa Street
Suite 4900
Los Angeles, California 90017
Attention: Corporate Trust Department
Re: 10 1/2% Senior Notes due 2008 of Schuff Steel Company
Reference is hereby made to the Indenture dated as of June 4,
1998 (the "Indenture"), between Schuff Steel Company (the "Company"), the
Persons acting as guarantors and named therein (the "Guarantors") and Harris
Trust Company of California, as trustee (the "Trustee"). Capitalized terms used
but not defined herein shall have the meanings given them in the Indenture.
This letter relates to $____________ principal amount of Notes
which are evidenced by one or more Regulation S Global Notes and held with the
Depository through Euroclear or Cedel in the name of _________________ (the
"Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Notes to a Person who will take delivery thereof in the form of
an equal principal amount of Notes evidenced by one or more U.S. Global Notes,
to be held with the Depository.
In connection with such request and in respect of such Notes,
the Transferor hereby certifies that:
[CHECK ONE]
such transfer is being effected pursuant to and in accordance with Rule 144A
under the United States Securities Act of 1933, as amended (the
"Securities Act") and, accordingly, the Transferor hereby further
certifies that the Notes are being transferred to a Person that the
Transferor reasonably believes is purchasing the Notes for its own
account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such
account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A;
or
such transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act;
the Surrendered Notes are being transferred to Institutional Accredited
Investor pursuant to an exemption under the Securities Act other than Rule
144A, Rule 144 or Rule 904 and the Transferor further certifies that the
Transfer complies with the transfer restrictions applicable to
1
<PAGE> 133
beneficial interests in Global Notes and Certificated Notes bearing the
Private Placement Legend and the requirements of the exemption claimed,
which certification is supported by a certificate attached hereto
executed by the Transferee in the form of Exhibit C to the Indenture,
and, if the Company should so request, an Opinion of Counsel provided
by the Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), in form reasonably acceptable to the
Company and to the Registrar, to the effect that such transfer is in
compliance with the Securities Act to the effect that such Transfer is
in compliance with the Securities Act;
or
such transfer is being effected in an offshore transaction pursuant to and
in accordance with Rule 904 under the Securities Act;
or
such transfer is being effected pursuant to an effective registration statement
under the Securities Act;
or
such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than those
contemplated above, and the Transferor hereby further certifies that
the Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is supported
by an Opinion of Counsel, provided by the transferor or the transferee
(a copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
and such Notes are being transferred in compliance with any applicable blue sky
or securities laws of any state of the United States or any other applicable
jurisdiction.
Upon giving effect to this request to exchange a beneficial
interest in Regulation S Global Notes for a beneficial interest in U.S. Global
Notes, the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to U.S. Global Notes pursuant to the Indenture and the
Securities Act.
2
<PAGE> 134
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporations, Jefferies & Company, Inc. and Freeman, Billings, Ramsey
& Co., Inc. (collectively, the "Initial Purchasers"), the Initial Purchasers of
such Notes being transferred. We acknowledge that you, the Company and the
Initial Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our representations or warranties herein ceases to be accurate and
complete. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[INSERT NAME OF TRANSFEROR]
By:_____________________________________
Name:___________________________________
Title:__________________________________
Dated:_______________________
cc: Schuff Steel Company
Initial Purchasers
3
<PAGE> 135
Exhibit B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF DEFINITIVE NOTES
(Pursuant to Section 2.6(b) of the Indenture)
Harris Trust Company of California
601 South Figueroa Street
Suite 4900
Los Angeles, California 90017
Attention: Corporate Trust Department
Re: 10 1/2% Senior Notes due 2008 of Schuff Steel Company
Reference is hereby made to the Indenture dated as of June 4,
1998 (the "Indenture"), between Schuff Steel Company (the "Company"), the
Persons acting as guarantors and named therein (the "Guarantors") and Harris
Trust Company of California, as trustee (the "Trustee"). Capitalized terms used
but not defined herein shall have the meanings given them in the Indenture.
This relates to $_________ principal amount of Notes which are
evidenced by one or more Certificated Notes in the name of ______________ (the
"Transferor"). The Transferor has requested an exchange or transfer of such
Certificated Note(s) in the form of an equal principal amount of Notes evidenced
by one or more Certificated Notes, to be delivered to the Transferor or, in the
case of a transfer of such Notes, to such Person as the Transferor instructs the
Trustee.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
[CHECK ONE]
the Surrendered Notes are being acquired for the Transferor's own account,
without transfer;
or
the Surrendered Notes are being transferred to the Company;
or
the Surrendered Notes are being transferred pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the Surrendered Notes are being transferred to a
Person that the Transferor reasonably believes is purchasing the
Surrendered Notes for its own account, or for one or more accounts with
respect to which such Person exercises sole investment discretion, and
such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A, in each case in a transaction meeting
the requirements of Rule 144A;
1
<PAGE> 136
or
the Surrendered Notes are being transferred in a transaction permitted by Rule
144 under the Securities Act;
or
the Surrendered Notes are being transferred in an offshore transaction
pursuant to and in accordance with Rule 904 under the Securities Act;
or
the Surrendered Notes are being transferred to Institutional Accredited
Investor pursuant to an exemption under the Securities Act other than
Rule 144A, Rule 144 or Rule 904 and the Transferor further certifies
that the Transfer complies with the transfer restrictions applicable to
beneficial interests in Global Notes and Certificated Notes bearing the
Private Placement Legend and the requirements of the exemption claimed,
which certification is supported by a certificate attached hereto
executed by the Transferee in the form of Exhibit C to the Indenture,
and, if the Company should so request, an Opinion of Counsel provided
by the Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), in form reasonably acceptable to the
Company and to the Registrar, to the effect that such transfer is in
compliance with the Securities Act to the effect that such Transfer is
in compliance with the Securities Act;
or
the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than those
contemplated above, and the Transferor hereby further certifies that
the Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is supported
by an Opinion of Counsel, provided by the transferor or the transferee
(a copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky or securities laws of any state of the United States or any
other applicable jurisdiction.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, Jefferies & Company, Inc. and Freeman, Billings, Ramsey
& Co., Inc. (collectively, the "Initial Purchasers"), the Initial Purchasers of
such Notes being transferred. We acknowledge that you, the Company and the
Initial Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth
2
<PAGE> 137
herein, and we agree to notify you promptly in writing if any of our
representations or warranties herein ceases to be accurate and complete. Terms
used in this certificate and not otherwise defined in the Indenture have the
meanings set forth in Regulation S under the Securities Act.
[INSERT NAME OF TRANSFEROR]
By:______________________________________
Name:____________________________________
Title:___________________________________
Dated:________________________
cc: Schuff Steel Company
Initial Purchasers
3
<PAGE> 138
Exhibit B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM U.S. GLOBAL NOTE OR REGULATION S
PERMANENT GLOBAL NOTE
TO DEFINITIVE NOTE
(Pursuant to Section 2.6(c) of the Indenture)
Harris Trust Company of California
601 South Figueroa Street
Suite 4900
Los Angeles, California 90017
Attention: Corporate Trust Department
Re: 10 1/2% Senior Notes due 2008 of Schuff Steel Company
Reference is hereby made to the Indenture dated as of June 4,
1998 (the "Indenture"), between Schuff Steel Company. (the "Company"), the
Persons acting as guarantors and named therein (the "Guarantors") and Harris
Trust Company of California as trustee (the "Trustee"). Capitalized terms used
but not defined herein shall have the meanings given them in the Indenture.
This letter relates to $_____________ principal amount of
Notes which are evidenced by a beneficial interest in one or more U.S. Global
Notes or Regulation S Global Notes in the name of __________________ (the
"Transferor"). The Transferor has requested an exchange or transfer of such
beneficial interest in the form of an equal principal amount of Notes evidenced
by one or more Certificated Notes, to be delivered to the Transferor or, in the
case of a transfer of such Notes, to such Person as the Transferor instructs the
Trustee.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
[CHECK ONE]
the Surrendered Notes are being transferred to the beneficial owner of such
Notes;
or
the Surrendered Notes are being transferred pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the Surrendered Notes are being transferred to a
Person that the Transferor reasonably believes is purchasing the
Surrendered Notes for its own account, or for one or more accounts with
respect to which such Person exercises sole investment discretion, and
such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A, in each case in a transaction meeting
the requirements of Rule 144A;
1
<PAGE> 139
or
the Surrendered Notes are being transferred in a transaction permitted by Rule
144 under the Securities Act;
or
such transfer is being effected in an offshore transaction pursuant to and
in accordance with Rule 904 under the Securities Act;
or
the Surrendered Notes are being transferred to Institutional Accredited
Investor pursuant to an exemption under the Securities Act other than
Rule 144A, Rule 144 or Rule 904 and the Transferor further certifies
that the Transfer complies with the transfer restrictions applicable to
beneficial interests in Global Notes and Certificated Notes bearing the
Private Placement Legend and the requirements of the exemption claimed,
which certification is supported by a certificate attached hereto
executed by the Transferee in the form of Exhibit C to the Indenture,
and, if the Company should so request, an Opinion of Counsel provided
by the Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), in form reasonably acceptable to the
Company and to the Registrar, to the effect that such transfer is in
compliance with the Securities Act to the effect that such Transfer is
in compliance with the Securities Act;
or
the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
the Surrendered Notes are being transferred pursuant to an exemption from
the registration requirements of the Securities Act other than those
contemplated above, and the Transferor hereby further certifies that
the Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is supported
by an Opinion of Counsel, provided by the transferor or the transferee
(a copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, Jefferies & Company, Inc. and Freeman, Billings, Ramsey
& Co., Inc. (collectively, the "Initial Purchasers"), the Initial Purchasers of
such Notes being transferred. We acknowledge that you, the Company and the
Initial Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our representations or warranties
2
<PAGE> 140
herein ceases to be accurate and complete. Terms used in this certificate and
not otherwise defined in the Indenture have the meanings set forth in Regulation
S under the Securities Act.
[INSERT NAME OF TRANSFEROR]
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Dated:________________________
cc: Schuff Steel Company
Initial Purchasers
3
<PAGE> 141
Exhibit C
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Harris Trust Company of California
601 South Figueroa Street
Suite 4900
Los Angeles, California 90017
Attention: Corporate Trust Department
Reference is hereby made to the Indenture, dated as of June 4,
1998 (the "Indenture"), between Schuff Steel Company, as issuer, and Persons
acting as guarantors and named therein (the "Guarantors") and Harris Trust
Company of California as trustee. Capitalized terms used but not defined herein
shall have the meanings given them in the Indenture.
In connection with our proposed purchase of $________________
aggregate principal amount of:
(a) [ ] Beneficial interests, or
(b) [ ] Certificated Notes,
we confirm that:
(i) we are an entity which is an "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933, as amended (the "Securities Act"), or an entity
in which all of the equity owners are accredited investors within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act (an
"Institutional Accredited Investor");
(ii) any purchase of Notes by us will be for our own
account or for the account of one or more other Institutional
Accredited Investors;
(iii) in the event that we purchase any Notes, we will
acquire Notes having a minimum purchase price of at least $100,000 for
our own account and for each separate account for which we are acting;
(iv) we have such knowledge and experience in financial
and business matters that we are capable of evaluating the merits and
risks of purchasing Notes;
we are not acquiring Notes with a view to any distribution
thereof in a transaction that would violate the Securities Act or the
securities laws of any State of the United States or any other
applicable jurisdiction; provided that the disposition of our property
and the property of any accounts for which we are acting as fiduciary
shall remain at all times within our control; and
1
<PAGE> 142
(vi) we have received a copy of the Offering Memorandum
and acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such
questions of representatives of the Company and receive answers
thereto, as we deem necessary in connection with our decision to
purchase Notes.
We understand that the Notes are being offered in a
transaction not involving any public offering within the meaning of the
Securities Act and that the Notes have not been registered under the Securities
Act, and we agree, on our own behalf and on behalf of each account for which we
acquire any notes, that (A) such Notes may be offered, resold, pledged or
otherwise transferred only (i) to a person whom we reasonably believe to be a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act) in a transaction meeting the requirements of Rule 144A, in a transaction
meeting the requirements of Rule 144 under the Securities Act, outside the
United States in a transaction meeting the requirements of Rule 904 under the
Securities Act or in accordance with another exemption from the registration
requirements of the Securities Act (and based upon an opinion of counsel if the
Company so requests), (ii) to the Company or (iii) pursuant to an effective
registration statement under the Securities Act, and, in each case, in
accordance with any applicable securities laws of any State of the United States
or any other applicable jurisdiction and (B) that we will, and each subsequent
Holder is required to, notify any subsequent purchaser from it of the resale
restrictions set forth in (A) above. We understand that the registrar and
transfer agent will not be required to accept for registration of transfer any
Notes, except upon presentation of evidence satisfactory to the Company that the
foregoing restrictions on transfer have been complied with. We further
understand that the Notes purchased by us will bear a legend reflecting the
substance of this paragraph.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, Jefferies & Company, Inc. and Freeman, Billings, Ramsey
& Co., Inc.(collectively, the "Initial Purchasers"), the Initial Purchasers of
such Notes being transferred. We acknowledge that you, the Company and the
Initial Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our representations or warranties herein ceases to be accurate and
complete. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.
_________________________________
(Name of Purchaser)
By:_____________________________________
Name:___________________________________
Title:__________________________________
Address:________________________________
2
<PAGE> 143
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
310 (a)(1) ................................................................ 7.10
(a)(2) ................................................................ 7.10
(a)(3) ................................................................ N.A.
(a)(4) ................................................................ N.A.
(b) ................................................................ 7.3; 7.8; 7.10
(c) ................................................................ N.A.
311 (a) ................................................................ 7.11
(b) ................................................................ 7.11
(c) ................................................................ N.A.
312 (a) ................................................................ 2.5
(b) ................................................................ 11.3
(c) ................................................................ 11.3
313 (a) ................................................................ 7.6
(b)(1) ................................................................ N.A.
(b)(2) ................................................................ 7.6
(c) ................................................................ 7.6; 11.2
(d) ................................................................ 7.6
314 (a) ................................................................ 4.6; 4,22; 11.2
(b) ................................................................ N.A.
(c)(1) ................................................................ 11.4, 11.5
(c)(2) ................................................................ 7.2; 11.4; 11.5
(c)(3) ................................................................ N.A.
(d) ................................................................ N.A.
(e) ................................................................ 10.5
(f) ................................................................ N.A.
315 (a) ................................................................ 7.1(a)
(b) ................................................................ 4.22; 7.5; 11.4
(c) ................................................................ 7.1
(d) ................................................................ 7.1
(e) ................................................................ 6.11
316 (a)(last sentence) ................................................................ 2.9
(a)(1)(A) ................................................................ 6.5
(a)(1)(B) ................................................................ 6.4
(a)(2) ................................................................ N.A.
(b) ................................................................ 6.7
317 (a)(1) ................................................................ 6.3; 6.8
(a)(2) ................................................................ 6.9
(b) ................................................................ 2.4
318 (a) ................................................................ 11.1
</TABLE>
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
<PAGE> 1
Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
Dated as of June 4, 1998
by and among
SCHUFF STEEL COMPANY
AND ITS SUBSIDIARY GUARANTORS
and
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
JEFFERIES & COMPANY, INC.
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
<PAGE> 2
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of June 4, 1998, by and among Schuff Steel Company, Inc., a
Delaware corporation (the "COMPANY"), and each of its subsidiary guarantors set
forth on Exhibit B hereto (the "GUARANTORS"), and Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ"), Jefferies & Company, Inc., and Friedman,
Billings, Ramsey & Co., Inc. (each an "INITIAL PURCHASER" and, collectively, the
"INITIAL PURCHASERS"), each of whom has agreed to purchase the Company's 10 1/2%
Senior Notes due 2008 (the "RESTRICTED NOTES") pursuant to the Purchase
Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated June
1, 1998, (the "PURCHASE AGREEMENT"), by and among the Company, the Guarantors
and the Initial Purchasers. In order to induce the Initial Purchasers to
purchase the Restricted Notes, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 9 of the Purchase Agreement. Capitalized terms used herein and
not otherwise defined shall have the meaning assigned to them the Indenture,
dated June 4, 1998, between the Company and the Guarantors and Harris Trust
Company of California, as Trustee, relating to the Restricted Notes and the
Exchange Notes (the "INDENTURE").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
BROKER/DEALER: Any broker or dealer registered under the Exchange Act.
CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Registrar under the Indenture of Exchange
<PAGE> 3
Notes in the same aggregate principal amount as the aggregate principal amount
of Restricted Notes tendered by Holders thereof pursuant to the Exchange Offer.
CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.
EFFECTIVENESS DEADLINE: As defined in Section 3(a) and 4(a) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE NOTES: The Company's 10 1/2% Senior Notes due 2008 to be
issued pursuant to the Indenture: (i) in the Exchange Offer or (ii) as
contemplated by Section 4 hereof.
EXCHANGE OFFER: The exchange and issuance by the Company of a
principal amount of Exchange Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal amount
of Restricted Notes that are tendered by such Holders in connection with such
exchange and issuance.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Restricted Notes to certain "qualified institutional
buyers," as such term is defined in Rule 144A under the Act and pursuant to
Regulation S under the Act.
FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
HOLDERS: As defined in Section 2 hereof.
PROSPECTUS: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including posteffective amendments, and all material incorporated by reference
into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Exchange Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
posteffective amendments) and all exhibits and material incorporated by
reference therein.
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<PAGE> 4
REGULATION S: Regulation S promulgated under the Act.
RULE 144: Rule 144 promulgated under the Act.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa77bbbb)
as in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each Restricted Note, until the
earliest to occur of (a) the date on which such Restricted Note is exchanged in
the Exchange Offer for a Exchange Note which is entitled to be resold to the
public by the Holder thereof without complying with the prospectus delivery
requirements of the Act, (b) the date on which such Restricted Note has been
disposed of in accordance with a Shelf Registration Statement (and the
purchasers thereof have been issued Exchange Notes), or (c) the date on which
such Restricted Note is distributed to the public pursuant to Rule 144 under the
Act (and purchasers thereof have been issued Exchange Notes) and each Exchange
Note until the date on which such Exchange Note is disposed of by a
Broker/Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including the delivery of the Prospectus
contained therein).
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by
applicable federal law (after the procedures set forth in Section 6(a)(i) below
have been complied with), the Company and the Guarantors shall (i) cause the
Exchange Offer Registration Statement to be filed with the Commission as soon as
practicable after the Closing Date, but in no event later than 60 days after the
Closing Date (such 60th day being the "FILING DEADLINE"), (ii) use its best
efforts to cause such Exchange Offer Registration Statement to become effective
at the earliest possible time, but in no event later than 150 days after the
Closing Date (such 150th day being the "EFFECTIVENESS DEADLINE"), (iii) in
connection with the foregoing, (A) file all preeffective amendments to such
Exchange Offer Registration Statement as may be necessary in order to cause it
to become effective, (B) file, if applicable, a posteffective amendment to such
Exchange Offer Registration Statement pursuant to Rule 430A under the Act and
(C) cause all necessary filings, if any, in connection with the registration and
qualification of the Exchange Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer, and
(iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the
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<PAGE> 5
Exchange Offer. The Exchange Offer shall be on the appropriate form permitting
(i) registration of the Exchange Notes to be offered in exchange for the
Restricted Notes that are Transfer Restricted Securities and (ii) resales of
Exchange Notes by Broker/Dealers that tendered into the Exchange Offer
Restricted Notes that such Broker/Dealer acquired for its own account as a
result of market making activities or other trading activities (other than
Restricted Notes acquired directly from the Company or any of its Affiliates) as
contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall use their respective
best efforts to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer; provided, however, that in no event shall
such period be less than 20 Business Days. The Company and the Guarantors shall
cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Exchange Notes shall be included
in the Exchange Offer Registration Statement. The Company and the Guarantors
shall use their respective best efforts to cause the Exchange Offer to be
Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30 days
thereafter (such 30th day being the "CONSUMMATION DEADLINE").
(c) The Company shall include a "Plan of Distribution" section
in the Prospectus contained in the Exchange Offer Registration Statement and
indicate therein that any Broker/Dealer who holds Transfer Restricted Securities
that were acquired for the account of such Broker/Dealer as a result of
marketmaking activities or other trading activities (other than Restricted Notes
acquired directly from the Company or any Affiliate of the Company), may
exchange such Transfer Restricted Securities pursuant to the Exchange Offer.
Such "Plan of Distribution" section shall also contain all other information
with respect to such sales by such Broker/Dealers that the Commission may
require in order to permit such sales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker/Dealer or disclose the amount of
Transfer Restricted Securities held by any such Broker/Dealer, except to the
extent required by the Commission as a result of a change in policy, rules or
regulations after the date of this Agreement. See the Shearman & Sterling
no-action letter (available July 2, 1993).
Because such Broker/Dealer may be deemed to be an "underwriter"
within the meaning of the Act and must, therefore, deliver a prospectus meeting
the requirements of the Act in connection with its initial sale of any Exchange
Notes received by such Broker/Dealer in the Exchange Offer, such "Plan of
Distribution" section shall also expressly permit the use of the Prospectus
contained in the Exchange Offer Registration Statement by such Broker/Dealer to
satisfy such prospectus delivery requirement. To the extent necessary to ensure
that the prospectus contained in the Exchange Offer Registration Statement is
available for sales of Exchange Notes by Broker/Dealers, the Company and the
Guarantors agree to use their respective best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented, amended and current
as required by and subject to the provisions of Section 6(a) and (c) hereof and
in conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of one year from the Consummation Deadline or such shorter period
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<PAGE> 6
as will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold pursuant thereto. The Company and the
Guarantors shall provide sufficient copies of the latest version of such
Prospectus to such Broker/Dealers, promptly upon request, and in no event later
than one day after such request, at any time during such period.
(d) As a condition to its participation in the Exchange Offer,
each Holder of Transfer Restricted Securities (including, without limitation,
any Holder who is a Broker Dealer) shall furnish, upon the request of the
Company, prior to the Consummation of the Exchange Offer, a written
representation to the Company and the Guarantors (which may be contained in the
letter of transmittal contemplated by the Exchange Offer Registration Statement)
to the effect that (A) it is not an Affiliate of the Company, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the Exchange
Notes to be issued in the Exchange Offer and (C) it is acquiring the Exchange
Notes in its ordinary course of business. As a condition to its participation in
the Exchange Offer, each Holder using the Exchange Offer to participate in a
distribution of the Exchange Notes shall acknowledge and agree that, if the
resales are of Exchange Notes obtained by such Holder in exchange for Restricted
Notes acquired directly from the Company or an Affiliate thereof, it (1) could
not, under Commission policy as in effect on the date of this Agreement, rely on
the position of the Commission enunciated in Morgan Stanley and Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings Corporation (available May
13, 1988), as interpreted in the Commission's letter to Shearman & Sterling
dated July 2, 1993, and similar no-action letters (including, if applicable, any
no-action letter obtained pursuant to clause (i) above), and (2) must comply
with the registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a secondary resale
transaction must be covered by an effective registration statement containing
the selling security holder information required by Item 507 or 508, as
applicable, of Regulation S-K.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not
permitted by applicable law (after the Company and the Guarantors have complied
with the procedures set forth in Section 6(a)(i) below) or (ii) if any Holder of
Transfer Restricted Securities shall notify the Company within 20 Business Days
following the Consummation Deadline that (A) such Holder was prohibited by law
or Commission policy from participating in the Exchange Offer or (B) such Holder
may not resell the Exchange Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder or (C) such Holder is a Broker/Dealer and holds
Restricted Notes acquired directly from the Company or any of its Affiliates,
then the Company and the Guarantors shall:
(x) cause to be filed, on or prior to 30 days after
the earlier of (i) the date on which the Company determines that the
Exchange Offer Registration Statement cannot be filed as a result of
clause (a)(i) above and (ii) the date on which the Company receives
the notice specified in clause (a)(ii) above, (such earlier date, the
"FILING DEADLINE"), a shelf
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<PAGE> 7
registration statement pursuant to Rule 415 under the Act (which may
be an amendment to the Exchange Offer Registration Statement (the
"SHELF REGISTRATION STATEMENT")), relating to all Transfer Restricted
Securities, and
(y) shall use their respective best efforts to
cause such Shelf Registration Statement to become effective on or
prior to 60 days after the Filing Deadline for the Shelf Registration
Statement (such 60th day the "EFFECTIVENESS DEADLINE").
If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the Company is
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable federal law (i.e.,
clause (a)(i) above), then the filing of the Exchange Offer Registration
Statement shall be deemed to satisfy the requirements of clause (x) above;
provided that, in such event, the Company shall remain obligated to meet the
Effectiveness Deadline set forth in clause (y).
To the extent necessary to ensure that the Shelf Registration
Statement is available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 4(a) and the other
securities required to be registered therein pursuant to Section 6(b)(ii)
hereof, the Company and the Guarantors shall use their respective best efforts
to keep any Shelf Registration Statement required by this Section 4(a)
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Sections 6(b) and (c) hereof and in conformity with
the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of at
least two years (as extended pursuant to Section 6(c)(i)) following the Closing
Date, or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Shelf Registration Statement have been sold pursuant
thereto.
(b) Provision by Holders of Certain Information in Connection
with the Shelf Registration Statement. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing, within 20 days after receipt of a request
therefor, the information specified in Item 507 or 508 of Regulation S-K, as
applicable, of the Act for use in connection with any Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein. No Holder of
Transfer Restricted Securities shall be entitled to liquidated damages pursuant
to Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration Statement has
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<PAGE> 8
not been declared effective by the Commission on or prior to the applicable
Effectiveness Deadline, (iii) the Exchange Offer has not been Consummated on or
prior to the Consummation Deadline or (iv) any Registration Statement required
by this Agreement is filed and declared effective but shall thereafter cease to
be effective or fail to be usable for its intended purpose without being
succeeded immediately by a posteffective amendment to such Registration
Statement that cures such failure and that is itself declared effective
immediately (each such event referred to in clauses (i) through (iv), a
"REGISTRATION DEFAULT"), then the Company and the Guarantors hereby jointly and
severally agree to pay to each Holder of Transfer Restricted Securities affected
thereby liquidated damages in an amount equal to $.05 per week per $1,000 in
principal amount of Transfer Restricted Securities held by such Holder for each
week or portion thereof that the Registration Default continues for the first
90-day period immediately following the occurrence of such Registration Default.
The amount of the liquidated damages shall increase by an additional $.05 per
week per $1,000 in principal amount of Transfer Restricted Securities with
respect to each subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum amount of liquidated damages of $.50 per week per
$1,000 in principal amount of Transfer Restricted Securities; provided that the
Company and the Guarantors shall in no event be required to pay liquidated
damages for more than one Registration Default at any given time.
Notwithstanding anything to the contrary set forth herein, (1) upon filing of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (i) above, (2) upon the effectiveness of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (ii) above, (3) upon Consummation of the
Exchange Offer, in the case of (iii) above, or (4) upon the filing of a
posteffective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of (iv) above, the liquidated damages
payable with respect to the Transfer Restricted Securities as a result of such
clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be Transfer Restricted Securities, all obligations of the
Company and the Guarantors to pay liquidated damages with respect to securities
shall survive until such time as such obligations with respect to such
securities shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with
the Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective best
efforts to effect such exchange and to permit the resale of Exchange Notes by
Broker/Dealers that tendered in the Exchange Offer Restricted Notes that such
Broker/Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Restricted Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and (z)
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<PAGE> 9
comply with all of the following provisions:
(i) If, following the date hereof there has been
announced a change in Commission policy with respect to exchange
offers such as the Exchange Offer, that in the reasonable opinion of
counsel to the Company raises a substantial question as to whether
the Exchange Offer is permitted by applicable federal law, the
Company and the Guarantors hereby agree to seek a no-action letter or
other favorable decision from the Commission allowing the Company and
the Guarantors to Consummate an Exchange Offer for such Transfer
Restricted Securities. The Company and the Guarantors hereby agree to
pursue the issuance of such a decision to the Commission staff level.
In connection with the foregoing, the Company and the Guarantors
hereby agree to take all such other actions as may be requested by
the Commission or otherwise required in connection with the issuance
of such decision, including without limitation (A) participating in
telephonic conferences with the Commission, (B) delivering to the
Commission staff an analysis prepared by counsel to the Company
setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and (C)
diligently pursuing a resolution (which need not be favorable) by the
Commission staff.
(ii) To the extent required as a precondition to,
and prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a
supplemental letter to the Commission (A) stating that the Company
and the Guarantors are registering the Exchange Offer in reliance on
the position of the Commission enunciated in Exxon Capital Holdings
Corporation (available May 13, 1988), Morgan Stanley and Co., Inc.
(available June 5, 1991) as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and, if applicable, any
no-action letter obtained pursuant to clause (i) above, (B) including
a representation that neither the Company nor any Guarantor has
entered into any arrangement or understanding with any Person to
distribute the Exchange Notes to be received in the Exchange Offer
and that, to the best of the Company's and each Guarantor's
information and belief, each Holder participating in the Exchange
Offer is acquiring the Exchange Notes in its ordinary course of
business and has no arrangement or understanding with any Person to
participate in the distribution of the Exchange Notes received in the
Exchange Offer and (C) any other undertaking or representation
required by the Commission as set forth in any no-action letter
obtained pursuant to clause (i) above, if applicable.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall (i) comply with all
the provisions of Section 6(c) below and use their respective best efforts to
effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished to the Company
pursuant to Section 4(b) hereof), and pursuant thereto the Company and the
Guarantors will prepare and file with the Commission a Registration Statement
relating to the registration on any appropriate form under the Act, which form
shall be available for the sale of the Transfer Restricted Securities in
accordance with the intended method
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<PAGE> 10
or methods of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof and (ii) issue, upon the request of any
Holder or purchaser of Restricted Notes covered by any Shelf Registration
Statement contemplated by this Agreement, Exchange Notes having an aggregate
principal amount equal to the aggregate principal amount of Restricted Notes
sold pursuant to the Shelf Registration Statement and surrendered to the Company
for cancellation; the Company shall register Exchange Notes on the Shelf
Registration Statement for this purpose and issue the Exchange Notes to the
purchaser(s) of securities subject to the Shelf Registration Statement in the
names as such purchaser(s) shall designate.
(c) General Provisions. In connection with any Registration
Statement and any related Prospectus required by this Agreement, the Company and
the Guarantors shall:
(i) use their respective best efforts to keep such
Registration Statement continuously effective and provide all
requisite financial statements for the period specified in Section 3
or 4 of this Agreement, as applicable. Upon the occurrence of any
event that would cause any such Registration Statement or the
Prospectus contained therein (A) to contain an untrue statement of
material fact or omit to state any material fact necessary to make
the statements therein not misleading or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period
required by this Agreement, the Company and the Guarantors shall file
promptly an appropriate amendment to such Registration Statement
curing such defect, and, if Commission review is required, use their
respective best efforts to cause such amendment to be declared
effective as soon as practicable.
(ii) prepare and file with the Commission such
amendments and posteffective amendments to the applicable
Registration Statement as may be necessary to keep such Registration
Statement effective for the applicable period set forth in Section 3
or 4 hereof, as the case may be; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Act, and to
comply fully with Rules 424, 430A and 462, as applicable, under the
Act in a timely manner; and comply with the provisions of the Act
with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance
with the intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement to the
Prospectus;
(iii) advise each Initial Purchaser promptly and, if
requested by such Initial Purchaser, confirm such advice in writing,
(A) when the Prospectus or any Prospectus supplement or posteffective
amendment has been filed, and, with respect to any applicable
Registration Statement or any posteffective amendment thereto, when
the same has become effective, (B) of any request by the Commission
for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the
Act or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering
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<PAGE> 11
or sale in any jurisdiction, or the initiation of any proceeding for
any of the preceding purposes, (D) of the existence of any fact or
the happening of any event that makes any statement of a material
fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated by
reference therein untrue, or that requires the making of any
additions to or changes in the Registration Statement in order to
make the statements therein not misleading, or that requires the
making of any additions to or changes in the Prospectus in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the
Company and the Guarantors shall use their respective best efforts to
obtain the withdrawal or lifting of such order at the earliest
possible time;
(iv) subject to Section 6(c)(i), if any fact or
event contemplated by Section 6(c)(iii)(D) above shall exist or have
occurred, prepare a supplement or posteffective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to each Initial Purchaser(s) as the
case may be in connection with such exchange or sale, if any, before
filing with the Commission, copies of any Registration Statement or
any Prospectus included therein or any amendments or supplements to
any such Registration Statement or Prospectus (including all
documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the
review and comment of such Initial Purchaser(s) as the case may be in
connection with such sale, if any, for a period of at least two
Business Days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents
incorporated by reference) to which such Initial Purchaser(s) as the
case may be shall reasonably object within two Business Days after
the receipt thereof;
(vi) promptly prior to the filing of any document
that is to be incorporated by reference into a Registration Statement
or Prospectus, provide copies of such document to each Initial
Purchaser(s) as the case may be in connection with such exchange or
sale, if any, make the Company's and the Guarantors' representatives
available for discussion of such document and other customary due
diligence matters, and include such information in such document
prior to the filing thereof as such Initial Purchaser(s) as the case
may be may reasonably request;
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(vii) make available, at reasonable times, for
inspection by each Initial Purchaser(s) as the case may be and any
attorney or accountant retained by such Initial Purchaser(s) as the
case may be, all financial and other records, pertinent corporate
documents of the Company and the Guarantors and cause the Company's
and the Guarantors' officers, directors and employees to supply all
information reasonably requested by any such Holder, attorney or
accountant in connection with such Registration Statement or any
posteffective amendment thereto subsequent to the filing thereof and
prior to its effectiveness;
(viii) if requested by any Holders in connection with
such exchange or sale, promptly include in any Registration Statement
or Prospectus, pursuant to a supplement or posteffective amendment if
necessary, such information as such Holders may reasonably request to
have included therein, including, without limitation, information
relating to the "Plan of Distribution" of the Transfer Restricted
Securities; and make all required filings of such Prospectus
supplement or posteffective amendment as soon as practicable after
the Company is notified of the matters to be included in such
Prospectus supplement or posteffective amendment;
(ix) furnish to each Initial Purchaser in connection
with such exchange or sale without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of
each amendment thereto, including all documents incorporated by
reference therein and all exhibits (including exhibits incorporated
therein by reference);
(x) deliver to each Holder without charge, as many
copies of the Prospectus (including each preliminary prospectus) and
any amendment or supplement thereto as such Persons reasonably may
request; the Company and the Guarantors hereby consent to the use (in
accordance with law) of the Prospectus and any amendment or
supplement thereto by each selling Holder in connection with the
offering and the sale of the Transfer Restricted Securities covered
by the Prospectus or any amendment or supplement thereto;
(xi) upon the request of any Holder, enter into such
agreements (including underwriting agreements) and make such
customary representations and warranties and take all such other
actions in connection therewith in order to expedite or facilitate
the disposition of the Transfer Restricted Securities pursuant to any
applicable Registration Statement contemplated by this Agreement as
may be reasonably requested by any Holder in connection with any sale
or resale pursuant to any applicable Registration Statement. In such
connection, the Company and the Guarantors shall:
(A) upon request of any Initial Purchaser,
furnish (or in the case of paragraphs (2) and (3), use its
best efforts to cause to be furnished) to such Initial
Purchaser, upon Consummation of the Exchange Offer or upon
the effectiveness of the Shelf Registration Statement, as
the case may be:
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<PAGE> 13
(1) a certificate, dated such
date, signed on behalf of the Company and each
Guarantor by (x) the President or any Vice
President and (y) a principal financial or
accounting officer of the Company and such
Guarantor, confirming, as of the date thereof,
the matters set forth in Sections 6(y), 9(a)
and 9(b) of the Purchase Agreement and such
other similar matters as such Holders may
reasonably request;
(2) an opinion, dated the
date of Consummation of the Exchange Offer or
the date of effectiveness of the Shelf
Registration Statement, as the case may be, of
counsel for the Company and the Guarantors
covering matters similar to those set forth in
paragraph (e) of Section 9 of the Purchase
Agreement, and in any event including a
statement to the effect that such counsel has
participated in conferences with officers and
other representatives of the Company and the
Guarantors, representatives of the independent
public accountants for the Company and the
Guarantors and have considered the matters
required to be stated therein and the
statements contained therein, although such
counsel has not independently verified the
accuracy, completeness or fairness of such
statements; and that such counsel advises that,
on the basis of the foregoing (relying as to
materiality to the extent such counsel deems
appropriate upon the statements of officers and
other representatives of the Company and the
Guarantors and without independent check or
verification), no facts came to such counsel's
attention that caused such counsel to believe
that the applicable Registration Statement, at
the time such Registration Statement or any
posteffective amendment thereto became
effective and, in the case of the Exchange
Offer Registration Statement, as of the date of
Consummation of the Exchange Offer, contained
an untrue statement of a material fact or
omitted to state a material fact required to be
stated therein or necessary to make the
statements therein not misleading, or that the
Prospectus contained in such Registration
Statement as of its date and, in the case of
the opinion dated the date of Consummation of
the Exchange Offer, as of the date of
Consummation, contained an untrue statement of
a material fact or omitted to state a material
fact necessary in order to make the statements
therein, in the light of the circumstances
under which they were made, not misleading.
Without limiting the foregoing, such counsel
may state further that such counsel assumes no
responsibility for, and has not independently
verified, the accuracy, completeness or
fairness of the financial statements, notes and
schedules and other financial data included in
any Registration Statement contemplated by this
Agreement or the related Prospectus; and
(3) a customary comfort
letter, dated the date of Consummation of the
Exchange Offer, or as of the date of
effectiveness of the Shelf Registration
Statement, as the case may be, from the
Company's independent
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<PAGE> 14
accountants, in the customary form and covering
matters of the type customarily covered in
comfort letters to underwriters in connection
with underwritten offerings, and affirming the
matters set forth in the comfort letters
delivered pursuant to Section 9(g) of the
Purchase Agreement; and
(B) deliver such other documents and
certificates as may be reasonably requested by the selling
Holders to evidence compliance with the matters covered in
clause (A) above and with any customary conditions
contained in the any agreement entered into by the Company
and the Guarantors pursuant to this clause (xi);
(xii) prior to any public offering of Transfer
Restricted Securities, cooperate with the selling Holders and their
counsel in connection with the registration and qualification of the
Transfer Restricted Securities under the securities or Blue Sky laws
of such jurisdictions as the selling Holders may request and do any
and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted
Securities covered by the applicable Registration Statement;
provided, however, that neither the Company nor any Guarantor shall
be required to register or qualify as a foreign corporation where it
is not now so qualified or to take any action that would subject it
to the service of process in suits or to taxation, other than as to
matters and transactions relating to the Registration Statement, in
any jurisdiction where it is not now so subject;
(xiii) in connection with any sale of Transfer
Restricted Securities that will result in such securities no longer
being Transfer Restricted Securities, cooperate with the Holders to
facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not
bearing any restrictive legends; and to register such Transfer
Restricted Securities in such denominations and such names as the
selling Holders may request at least two Business Days prior to such
sale of Transfer Restricted Securities;
(xiv) use their respective best efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof to consummate the disposition of
such Transfer Restricted Securities, subject to the proviso contained
in clause (xii) above;
(xv) provide a CUSIP number for all Transfer
Restricted Securities not later than the effective date of a
Registration Statement covering such Transfer Restricted Securities
and provide the Trustee under the Indenture with printed certificates
for the Transfer Restricted Securities which are in a form eligible
for deposit with the Depository Trust Company;
(xvi) otherwise use their respective best efforts to
comply with all applicable rules and regulations of the Commission,
and make generally available to its security holders with regard to
any applicable Registration Statement, as soon as practicable, a
consolidated
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<PAGE> 15
earnings statement meeting the requirements of Rule 158 (which need
not be audited) covering a twelve month period beginning after the
effective date of the Registration Statement (as such term is defined
in paragraph (c) of Rule 158 under the Act);
(xvii) cause the Indenture to be qualified under the
TIA not later than the effective date of the first Registration
Statement required by this Agreement and, in connection therewith,
cooperate with the Trustee and the Holders to effect such changes to
the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute and
use its best efforts to cause the Trustee to execute, all documents
that may be required to effect such changes and all other forms and
documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner; and
(xviii) provide promptly to each Holder, upon request,
each document filed with the Commission pursuant to the requirements
of Section 13 or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition
of a Transfer Restricted Security that, upon receipt of the notice referred to
in Section 6(c)(iii)(C) or any notice from the Company of the existence of any
fact of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT
DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the date of delivery of the Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the
Guarantor(s)' performance of or compliance with this Agreement will be borne by
the Company, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses;
(ii) all fees and expenses of compliance with federal securities and state Blue
Sky or securities laws; (iii) all expenses of printing (including printing
certificates for the Exchange Notes
14
<PAGE> 16
to be issued in the Exchange Offer and printing of Prospectuses whether for
exchanges, sales, market making or otherwise, messenger and delivery services
and telephone; (iv) all fees and disbursements of counsel for the Company, the
Guarantors and the Holders of Transfer Restricted Securities; (v) all
application and filing fees in connection with listing the Exchange Notes on a
national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company and the Guarantors (including the
expenses of any special audit and comfort letters required by or incident to
such performance).
The Company will, in any event, bear its and the Guarantor(s)'
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expenses
of any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantor(s).
(b) In connection with any Registration Statement required by
this Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities who are tendering Restricted Notes into the Exchange Offer and/or
selling or reselling Restricted Notes or Exchange Notes pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Akin, Gump, Strauss,
Hauer & Feld, L.L.P., unless another firm shall be chosen by the Holders of a
majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors agree jointly and
severally, to indemnify and hold harmless each Holder, its directors, officers
and each Person, if any, who controls such Holder (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act), from and against any and all
losses, claims, damages, liabilities, judgments, (including without limitation,
any legal or other expenses incurred in connection with investigating or
defending any matter, including any action that could give rise to any such
losses, claims, damages, liabilities or judgments) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement, preliminary prospectus or Prospectus (or any amendment
or supplement thereto) provided by the Company to any Holder or any prospective
purchaser of Exchange Notes or registered Restricted Notes, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by an untrue statement or omission or alleged untrue statement or
omission that is based upon information relating to any of the Holders furnished
in writing to the Company by any of the Holders.
15
<PAGE> 17
(b) Each Holder of Transfer Restricted agrees, severally and
not jointly, to indemnify and hold harmless the Company and the Guarantors, and
their respective directors and officers, and each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company, or the Guarantors to the same extent as the foregoing indemnity
from the Company and the Guarantors set forth in section (a) above, but only
with reference to information relating to such Holder furnished in writing to
the Company by such Holder expressly for use in any Registration Statement. In
no event shall any Holder, its directors, officers or any Person who controls
such Holder be liable or responsible for any amount in excess of the amount by
which the total amount received by such Holder with respect to its sale of
Transfer Restricted Securities pursuant to a Registration Statement exceeds (i)
the amount paid by such Holder for such Transfer Restricted Securities and (ii)
the amount of any damages that such Holder, its directors, officers or any
Person who controls such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), a Holder shall not be required
to assume the defense of such action pursuant to this Section 8(c), but may
employ separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Holder). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed a they are incurred. Such firm shall be designated
in writing by a majority of the Holders, in the case of the parties indemnified
pursuant to Section 8(a), and by the Company and Guarantors, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action (i) effected with its
16
<PAGE> 18
written consent or (ii) effected without its written consent if the settlement
is entered into more than twenty business days after the indemnifying party
shall have received a request from the indemnified party for reimbursement for
the fees and expenses of counsel (in any case where such fees and expenses are
at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in
this Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Guarantors, on the one hand, and the Holders, on the other hand, from their
sale of Transfer Restricted Securities or (ii) if the allocation provided by
clause 8(d)(i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company and the Guarantors, on
the one hand, and of the Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and the Guarantors, on the one
hand, and of the Holder, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or such Guarantor, on the one hand, or by
the Holder, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and judgments referred to above shall be deemed to
include, subject to the limitations set forth in the second paragraph of Section
8(a), any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
The Company, the Guarantors and each Holder agree that it would not
be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred
17
<PAGE> 19
by such indemnified party in connection with investigating or defending any
matter, including any action that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, no Holder, its directors, its officers or any Person, if any, who
controls such Holder shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the total received by such Holder with
respect to the sale of Transfer Restricted Securities pursuant to a Registration
Statement exceeds (i) the amount paid by such Holder for such Transfer
Restricted Securities and (ii) the amount of any damages which such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 8(c) are several in proportion to the respective principal amount of
Transfer Restricted Securities held by each Holder hereunder and not joint.
SECTION 9. RULE 144A AND RULE 144
The Company and each Guarantor agrees with each Holder, for so long
as any Transfer Restricted Securities remain outstanding and during any period
in which the Company or such Guarantor (i) is not subject to Section 13 or 15(d)
of the Exchange Act, to make available, upon request of any Holder, to such
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A, and (ii) is subject to
Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby
in a timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company and the Guarantors acknowledge and
agree that any failure by the Company and/or the Guarantors to comply with their
respective obligations under Sections 3 and 4 hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder or Affiliated Market Makers may obtain such relief as
may be required to specifically enforce the Company's and the Guarantor's
obligations under Sections 3 and 4 hereof. The Company and the Guarantors
further agree to waive the defense in any action for specific performance that a
remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any
Guarantor will, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any Guarantor has previously entered into any agreement
granting any registration rights with respect to its securities to any Person.
The rights granted to the Holders
18
<PAGE> 20
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's and the Guarantor(s)' securities
under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless (i) in the case of
Section 5 hereof and this Section 10(c)(i), the Company has obtained the written
consent of Holders of all outstanding Transfer Restricted Securities and (ii) in
the case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the rights
of Holders hereunder.
(e) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, first class
mail (registered or certified, return receipt requested), telex, telecopier, or
air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the
Registrar under the Indenture; and
(ii) if to the Company or the Guarantor(s):
Schuff Steel Company
1841 West Buchanan Street
Phoenix, Arizona 85009
Telecopier No.: (602) 452-4465
Attention: Kenneth F. Zylstra
19
<PAGE> 21
With a copy to:
Snell & Wilmer, L.L.P.
One Arizona Center
Phoenix, Arizona 85004-0001
Telecopier No.: (602) 382-6070
Attention: Steven D. Pidgeon
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; provided, that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted Securities such
Person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement,
and such Person shall be entitled to receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
20
<PAGE> 22
(k) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted with respect to the
Transfer Restricted Securities. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
21
<PAGE> 23
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
SCHUFF STEEL COMPANY
By:______________________________________
Name: Scott A. Schuff
Title: President
ADDISON STRUCTURAL SERVICES, INC.
By:______________________________________
Name: Scott A. Schuff
Title: Chief Executive Officer
ADDISON STEEL, INC.
By:______________________________________
Name: Scott A. Schuff
Title: Chief Executive Officer
QUINCY JOIST COMPANY
By:______________________________________
Name: Scott A. Schuff
Title: Chief Executive Officer
22
<PAGE> 24
B & K STEEL FABRICATIONS, INC.
By:______________________________________
Name: Scott A. Schuff
Title: President
DONALDSON LUFKIN & JENRETTE
SECURITIES CORPORATION
JEFFERIES & COMPANY, INC.
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
BY: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:______________________________________
Name: Thomas H. Roberts III
Title: Vice President
23
<PAGE> 25
EXHIBIT A
NOTICE OF FILING OF
A/B EXCHANGE OFFER REGISTRATION STATEMENT
To: Donaldson, Lufkin & Jenrette Securities Corporation
Jefferies & Company, Inc.
Friedman, Billings, Ramsey & Co., Inc.
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Attention: Louise Guarneri (Compliance Department)
Fax: (212) 892-7272
From: Schuff Steel Company
10 1/2% Senior Notes due 2008
Date: ___, 199_
For your information only (NO ACTION REQUIRED):
Today, ______, 1998, we filed [AN A/B EXCHANGE REGISTRATION STATEMENT/A
SHELF REGISTRATION STATEMENT] with the Securities and Exchange Commission. We
currently expect this registration statement to be declared effective within __
business days of the date hereof.
<PAGE> 26
EXHIBIT B
SUBSIDIARY GUARANTORS
Addison Steel, Inc.
Addison Structural Services, Inc.
Quincy Joist Company
B & K Steel Fabrications, Inc.
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the previously filed
Registration Statement of Schuff Steel Company on Form S-8 No. 333-45829 of our
report dated August 5, 1997, except for Note 10 as to which the date is March
18, 1998, with respect to the consolidated financial statements of Addison
Structural Services, Inc. and Subsidiaries as of June 30, 1997 and for each of
the years in the three year period ended June 30, 1997 included in this Current
Report on Form 8K/A.
/s/ Mauldin & Jenkins, LLC
Albany, Georgia
June 19, 1998
<PAGE> 1
Exhibit 99.1
[SCHUFF STEEL COMPANY LETTERHEAD APPEARS HERE]
Press Release
Schuff Steel Company Completes Acquisition of
Addison Structural Services, Inc.
PHOENIX, June 4 -- Schuff Steel Company (Nasdaq: SHUF) announced today
that it has completed the acquisition of Addison Structural Services, Inc., a
privately held company headquartered in Albany, Ga. The aggregate purchase
price was $59.4 million.
Addison provides structural steel fabrication and erection services and
manufactures short- and long-span joists, trusses, and girders for industrial
and commercial projects. The newly acquired Addison fabrication facilities in
Albany, Ga., and Lockhart, Fla., and a joist manufacturing plant in Quincy,
Fla., broaden Schuff Steel's existing operations and open new market areas.
Schuff Steel will retain seasoned management with Addison's operations.
Addison posted revenues of $63.6 million in its fiscal year ended June
30, 1997, compared with revenues of $57.6 million in its fiscal year ended June
30, 1996.
"Our acquisition of Addison expands our presence in the southeastern
United States and establishes Schuff Steel as a major national force in the
industrial and commercial steel service industry," said Scott A. Schuff,
president and chief executive officer of Schuff Steel. "We will continue to
actively pursue opportunistic acquisitions of selective steel fabrication and
erection companies and continue with strategic expansion across the United
States."
Schuff Steel is a rapidly growing steel fabrication and erection company
that provides a fully integrated range of steel construction services, including
design engineering, detailing, joist manufacturing, fabrication and erection,
and provides a level of project management expertise necessary to accommodate
fast track, "design-as-you-go" projects. Examples of recent major projects are
Bank One Ballpark, a state-of-the-art baseball stadium featuring a fully
retractable roof constructed for Major League Baseball's Arizona Diamondbacks
franchise; Agua Fria Siphon Project, an aqueduct system with more than two miles
of specially fabricated, 21-foot diameter pipe; MGM Grand Hotel & Casino in Las
Vegas, the world's largest hotel and casino; and Bajo de la Alumbrera in
Argentina, on of the largest copper and gold mines in the world.
The company has multi-state operations primarily focused in the
southwestern and southeastern United States.
Statements in this press release contain expressed or implied forward-looking
statements that are based on the beliefs of management as well as assumptions
made based on information currently available to management. Actual results
and outcomes may differ materially from those discussed due to the impact of a
variety of factors. These risk factors and additional information are included
in the Company's annual report of Form 10-K, quarterly reports on Form 10-Q,
and other filings with the Securities and Exchange Commission.
<PAGE> 1
Exhibit 99.2
[SCHUFF STEEL COMPANY LETTERHEAD APPEARS HERE]
Press Release
- -------------------------------------------------------------------------------
Schuff Steel Company Closes $100 Million Private Placement
PHOENIX, June 4 -- Schuff Steel Company (Nasdaq: SHUF) announced today that
it has completed a private placement pursuant to Rule 144A of an aggregate of
$100 million in principal amount of its 10 1/2% Senior Notes due 2008.
Net proceeds of the offering were used to repay certain indebtedness of the
company and to pay the cash portion of the purchase price (approximately $53
million) of the company's acquisition of Addison Structural Services, Inc. The
balance of the net proceeds will be used for working capital and general
corporate purposes, which may include additional acquisition opportunities. The
placement was made to qualified institutional buyers.
The securities in the private placement have not been registered under the
Securities Act of 1933 or any state securities laws and may not be offered or
sold in the United States absent registration or an applicable exemption from
registration requirements.
Schuff Steel is a rapidly growing steel fabrication and erection company
that provides a fully integrated range of steel construction services, including
engineering, detailing, fabrication and erection. Examples of recent major
projects are Bank One Ballpark, a state-of-the-art baseball stadium featuring a
fully retractable roof constructed for Major League Baseball's Arizona
Diamondbacks franchise; Agua Fria Siphon Project, an aqueduct system with more
than two miles of specially fabricated, 21-foot diameter pipe; MGM Grand Hotel &
Casino in Las Vegas, the world's largest hotel and casino, and Bajo de la
Alumbrera in Argentina, one of the largest copper and gold mines in the world.
Statements in this press release contain expressed or implied
forward-looking statements that are based on the beliefs of management as well
as assumptions made based on information currently available to management.
Actual results and outcomes may differ materially from those discussed due to
the impact of a variety of factors. These risk factors and additional
information are included in the Company's annual report on Form 10-K, quarterly
reports on Form 10-Q, and other filings with the Securities and Exchange
Commission.
