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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 25049
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (Date of earliest event reported): December 1, 1998.
Wallace Computer Services, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-6528 36-2515832
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(State or other jurisdiction (Commission file (IRS Employer
of incorporation) Number) Identification Number)
2275 Cabot Drive, Lisle, Illinois 60532 60532
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(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (630) 588-5000
Not applicable
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(Former name or former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) -- (b) Not applicable.
(c) Exhibits.
Form of Purchase Agreement
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SIGNATURE
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.
WALLACE COMPUTER SERVICES, INC.
Date: December 1, 1998 By: /s/ Michael T. Leatherman
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Michael T. Leatherman
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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Sequentially
Exhibit Numbered
Number Description of Exhibit Page
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3 Form of Purchase Agreement 1
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EXHIBIT 3
Draft dated as of November 30, 1998
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WALLACE COMPUTER SERVICES, INC.
$200,000,000
____% Senior Notes, Series A, due ______, 200___
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PURCHASE AGREEMENT
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Dated as of December __, 1998
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TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
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SECTION 1 AUTHORIZATION OF NOTES.................................................................1
SECTION 2 SALE AND PURCHASE OF NOTES.............................................................1
Section 2.1 Sale and Purchase of Notes.............................................................1
Section 2.2 Security for the Notes.................................................................1
SECTION 3 CLOSING................................................................................2
SECTION 4 CONDITIONS TO CLOSING..................................................................2
Section 4.1 Representations and Warranties.........................................................2
Section 4.2 Direction of Indenture Trustee.........................................................3
Section 4.3 Documents Required by Indenture; Basis for Authentication..............................3
Section 4.4 Performance; No Default................................................................3
Section 4.5 Compliance Certificates................................................................3
Section 4.6 Opinions of Counsel....................................................................3
Section 4.7 Purchase Permitted By Applicable Law, Etc..............................................3
Section 4.8 Sale of Other Notes....................................................................4
Section 4.9 Funding Instructions...................................................................4
Section 4.10 Payment of Special Counsel Fees........................................................4
Section 4.11 Changes in Corporate Structure.........................................................4
Section 4.12 Proceedings and Documents..............................................................4
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................4
Section 5.1. Organization; Power and Authority......................................................4
Section 5.2. Authorization, Etc.....................................................................5
Section 5.3. Disclosure.............................................................................5
Section 5.4. Organization and Ownership of Shares of Restricted Subsidiaries;
Affiliates.........................................................................5
Section 5.5. Financial Statements...................................................................6
Section 5.6. Compliance with Laws, Other Instruments, Etc...........................................6
Section 5.7. Governmental Authorization, Etc........................................................7
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders..............................7
Section 5.9. Taxes..................................................................................7
Section 5.10. Licenses, Permits, Etc.................................................................8
Section 5.11. Compliance with ERISA..................................................................8
Section 5.12. Use of Proceeds; Margin Regulations....................................................9
Section 5.13. Existing Indebtedness; Future Liens....................................................9
Section 5.14. Foreign Assets Control Regulations, Etc................................................9
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<TABLE>
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Section 5.15. Status under Certain Statutes.........................................................10
Section 5.16. Notes Rank Pari Passu.................................................................10
Section 5.17. Environmental Matters.................................................................10
Section 5.18. Year 2000 Compliance..................................................................10
SECTION 6. REPRESENTATIONS OF THE PURCHASER......................................................11
Section 6.1. Purchase..............................................................................11
Section 6.2. Source of Funds.......................................................................11
SECTION 7. INFORMATION AS TO THE COMPANY.........................................................12
Section 7.1. Financial and Business Information....................................................12
Section 7.2. Officer's Certificate.................................................................15
Section 7.3. Inspection............................................................................15
Section 7.4. Reporting Treatment of Unrestricted Subsidiaries......................................16
SECTION 8. LIST OF NOTEHOLDERS; SUBSTITUTION OF NOTES; CERTAIN RESTRICTIONS
RELATING TO TRANSFER OF NOTES.........................................................16
Section 8.1. List of Noteholders...................................................................16
Section 8.2. Transfer of Notes.....................................................................16
Section 8.3. Replacement of Notes..................................................................16
Section 8.4. Certain Restriction Relating to Transfer of the Notes.................................17
SECTION 9. PAYMENTS ON NOTES.....................................................................17
Section 9.1. Place of Payment......................................................................17
Section 9.2. Home Office Payment...................................................................17
SECTION 10. EXPENSES, ETC.........................................................................17
Section 10.1. Transaction Expenses..................................................................17
Section 10.2. Survival..............................................................................18
SECTION 11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..........................18
SECTION 12. AMENDMENT AND WAIVER..................................................................18
Section 12.1. Requirements..........................................................................18
Section 12.2. Solicitation of Holders of Notes......................................................18
Section 12.3. Binding Effect, Etc...................................................................19
Section 12.4. Notes Held by Company, Etc............................................................19
SECTION 13. NOTICES...............................................................................19
SECTION 14. REPRODUCTION OF DOCUMENTS.............................................................20
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<TABLE>
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SECTION 15. CONFIDENTIAL INFORMATION..............................................................20
SECTION 16. SUBSTITUTION OF PURCHASER.............................................................21
SECTION 17. MISCELLANEOUS.........................................................................21
Section 17.1. Successors and Assigns................................................................21
Section 17.2. Severability..........................................................................21
Section 17.3. Construction..........................................................................22
Section 17.4. Counterparts..........................................................................22
SECTION 17.5. GOVERNING LAW.........................................................................22
Section 17.6. Legal Holidays........................................................................22
Signature..............................................................................................23
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<TABLE>
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SCHEDULE A -- INFORMATION RELATING TO PURCHASER
SCHEDULE B -- DEFINED TERMS
SCHEDULE 5.4 -- Restricted Subsidiaries of the Company and
Ownership of Subsidiary Stock
SCHEDULE 5.13 -- Existing Indebtedness
EXHIBIT 1 -- First Supplemental Indenture
EXHIBIT 4.6(a) -- Form of Opinion of Counsel for the Company
EXHIBIT 4.6(b) -- Form of Opinion of Special Counsel for the Purchasers
</TABLE>
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WALLACE COMPUTER SERVICES, INC.
2275 CABOT DRIVE
LISLE, ILLINOIS 60532
___% Senior Notes, Series A, due _______, 200___
Dated as of December __, 1998
TO THE PURCHASERS LISTED IN THE ATTACHED
SCHEDULE A WHO IS A SIGNATORY HERETO:
Ladies and Gentlemen:
WALLACE COMPUTER SERVICES, INC., a Delaware corporation (the "Company"),
agrees with you as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $____________ aggregate
principal amount of its ____% Senior Notes, Series A, due _______, 200___ (the
"Notes", such term to include any such notes issued in substitution therefor
pursuant to Sections 2.7 and 2.8 of the Indenture). Certain capitalized terms
used in this Agreement are defined in SCHEDULE B; references to a "SCHEDULE" or
an "Exhibit" are, unless otherwise specified, to a SCHEDULE or an Exhibit
attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Section 2.1. Sale and Purchase of Notes. Subject to the terms and
conditions of this Agreement, the Company will issue and sell to you and you
will purchase from the Company, at the Closing provided for in SECTION 3, Notes
in the principal amount specified opposite your name in SCHEDULE A at the
purchase price of 100% of the principal amount thereof. Contemporaneously with
entering into this Agreement, the Company is entering into separate Purchase
Agreements (the "Other Agreements") identical with this Agreement with each of
the other purchasers named in SCHEDULE A (the "Other Purchasers"), providing for
the sale at such Closing to each of the Other Purchasers of Notes in the
principal amount specified opposite its name in SCHEDULE A. Your obligation
hereunder, and the obligations of the Other Purchasers under the Other
Agreements, are several and not joint obligations, and you shall have no
obligation under any Other Agreement and no liability to any Person for the
performance or nonperformance by any Other Purchaser thereunder.
Section 2.2. Security for the Notes. The Notes will be issued under and
will be entitled to the benefit of that certain Indenture dated as of May _____,
1998 (the "Original Indenture") between the Company and The Bank of New York, a
New York banking corporation (the
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"Indenture Trustee"), to be supplemented and amended by a First Supplemental
Indenture to be dated as of _________, 1998 (the "First Supplemental Indenture")
which will be substantially in the form attached hereto as EXHIBIT 1. The
Original Indenture, as supplemented and amended by the First Supplemental
Indenture, is hereinafter referred to as the "Indenture." The Notes will be
substantially in the form attached as Exhibit A to the First Supplemental
Indenture and will be dated the date of issuance thereof, will be in the amount
of $1,000,000 or a multiple thereof (except as may be necessary to reflect any
principal amount, in excess of $1,000,000 not evenly divisible by $1,000,000),
will bear interest on the unpaid principal balance thereof from the date of the
Notes at the rate of ____% per annum, payable semiannually on the ______ day of
each __________ and ____________ in each year, commencing on _________ ___,
1999, until the principal amount thereof becomes due and payable, and will bear
interest on overdue principal (including any optional prepayment of principal)
and premium, if any, and (to the extent legally enforceable) on any overdue
installment of interest at the Overdue Rate, whether by acceleration or
otherwise, until paid, and will be expressed to mature on ______, 200___.
Interest on the Notes will be computed on the basis of a 360-day year of twelve
thirty-day months. The Notes are not subject to prepayment or redemption at the
option of the Company prior to their expressed maturity date except upon the
terms and conditions and in the amounts and with the premium, if any, set forth
in Articles _____ and _____ of the First Supplemental Indenture.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by you shall occur at
the offices of Chapman and Cutler, 111 West Monroe, Chicago, Illinois, at 9:00
A.M., at a closing (the "Closing") on _______, 199___ or on such other Business
Day thereafter on or prior to _________, 199_ as may be agreed upon by the
Company and you. At the Closing the Company will deliver to you the Notes to be
purchased by you in the form of a single Note (or such greater number of Notes
in denominations of at least $1,000,000 as you may request) dated the date of
the Closing and registered in your name (or in the name of your nominee),
against delivery by you to the Company or its order of immediately available
funds in the amount of the purchase price therefor by wire transfer for the
account of the Company to account number _______________ at
___________________________________, _____________, ABA number ______________.
If at the Closing the Company shall fail to tender such Notes to you as provided
above in this SECTION 3, or any of the conditions specified in SECTION 4 shall
not have been fulfilled to your satisfaction, you shall, at your election, be
relieved of all further obligations under this Agreement, without thereby
waiving any rights you may have by reason of such failure or such
nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at the
Closing is subject to the fulfillment to your satisfaction, prior to or at the
Closing, of the following conditions:
Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.
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Section 4.2. Direction of Indenture Trustee. You shall receive confirmation
from the Company, in form and substance reasonably satisfactory to you and your
special counsel, that the Indenture Trustee has been directed to make payments
becoming due on any Note in accordance with the terms of Section 9.2 of the
Indenture.
Section 4.3. Documents Required by Indenture; Basis for Authentication. The
Company shall have furnished to the Indenture Trustee the resolutions,
certificates and other instruments and cash, if any, required to be delivered
prior to or upon the issuance of the Notes pursuant to the provisions of the
Indenture. The Company shall have requested the Indenture Trustee to and the
Indenture Trustee shall have authenticated the Notes pursuant to Article II of
the Indenture.
Section 4.4. Performance; No Default. The Company shall have performed and
complied with all agreements and conditions contained in this Agreement and the
Indenture required to be performed or complied with by it prior to or at the
Closing, and after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by the Prospectus), no
Default or Event of Default shall have occurred and be continuing. Neither the
Company nor any Restricted Subsidiary shall have entered into any transaction
since December ___, 1998 that would have been prohibited by the Indenture had
the Indenture applied since such date.
Section 4.5. Compliance Certificates. (a) Officer's Certificates. The
Company shall have delivered to you an Officer's Certificate, dated the date of
the Closing, certifying that the conditions specified in SECTIONS 4.1, 4.3, 4.4
and 4.12 have been fulfilled.
(b) Secretary's Certificates. The Company shall have delivered to you a
certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes, the Agreements and the Indenture.
Section 4.6. Opinions of Counsel. You shall have received opinions in form
and substance satisfactory to you, dated the date of the Closing (a) from Sidley
& Austin, independent counsel for the Company, or Steven L. Carson, Esq.,
General Counsel of the Company, as appropriate, covering the matters set forth
in EXHIBIT 4.6(a) and covering such other matters incident to the transactions
contemplated hereby as you or your special counsel may reasonably request (and
the Company hereby instructs its counsel to deliver such opinion to you), and
(b) from Chapman and Cutler, your special counsel in connection with such
transactions, substantially in the form set forth in EXHIBIT 4.6(b) and covering
such other matters incident to such transactions as you may reasonably request.
Section 4.7. Purchase Permitted By Applicable Law, Etc. On the date of the
Closing your purchase of Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which you are subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (b) not violate any applicable law or
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject you to any tax,
penalty or liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If
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requested by you, you shall have received an Officer's Certificate certifying as
to such matters of fact as you may reasonably specify to enable you to determine
whether such purchase is so permitted.
Section 4.8. Sale of Other Notes. Contemporaneously with Closing, the
Company shall sell to the Other Purchasers, and the Other Purchasers shall
purchase, the Notes to be purchased by them at the Closing as specified in
SCHEDULE A.
Section 4.9. Funding Instructions. At least three Business Days prior to
the date of Closing, you shall have received written instructions executed by a
Responsible Officer of the Company directing the manner of the payment of funds
and setting forth (a) the name and address of the transferee bank, (b) such
transferee bank's ABA number, (c) the account name and number into which the
purchase price of the Notes is to be deposited, and (d) the name and telephone
number of the account representative responsible for verifying receipt of such
funds.
Section 4.10. Payment of Special Counsel Fees. Without limiting the
provisions of SECTION 10.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of your special counsel referred to in
SECTION 4.6 to the extent reflected in a statement of such counsel rendered to
the Company one Business Day prior to the Closing.
Section 4.11. Changes in Corporate Structure. The Company shall not have
changed its jurisdiction of incorporation or been a party to any merger or
consolidation and the Company shall not have succeeded to all or any substantial
part of the liabilities of any other entity, at any time following the date of
the most recent financial statements referred to in SECTION 5.5.
Section 4.12. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as you or they may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement, the Notes and
the Indenture, and to perform the provisions hereof and thereof.
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Section 5.2. Authorization, Etc. This Agreement, the Notes and the
Indenture have been duly authorized by all necessary corporate action on the
part of the Company, and this Agreement and the Indenture constitute, and upon
execution and delivery thereof each Note will constitute, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and except that
equitable remedies lie in the discretion of a court and may be unenforceable.
Section 5.3. Disclosure. The Prospectus fairly describes, in all material
respects, the general nature of the business and principal properties of the
Company and its Restricted Subsidiaries. This Agreement, the Prospectus
(including the documents incorporated therein by reference), the documents,
certificates or other writings delivered to you by or on behalf of the Company
in connection with the transactions contemplated hereby, taken as a whole, do
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made. As of the date hereof, as of
the time the Prospectus was filed with the Commission pursuant to Rule 424 under
the Securities Act and at any time prior to the date of the Closing that any
subsequent amendment or supplement to the Prospectus is filed with the
Commission: (i) the Registration Statement, as amended as of any time, the
Prospectus, as amended or supplemented as of any such time, and the Indenture
will comply in all material respects with the applicable requirements of the
Securities Act, the Exchange Act and the Trust Indenture Act, and the respective
rules and regulations of the Commission thereunder, (ii) the Registration
Statement, as amended as of any such time, 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 not misleading and (iii) the
Prospectus, as amended or supplemented as of any such time, will not contain an
untrue statement of a material fact or omit 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; provided, however, that the
representations and warranties contained in this SECTION 5.3 shall not apply to
(a) statements in or omissions from the Registration Statement or the Prospectus
made in reliance upon and in conformity with information (other than information
contained in this Agreement, the Other Agreements, the First Supplemental
Indenture and the Notes) furnished to the Company in writing by you expressly
for use in the Registration Statement or the Prospectus or (b) the Statement of
Eligibility (Form T-1) of the Trustee. Since the respective dates as of which
information is given in the Prospectus, there has been no change in the
financial condition, operations, business or properties of the Company or any
Restricted Subsidiary except changes that individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect.
Section 5.4. Organization and Ownership of Shares of Restricted
Subsidiaries; Affiliates. (a) Except as disclosed in SCHEDULE 5.4, the
Prospectus (including the documents incorporated by reference) lists (i) all of
the Company's Restricted Subsidiaries, showing, as to each Restricted
Subsidiary, the correct name thereof, the jurisdiction of its organization, and
the percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Restricted Subsidiary,
(ii) all of the Company's
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Affiliates, other than Restricted Subsidiaries, and (iii) all of the Company's
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Restricted Subsidiary shown in SCHEDULE 5.4 as being owned by
the Company and its Restricted Subsidiaries have been validly issued, are fully
paid and nonassessable and are owned by the Company or another Restricted
Subsidiary free and clear of any Lien (except as otherwise disclosed in SCHEDULE
5.4).
(c) Each Restricted Subsidiary identified in SCHEDULE 5.4 is a corporation
or other legal entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly qualified as a
foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Restricted Subsidiary has the corporate or
other power and authority to own or hold under lease the properties it purports
to own or hold under lease and to transact the business it transacts and
proposes to transact.
(d) No Restricted Subsidiary is a party to, or otherwise subject to, any
legal restriction or any agreement (other than this Agreement, the Other
Agreements, the agreements listed on SCHEDULE 5.4 and customary limitations
imposed by corporate law statutes) restricting the ability of such Restricted
Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Company or any of its Restricted Subsidiaries
that owns outstanding shares of capital stock or similar equity interests of
such Restricted Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Restricted
Subsidiaries included or incorporated by reference to the Registration
Statement. All of said financial statements (including in each case the related
schedules and notes) fairly present in all material respects the consolidated
financial position of the Company and its Restricted Subsidiaries as of the
respective dates specified in such financial statements and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).
Section 5.6. Compliance with Laws, Other Instruments, Etc. (a) The
execution, delivery and performance by the Company of this Agreement, the Notes
and the Indenture will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Restricted Subsidiary under, any other
indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease,
corporate charter or by-laws, or any other agreement or instrument to which the
Company or any Restricted Subsidiary is bound or by which the Company or any
Restricted Subsidiary or any of their respective properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
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arbitrator or Governmental Authority applicable to the Company or any Restricted
Subsidiary or (iii) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or any
Restricted Subsidiary, which in any such case could reasonably be expected to
have a Material Adverse Effect.
(b) Neither the Company nor any Restricted Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.7. Governmental Authorization, Etc. Except to the extent
expressly required by the Securities Act, the Exchange Act and the Trust
Indenture Act, no consent, approval or authorization of, or registration, filing
or declaration with, any Governmental Authority is required in connection with
the execution, delivery or performance by Company of this Agreement, the Notes
or the Indenture.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders. (a)
Except as disclosed in the Registration Statement or the Prospectus, there are
no actions, suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Restricted Subsidiary or any
property of the Company or any Restricted Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any Restricted Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Restricted Subsidiaries have filed
all tax returns that are required to have been filed in any jurisdiction, and
have paid all taxes shown to be due and payable on such returns and all other
taxes and assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable
and before they have become delinquent, except for any taxes and assessments (a)
the amount of which is not individually or in the aggregate Material or (b) the
amount, applicability or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which the Company or a
Restricted Subsidiary, as the case may be, has established adequate reserves in
accordance with GAAP. No Responsible Officer of the Company has any knowledge of
any other tax or assessment that would reasonably be expected to have a Material
Adverse Effect. The charges, accruals and reserves on the books of the Company
and its Restricted Subsidiaries in respect of Federal, state or other taxes for
all fiscal periods are adequate. The Federal income tax liabilities of the
Company and its Restricted
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Subsidiaries have been determined by the Internal Revenue Service and paid for
all fiscal years up to and including the fiscal year ended July 31, 1993.
Section 5.10. Licenses, Permits, Etc. (a) The Company and its Restricted
Subsidiaries own or possess all licenses, permits, franchises, authorizations,
patents, copyrights, service marks, trademarks and trade names, or rights
thereto, that individually or in the aggregate are Material, without known
conflict with the rights of others;
(b) to the knowledge of any Responsible Officer of the Company, no product
of the Company infringes in any Material respect any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or other
right owned by any other Person, other than infringements that individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect; and
(c) to the knowledge of any Responsible Officer of the Company, there is no
Material violation by any Person of any right of the Company or any of its
Restricted Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Company or any of its
Restricted Subsidiaries, other than violations that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
Section 5.11. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "benefit liabilities" has the
meaning specified in Section 4001 of ERISA and the terms "current value" and
"present value" have the meaning specified in Section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
Section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
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(d) The expected post-retirement benefit obligation (determined as of the
last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by Section 4980B of
the Code) of the Company and its Restricted Subsidiaries is not Material.
(e) Neither the execution and delivery of this Agreement and the Indenture,
nor the issuance, sale and delivery of the Notes hereunder will involve any
transaction that is subject to the prohibitions of Section 406 of ERISA or in
connection with which a tax could be imposed pursuant to Section
4975(c)(1)(A)-(D) of the Code. The representation by the Company in the first
sentence of this SECTION 5.12(e) is made in reliance upon and subject to the
accuracy of your representation in SECTION 6.2 as to the sources of the funds
used to pay the purchase price of the Notes to be purchased by you.
Section 5.12. Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Notes as set forth in the Prospectus. No part of
the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 1% of the value of the consolidated assets of the Company
and its Restricted Subsidiaries and the Company does not have any present
intention that margin stock will constitute more than 1% of the value of such
assets. As used in this Section, the terms "margin stock" and "purpose of buying
or carrying" shall have the meanings assigned to them in said Regulation U.
Section 5.13. Existing Indebtedness; Future Liens. (a) SCHEDULE 5.13 sets
forth a complete and correct list of all outstanding Indebtedness of the Company
and its Restricted Subsidiaries as of the date of the Closing. Neither the
Company nor any Restricted Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company or such Restricted Subsidiary and no event or
condition exists with respect to any Indebtedness of the Company or any
Restricted Subsidiary that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such Indebtedness to
become due and payable before its stated maturity or before its regularly
scheduled dates of payment.
(b) Except as disclosed in SCHEDULE 5.13, neither the Company nor any
Restricted Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
Section ___ of the First Supplemental Indenture.
Section 5.14. Foreign Assets Control Regulations, Etc.. Neither the sale of
the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States
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Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
Section 5.15. Status under Certain Statutes. Neither the Company nor any
Restricted Subsidiary is an "investment company" registered or required to be
registered subject to regulation under the Investment Company Act of 1940, as
amended, or is subject to regulation under the Public Utility Holding Company
Act of 1935, as amended, the ICC Termination Act of 1995, as amended, or the
Federal Power Act, as amended.
Section 5.16. Notes Rank Pari Passu. The obligations of the Company under
this Agreement and the Notes rank at least pari passu in right of payment with
all other senior unsecured Indebtedness (actual or contingent) of the Company,
including, without limitation, all senior unsecured Indebtedness of the Company
described in SCHEDULE 5.13.
Section 5.17. Environmental Matters. Neither the Company nor any Restricted
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Company or
any of its Restricted Subsidiaries or any of their respective real properties
now or formerly owned, leased or operated by any of them or other assets,
alleging any damage to the environment or violation of any Environmental Laws,
except, in each case, such as could not reasonably be expected to result in a
Material Adverse Effect. Except as otherwise disclosed to you in the Prospectus:
(a) neither the Company nor any Restricted Subsidiary has
knowledge of any facts which would give rise to any claim, public or
private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to real
properties now or formerly owned, leased or operated by any of them or
to other assets or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Restricted
Subsidiaries has stored any Hazardous Materials on real properties now
or formerly owned, leased or operated by any of them or has disposed of
any Hazardous Materials in a manner contrary to any Environmental Laws
in each case in any manner that could reasonably be expected to result
in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Restricted Subsidiaries are in
compliance with applicable Environmental Laws, except where failure to
comply could not reasonably be expected to result in a Material Adverse
Effect.
Section 5.18. Year 2000 Compliance. The Company and its Subsidiaries are in
the process of taking steps to address the impact of the Year 2000 on their
business operations and to become Year 2000 compliant in the occurrence of the
Year 2000.
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SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase. You represent that you are purchasing the Notes for
your own account or for one or more separate accounts maintained by you or for
the account of one or more pension or trust funds and not with a view to the
distribution thereof; provided that the disposition of your or their property
shall at all times be within your or their control.
Section 6.2. Source of Funds. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"Source") to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
(a) the Source is an "insurance company general account"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no employee
benefit plan, treating as a single plan all plans maintained by the
same employer (or affiliate thereof, as such term is defined in PTE
95-60) or by the same employee organization, with respect to which the
amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceed ten percent (10%)
of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth
in the NAIC Annual Statement filed with the state of domicile of the
insurance company; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
to the Company in writing pursuant to this paragraph (b), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part l(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a Person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment
fund have been disclosed to the Company in writing pursuant to this
paragraph (c); or
(d) the Source is a governmental plan; or
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<PAGE> 17
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
If you or any subsequent transferee of the Notes indicates that you or
such transferee are relying on any representation contained in paragraph (b),
(c) or (e) above, the Company shall deliver on the date of Closing and on the
date of any applicable transfer a certificate, which shall either state that (i)
it is neither a party in interest nor a "disqualified person" (as defined in
Section 4975(e)(2) of the Code), with respect to any plan identified pursuant to
paragraphs (b) or (e) above, or (ii) with respect to any plan, identified
pursuant to paragraph (c) above, neither it nor any "affiliate" (as defined in
Section V(c) of the QPAM Exemption) has at such time, and during the immediately
preceding one year, exercised the authority to appoint or terminate said QPAM as
manager of any plan identified in writing pursuant to paragraph (c) above or to
negotiate the terms of said QPAM's management agreement on behalf of any such
identified plan. As used in this SECTION 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO THE COMPANY.
Section 7.1. Financial and Business Information. The Company shall deliver
to each Holder of Notes that is an Institutional Investor:
(a) Quarterly Statements -- within 90 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of:
(i) a consolidated balance sheet of the Company and its
Restricted Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Restricted Subsidiaries for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal
year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments; provided that delivery within the time period specified
above of copies of the Company's Quarterly Report on Form 10-Q
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<PAGE> 18
prepared in compliance with the requirements therefor and filed with
the Commission shall be deemed to satisfy the requirements of this
SECTION 7.1(a);
(b) Annual Statements -- within 105 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Restricted Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Restricted Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by:
(1) an opinion thereon of independent
certified public accountants of recognized national
standing, which opinion shall state that such
financial statements present fairly, in all material
respects, the financial position of the companies
being reported upon and their results of operations
and cash flows and have been prepared in conformity
with GAAP, and that the examination of such
accountants in connection with such financial
statements has been made in accordance with generally
accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the
circumstances, and
(2) a certificate of such accountants
stating that they have reviewed this Agreement and
stating further whether, in making their audit, they
have become aware of any condition or event that then
constitutes a Default or an Event of Default, and, if
they are aware that any such condition or event then
exists, specifying the nature and period of the
existence thereof (it being understood that such
accountants shall not be liable, directly or
indirectly, for any failure to obtain knowledge of
any Default or Event of Default unless such
accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted
auditing standards or did not make such an audit),
provided that the delivery within the time period specified above of
the Company's Annual Report on Form 10-K for such fiscal year (together
with the Company's annual report to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance
with the requirements therefor and filed with the Commission, together
with the accountant's certificate described in clause (2) above, shall
be deemed to satisfy the requirements of this SECTION 7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Restricted Subsidiary to
public securities holders generally, and (ii) each
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<PAGE> 19
regular or periodic report, each registration statement (without
exhibits except as expressly requested by such Holder), and each
prospectus and all amendments thereto filed by the Company or any
Restricted Subsidiary with the Commission;
(d) Notice of Default or Event of Default -- promptly, and in any
event within five days after a Responsible Officer becoming aware of
the existence of any Default or Event of Default or that any Person
has given any notice or taken any action with respect to a claimed
default under the Indenture, a written notice specifying the nature
and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within 30 days
after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if
any, that the Company or an ERISA Affiliate proposes to take with
respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in Section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof;
or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in any
event within 30 days of receipt thereof, copies of any written notice
to the Company or any Restricted Subsidiary from any Federal or state
Governmental Authority relating to any order, ruling, statute or other
law or regulation that could reasonably be expected to have a Material
Adverse Effect;
(g) Certain Notices Under the Indenture -- true, correct and
complete copies of any notices delivered by the Company directly to
any Holder of any of the Securities issued and outstanding pursuant to
the terms and provisions of the Indenture; and
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(h) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Restricted Subsidiaries or relating to the ability of the
Company to perform its obligations hereunder and under the Notes and
the Indenture as from time to time may be reasonably requested by any
such holder of the Notes, including, without limitation, such
information as the holders of the Notes may request with respect to
the Company's internal computer system as it relates to Year 2000
Compliance and the impact of the Year 2000 would have on such system.
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a Holder of Notes pursuant to SECTION 7.1(a) or SECTION 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was
in compliance with the requirements of Sections ___ and ___ of the
First Supplemental Indenture during the quarterly or annual period
covered by the statements then being furnished (including with respect
to each such Section, where applicable, the calculations of the
maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation of
the amount, ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms of the Indenture and has made, or caused
to be made, under his or her supervision, a review of the transactions
and conditions of the Company and its Restricted Subsidiaries from the
beginning of the quarterly or annual period covered by the statements
then being furnished to the date of the certificate and that such
review shall not have disclosed the existence during such period of
any condition or event that constitutes a Default or an Event of
Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition resulting
from the failure of the Company or any Restricted Subsidiary to comply
with any Environmental Law), specifying the nature and period of
existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives of
each Holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists,
at the expense of such Holder and upon reasonable prior notice to the
Company, to visit the principal executive office of the Company, to
discuss the affairs, finances and accounts of the Company and its
Restricted Subsidiaries with the Company's officers and (with the
consent of the Company, which consent will not be unreasonably
withheld) the independent public accountants of the Company and (with
the consent of the Company, which consent will not be unreasonably
withheld) to visit the other offices and properties of the Company and
each Restricted Subsidiary, all at such reasonable times and as often
as may be reasonably requested in writing; and
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(b) Default -- if a Default or Event of Default then exists, at
the expense of the Company, to visit and inspect any of the offices or
properties of the Company or any Restricted Subsidiary, to examine all
their respective books of account, records, reports and other papers,
to make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and
independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and
accounts of the Company and its Restricted Subsidiaries), all at such
reasonable times and as often as may be reasonably requested in the
manner contemplated by SECTION 13.
Section 7.4. Reporting Treatment of Unrestricted Subsidiaries.
Notwithstanding anything to the contrary contained in this Agreement, so long as
the Unrestricted Subsidiaries continue to constitute, in the aggregate, less
than 7% of Consolidated Total Capitalization in any fiscal period, the Company
shall be permitted to include, for purposes of the financial reporting
requirements contained in SECTIONS 7.1(a) and (b), and only for purposes of such
Sections, the financial information of such entities on a consolidated basis. If
at any time the Unrestricted Subsidiaries shall constitute, in the aggregate, 7%
or more of Consolidated Total Capitalization in any fiscal period, the Company
shall, notwithstanding that SECTION 7.1(a) and (b) permit the Company to comply
therewith by delivery of its Quarterly Reports on Form 10-Q and Annual Reports
on Form 10-K, either: (a) provide consolidating financial statements setting
forth separately the financial information for the Unrestricted Subsidiaries for
such period, together with the financial information of such entities on a
consolidated basis for purposes of the financial reporting requirements
contained in SECTIONS 7.1(a) and (b) and only for purposes of such Sections or
(b) exclude the financial information on a consolidated basis for the
Unrestricted Subsidiaries from the consolidated financial statements required to
be delivered by the Company for such period pursuant to SECTIONS 7.1(a) and (b).
In no event shall the Company include financial information of the Unrestricted
Subsidiaries for purposes of any determination of compliance with any of the
covenants contained in the Indenture.
SECTION 8. LIST OF NOTEHOLDERS; SUBSTITUTION OF NOTES; CERTAIN
RESTRICTIONS RELATING TO TRANSFER OF NOTES.
Section 8.1. List of Noteholders. The Company shall give to any Holder of a
Note that is an Institutional Investor promptly, upon request therefor, a
complete and correct copy of the names and addresses of all registered Holders
of the Notes.
Section 8.2. Transfer of Notes. Except as otherwise expressly provided
herein, any transfer, exchange or substitution of the Notes shall be governed by
the terms and provisions of the Indenture. Notes shall not be transferred in
denominations of less than $1,000,000; provided that if necessary to enable the
registration of transfer by a Holder of its entire holding of Notes, one Note
may be in a denomination of less than $1,000,000. Any transferee, by its
acceptance of a Note registered in its name (or the name of its nominee), shall
be deemed to have made the representations set forth in SECTION 6.1 and in
SECTION 6.2.
Section 8.3. Replacement of Notes. In the case of an Institutional
Investor, notice from such Institutional Investor of such ownership and such
loss, theft, destruction or mutilation
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thereof shall be accepted as evidenced thereof by the Company and the Indenture
Trustee. If the Holder of any Note is, or is an Institutional Investor, or a
nominee thereof, such Institutional Investor's own unsecured agreement of
indemnity shall be deemed to be satisfactory by the Company and the Indenture
Trustee.
Section. 8.4. Certain Restriction Relating to Transfer of the Notes. You,
the Other Purchasers and each of their respective transferees of the Notes, by
their acceptance thereof, understand and agree that they will not transfer the
Notes or any part or portion thereof to a Competitor.
SECTION 9. PAYMENTS ON NOTES.
Section 9.1. Place of Payment. Subject to SECTION 9.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made at the Corporate Trust Office of the Indenture Trustee.
Section 9.2. Home Office Payment. So long as an original purchaser or its
nominee shall be the Holder of any Note, and notwithstanding anything contained
in SECTION 9.1, in such Note or in the Indenture to the contrary, the Company
will pay all sums becoming due on such Note for principal, Make-Whole Amount, if
any, and interest by the method and at the address specified for such purpose
below its name in SCHEDULE A to the Purchase Agreements, or by such other method
or at such other address as it shall have from time to time specified to the
Company in writing for such purpose, without the presentation or surrender of
such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, each original purchaser shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company at the Corporate Trust Office of the Indenture Trustee.
Prior to any sale or other disposition of any Note held by each original
purchaser of the Notes or its nominee, such purchaser will, at its election,
either endorse thereon the amount of principal paid thereon and the last date to
which interest has been paid thereon or surrender such Note to the Indenture
Trustee in exchange for a new Note or Notes pursuant to the Indenture. The
Company will afford the benefits of this provision to any Institutional Investor
that is the direct or indirect transferee of any Note purchased by each original
purchaser of the Notes and that has made the same written agreement relating to
such Note as such purchaser have made in the Purchase Agreements.
SECTION 10. EXPENSES, ETC.
Section 10.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required, local or other counsel) incurred by you and each Other Purchaser or
Holder of a Note in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement, the Notes
or the Indenture (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend)
any rights under this Agreement, the Notes or the Indenture or in responding to
any subpoena or other legal process or informal investigative
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demand issued in connection with this Agreement, the Notes or the Indenture, or
by reason of being a Holder of any Note, and (b) the costs and expenses,
including financial advisors' fees, incurred in connection with the insolvency
or bankruptcy of the Company or any Restricted Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby and by the
Notes and the Indenture. The Company will pay, and will save you and each other
Holder of a Note harmless from, all claims in respect of any fees, costs or
expenses, if any, of brokers and finders (other than those retained by you)
Section 10.2. Survival. The obligations of the Company under this SECTION
10 will survive the payment or transfer of any Note, the enforcement, amendment
or waiver of any provision of this Agreement, the Notes or the Indenture, and
the termination of this Agreement.
SECTION 11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent Holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other Holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement, the Indenture and the Notes
embody the entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject matter
hereof.
SECTION 12. AMENDMENT AND WAIVER.
Section 12.1. Requirements. This Agreement may be amended, and the
observance of any term hereof may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of SECTION 1, 2, 3, 4, 5, 6 or 16 hereof, or any defined term (as it
is used therein), will be effective as to you unless consented to by you in
writing, and (b) no such amendment or waiver may, without the written consent of
the Holder of each Note at the time outstanding affected thereby, (i) change the
percentage of the principal amount of the Notes the Holders of which are
required to consent to any such amendment or waiver, or (ii) amend any of this
SECTION 12 or SECTION 15. No term or provision of the Notes may be amended or
waived except as otherwise permitted in the First Supplemental Indenture.
Section 12.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each Holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such Holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof. The Company will deliver executed or true and correct copies of each
amendment, waiver or consent effected pursuant to the provisions of this SECTION
12 to each
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Holder of outstanding Notes promptly following the date on which it is executed
and delivered by, or receives the consent or approval of, the requisite Holders
of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause to be
paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security, to any Holder of Notes as consideration
for or as an inducement to the entering into by any Holder of Notes of any
waiver or amendment of any of the terms and provisions hereof unless such
remuneration is concurrently paid, or security is concurrently granted, on the
same terms, ratably to each Holder of Notes then outstanding even if such Holder
did not consent to such waiver or amendment.
Section 12.3. Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 12 applies equally to all Holders of Notes and is
binding upon them and upon each future Holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the Holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any Holder of such
Note. As used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
Section 12.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the Holders of the requisite percentage of the
aggregate principal amount of Notes then outstanding approved or consented
to any amendment, waiver or consent to be given under this Agreement, or
have directed the taking of any action provided herein, to be taken upon
the direction of the Holders of a specified percentage of the aggregate
principal amount of Notes then outstanding, Notes directly or indirectly
owned by the Company or any of its Affiliates shall be deemed not to be
outstanding.
SECTION 13. NOTICES.
All notices and communications provided for hereunder shall be in writing
and sent (a) by telefacsimile if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges
prepaid), or (b) by registered or certified mail with return receipt requested
(postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in SCHEDULE A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other Holder of any Note, to such Holder at
such address as such other Holder shall have specified to the Company
in writing, or
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(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Treasurer or at such
other address as the Company shall have specified to the Holder of each
Note in writing.
Notices under this SECTION 13 will be deemed given only when actually
received.
SECTION 14. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This SECTION 14
shall not prohibit the Company or any other Holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
SECTION 15. CONFIDENTIAL INFORMATION.
For the purposes of this SECTION 15, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified in writing when received by you as being
confidential information of the Company or such Subsidiary; provided that such
term does not include information that (a) was publicly known or otherwise known
to you prior to the time of such disclosure, (b) subsequently becomes publicly
known through no act or omission by you or any Person acting on your behalf, (c)
otherwise becomes known to you other than through disclosure by the Company or
any Restricted Subsidiary or (d) constitutes financial statements delivered to
you under SECTION 7.1 that are otherwise publicly available. You will maintain
the confidentiality of such Confidential Information in accordance with
procedures adopted by you in good faith to protect confidential information of
third parties delivered to you; provided that you may deliver or disclose
Confidential Information to (i) your directors, trustees, officers, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by your Notes), (ii)
your financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this SECTION 15, (iii) any other Holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this SECTION 15), (v) any Person from which you offer to purchase any security
of the Company (if such Person
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<PAGE> 26
has agreed in writing prior to its receipt of such Confidential Information to
be bound by the provisions of this SECTION 15), (vi) any federal or state
regulatory authority having jurisdiction over you, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
you are a party or (z) if an Event of Default has occurred and is continuing, to
the extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under your Notes, this Agreement and the Indenture. Each Holder of
a Note, by its acceptance of a Note, will be deemed to have agreed to be bound
by and to be entitled to the benefits of this SECTION 15 as though it were a
party to this Agreement. On reasonable request by the Company in connection with
the delivery to any Holder of a Note of information required to be delivered to
such Holder under this Agreement or requested by such Holder (other than a
Holder that is a party to this Agreement or its nominee), such Holder will enter
into an agreement with the Company embodying the provisions of this SECTION 15.
SECTION 16. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as the
purchaser of the Notes that you have agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in SECTION 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this SECTION 16), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this SECTION
16), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original Holder of the
Notes under this Agreement.
SECTION 17. MISCELLANEOUS.
Section 17.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent Holder of a Note) whether so expressed or
not.
Section 17.2. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
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Section 17.3. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
Section 17.4. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
SECTION 17.5. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW
OF THE STATE OF ILLINOIS, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH
STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER
THAN SUCH STATE.
Section 17.6. Legal Holidays. If a payment date is any day that is not a
Business Day at a place of payment, payment may be made at the place on the next
succeeding Business Day, and no interest shall accrue for the intervening
period.
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