<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13
or 15(d) of the
Securities Exchange Act of 1934
Commission File No. 0-603
FOR QUARTER ENDED JUNE 30, 1994
BUTLER MANUFACTURING COMPANY
Incorporated in State of Delaware
BMA Tower - Penn Valley Park
Post Office Box 419917
Kansas City, Missouri 64141-0917
Phone: (816) 968-3000
I.R.S. Employer Identification Number: 44-0188420
Shares of common stock outstanding at
JUNE 30, 1994: 4,779,098
The name, address and fiscal year of the Registrant have not changed since the
last report.
The Registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past 90 days.
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INDEX
PART I. - FINANCIAL INFORMATION Page Number
ITEM 1. Financial Statements
(1) Condensed Consolidated Financial Statements (unaudited):
Consolidated Statements of Operations for the Three
and Six Month Periods Ended June 30, 1994 and 1993. 3
Consolidated Balance Sheets as of June 30, 1994 and
December 31, 1993. 4
Consolidated Statements of Cash Flows for the Six Month
Periods Ended June 30, 1994 and 1993. 5
(2) Statement as to Review and Presentation. 5
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 6
PART II. - OTHER INFORMATION
ITEM 2. Changes in Securities 7
ITEM 6. Exhibits and Reports on Form 8-K 7
Page 2
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PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and six month periods ended June 30, 1994 and 1993
(unaudited)
($000's omitted except for per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------------ ---------------------
1994 1993 1994 1993
----------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Net sales $ 175,422 $ 144,784 $ 292,489 $ 255,492
Cost of sales 143,936 119,481 243,139 212,936
----------- ----------- ---------- ---------
Gross profit 31,486 25,303 49,350 42,556
Selling, general, and
administrative expenses 20,613 19,581 39,571 37,964
----------- ----------- ---------- ---------
Operating income 10,873 5,722 9,779 4,592
International joint venture
income (loss), net 220 192 770 879
Other income (expense), net (468) (433) (1,070) (577)
----------- ----------- ---------- ---------
Earnings before interest
and taxes 10,625 5,481 9,479 4,894
Interest expense 1,030 1,337 1,761 2,572
----------- ----------- ---------- ---------
Pretax earnings 9,595 4,144 7,718 2,322
Income tax expense 4,514 1,744 4,038 1,134
----------- ----------- ---------- ---------
Net earnings $ 5,081 $ 2,400 $ 3,680 $ 1,188
=========== =========== ========== =========
Earnings per common share* $ 1.04 $ .51 $ .76 $ .24
=========== =========== ========== =========
</TABLE>
*Earnings per common share are based on net earnings and the average number
of common shares outstanding during each period. The weighted average number
of shares outstanding used in the computation of earnings per common share
are as follows:
Three months ended June 30, 1994 4,869,667
Three months ended June 30, 1993 4,661,344
Six months ended June 30, 1994 4,810,730
Six months ended June 30, 1993 4,616,053
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BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 1994 and December 31, 1993
(unaudited)
(000's omitted)
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 7,625 $ 14,853
Receivables, net 80,863 61,602
Inventories:
Raw materials 34,685 25,309
Work in process 4,531 3,766
Finished goods 19,094 15,670
Lifo reserve (7,707) (7,319)
----------- -----------
Total inventory 50,603 37,426
Real estate developments in progress 7,125 2,987
Deferred tax assets 7,216 7,216
Other current assets 4,591 4,182
----------- -----------
Total current assets 158,023 128,266
Investments and other assets, at cost 19,598 22,106
Assets held for sale 13,587 13,587
Property, plant and equipment, at cost 174,529 171,284
Less accumulated depreciation (132,828) (129,756)
----------- -----------
Net property, plant and equipment 41,701 41,528
----------- -----------
$ 232,909 $ 205,487
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 1,724 1,556
Current maturities of long-term debt 3,066 11,368
Accounts payable 58,590 41,777
Accrued liabilities 40,131 33,575
Taxes on income 6,653 9,918
----------- -----------
Total current liabilities 110,164 98,194
Deferred taxes on income 4,601 4,601
Other noncurrent liabilities 11,244 10,638
Long-term debt, less current maturities 40,488 30,345
Shareholders' equity:
Common stock, no par value, authorized 13,000,000 shares,
issued 6,058,800 shares, at stated value 12,623 12,623
Cumulative foreign currency translation adjustment 205 183
Retained earnings 89,410 86,332
----------- -----------
102,238 99,138
Less cost of common stock in treasury, 1,279,702 shares in 1994
and 1,336,484 shares in 1993 35,826 37,429
----------- -----------
Total shareholders' equity 66,412 61,709
----------- -----------
$ 232,909 $ 205,487
=========== ===========
</TABLE>
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BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six month periods ended June 30, 1994 and 1993
(unaudited)
(000's omitted)
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 3,680 $ 1,188
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation, amortization, other 3,896 4,780
Equity (earnings) loss of international joint ventures (387) (492)
Deferred taxes --- 397
Change in assets and liabilities:
Receivables (20,063) (7,027)
Inventories (13,177) (10,972)
Real estate developments in progress (4,138) (1,255)
Other current assets (409) (1,356)
Current liabilities excluding short-term debt 29,393 17,109
----------- -----------
Net cash (used in) provided by operating activities (1,205) 2,372
Cash flows from investing activities:
Capital expenditures (3,490) (3,319)
Sale of Walker (8,487) ---
Net changes in other noncurrent assets 1,316 (4,715)
Common stock dividend
from international joint venture 1,000 1,440
----------- -----------
Net cash used in investing activities (9,661) (6,594)
Cash flows from financing activities:
Proceeds from issuance of long-term debt 35,000 406
Repayment of long-term debt (24,857) (6,950)
Net change in short-term debt (8,134) 9,774
Sale and issuance of treasury stock 1,709 428
Purchase of treasury stock (106) ---
Net changes in other noncurrent liabilities 4 (107)
----------- -----------
Net cash provided by financing activities 3,616 3,551
Effect of exchange rate changes on cash 22 (170)
----------- -----------
Net decrease in cash and cash equivalents (7,228) (841)
Cash and cash equivalents at beginning of year 14,853 7,699
----------- -----------
Cash and cash equivalents at end of period $ 7,625 $ 6,858
=========== ===========
</TABLE>
REVIEW AND PRESENTATION
The information included in the foregoing consolidated financial
statements has been reviewed by KPMG Peat Marwick, independent public
accountants, in accordance with established standards and procedures for a
limited review of interim financial statements. The statements include all
adjustments which were, in the opinion of management, necessary to present a
fair statement of the results for the period, and include all adjustments and
additional disclosures proposed by independent public accountants.
Page 5
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ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
Cash and equivalents decreased $7.2 million in the first six months of 1994
primarily due to an increase in working capital requirements, to support
the significant increase in sales, and the payment of taxes on the gain related
to the sale of the Company's Walker Division in 1993. For the six months ended
June 30, 1994, domestic short-term borrowings averaged $7.1 million for 59 days
compared to $6.2 million for 134 days in 1993.
In the second quarter, the Company concluded a refinancing of its long-term
bank debt and bank credit facilities. The Company obtained $35 million
through a private placement of unsecured notes with four insurance companies.
The notes carry a fixed interest rate of 8.02%, and have an average life of
6.5 years. The bulk of the proceeds of the borrowings were used to retire
the bank debt. In addition, the Company replaced two domestic credit
agreements with a single $50 million revolving credit facility, provided by four
banking institutions, to meet the needs of both the Company and the Company's
subsidiary, Butler Real Estate, Inc. As of June 30, 1994, $9.0 million of the
credit line was utilized to provide a bank letter of credit arrangement to
secure insurance obligations. Management believes operating cash flow, along
with the bank credit facility, are sufficient to meet the Company's liquidity
requirements.
Butler Building Systems, Ltd., the Company's United Kingdom subsidiary,
maintains a separate line of credit with its local bank for approximately
$2.3 million at current exchange rates. In the second quarter, the Company
invested $.75 million in its United Kingdom subsidiary to reduce bank debt.
Management believes a combination of funding from the bank line of credit and
additional investment from the Company, as required, will be sufficient to meet
liquidity requirements.
Capital expenditures were $3.5 million for the first six months of 1994 compared
to $3.3 million a year ago. Total capital expenditures are expected to be
approximately $12.7 million in 1994 compared to actual expenditures of $6.5
million in 1993. During 1994, in anticipation of continuing growth in
pre-engineered metal building systems sales, the Company announced a
multi-million dollar expansion of its Annville, Pennsylvania plant, expected to
be operational in the third quarter of this year.
RESULTS OF OPERATIONS
Net sales of $175.4 million for the quarter ended June 30, 1994 were 21% higher
than a year ago, despite the absence of the sales of the Walker Division
that was sold in late 1993. Sales of continuing businesses (excluding Walker's
1993 second quarter sales) were 30% higher than a year ago. The majority of the
increase is attributable to an overall improvement in the U.S. economy,
specifically in the nonresidential construction market.
Net earnings for the quarter ended June 30, 1994 were $5.1 million or $1.04 per
common share compared to net earnings of $2.4 million or $.51 per common share a
year ago. In the second quarter of 1993, Walker had net earnings of $.6 million
or $.13 per common share, net of estimated interest expense savings. The
improvement in net earnings was due to the strong increase in quarterly sales of
the U.S. pre-engineered metal buildings and Lester wood frame buildings
businesses. Export sales remained strong primarily to Mexico and China. The
Company's European buildings business reported a loss in the second quarter of
1994, primarily attributable to increased marketing expenses in France and
Germany and depressed conditions in the European construction market.
Order backlog at June 30,1994 was $254 million compared to $171 million a year
ago, an increase of 48%, net of Walker. Building Systems Segment backlog was up
73% from last year due to the U.S. pre-engineered metal and wood frame
building systems businesses. The Other Building Products Segment backlog was
also particularly strong with a 31% increase over 1993, net of Walker. This
increase consists primarily of Vistawall architectural products division orders.
For additional information, see the letter to shareholders at Exhibit 19.
Page 6
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PART II. - OTHER INFORMATION
ITEM 2. Changes in Securities
On June 29, 1994, the Company issued $35 million of 8.02%
unsecured Senior Notes which mature on December 30, 2003 pursuant to a
Note Agreement dated as of June 1, 1994 ("Note Agreement"). The
proceeds of the borrowings were used to liquidate debt resulting from
a long-term secured credit agreement previously filed. The Note
Agreement, among other things, requires the Company to maintain its
Adjusted Consolidated Net Worth (as defined) at or above $50 million
and provides generally that the Company will not pay or declare
dividends or purchase any of its capital stock after March 31, 1994,
in excess of the sum of (A) $10 million plus (B) 75% of the Company's
Consolidated Net Income (or minus 100% of any deficit) in each fiscal
year after March 31, 1994, plus (C) cash received from the sale of
capital stock. The Note Agreement is attached to this Report as
Exhibit (4). The foregoing description does not purport to be complete
and is subject to and qualified in its entirety by reference to the
specific terms and provisions of the Note Agreement.
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
(4) Note Agreement, dated as of June 1, 1994 among Butler
Manufacturing Company and the insurance companies identified
therein.
(15) Letter from independent public accountants pursuant to
paragraph (d) of Rule 10-01 of Regulation S-X and related
letter.
(19) July 15, 1994 letter to shareholders.
(b) Reports of Form 8-K.
The Company has not filed any reports of Form 8-K during the quarter
ended June 30, 1994.
Page 7
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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 thereunto duly authorized.
BUTLER MANUFACTURING COMPANY
8/ 4/ 94 /s/ John J. Holland
- - -------- -------------------
Date John J. Holland
Vice President - Finance
and Chief Financial Officer
8/ 4/ 94 /s/ Richard O. Ballentine
- - ---------- --------------------------
Date Richard O. Ballentine
Vice President, General Counsel
and Secretary
Page 8
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Exhibit 99
EXHIBIT INDEX
Exhibit
Number Description
- - ------ --------------------------------------------------
[S] [C]
4 Note Agreement, dated as of June 1, 1994
15 Letter from independent public accountants pursuant to
paragraph (d) of Rule 10-01 of Regulation S-X and related
letter.
19 July 15, 1994 letter to shareholders.
Page 9
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Exhibit 4
BUTLER MANUFACTURING COMPANY
NOTE AGREEMENT
Dated as of June 1, 1994
$35,000,000 Principal Amount
8.02% Senior Notes
Due December 30, 2003
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<TABLE>
<S> <C> <C>
Section 1. DESCRIPTION OF NOTES AND COMMITMENT . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Description of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Commitment; Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. PREPAYMENT OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1. Required Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3. Notice of Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4. Surrender of Notes on Prepayment or Exchange . . . . . . . . . . . . . . . . . . 3
2.5. Direct Payment and Deemed Date of Receipt . . . . . . . . . . . . . . . . . . . 3
2.6. Allocation of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7. Payments Due on Saturdays, Sundays and Holidays . . . . . . . . . . . . . . . . 4
Section 3. REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1. Representations of the Company . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2. Representations of the Purchasers . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4. CLOSING CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2. Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3. Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.4. Payment of Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.5. Sale of Notes to Other Purchasers . . . . . . . . . . . . . . . . . . . . . . . 12
4.6. Subsidiary Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.7. Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.8. Legality of Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.9. Private Placement Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.10. Proceedings and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5. INTERPRETATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.1. Certain Terms Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.2. Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.3. Valuation Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.4. Direct or Indirect Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.1. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.2. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.3. Taxes, Claims for Labor and Materials . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
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<TABLE>
<S> <C> <C>
6.4. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.5. Maintenance of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.6. Financial Information and Reports . . . . . . . . . . . . . . . . . . . . . . . 22
6.7. Inspection of Properties and Records . . . . . . . . . . . . . . . . . . . . . . 24
6.8. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.9. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.10. Acquisition of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.11. Private Placement Number; NAIC . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1. Adjusted Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . 26
7.2. Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.3. Short-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.4. Funded Debt of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.5. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.6. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.7. Merger or Consolidation; Sale of Substantially All Assets.. . . . . . . . . . . 29
7.8. Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.9. Disposition of Stock of Restricted Subsidiaries . . . . . . . . . . . . . . . . 30
7.10. Designation of Unrestricted Subsidiaries . . . . . . . . . . . . . . . . . . . . 31
7.11. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.12. Consolidated Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.13. Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 8. EVENTS OF DEFAULT AND REMEDIES THEREFOR . . . . . . . . . . . . . . . . . . . . 32
8.1. Nature of Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.2. Remedies on Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.3. Annulment of Acceleration of Notes . . . . . . . . . . . . . . . . . . . . . . . 33
8.4. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.5. Conduct No Waiver; Collection Expenses . . . . . . . . . . . . . . . . . . . . . 34
8.6. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.7. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 9. AMENDMENTS, WAIVERS AND CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . 35
9.1. Matters Subject to Modification . . . . . . . . . . . . . . . . . . . . . . . . 35
9.2. Solicitation of Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . 35
9.3. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 10. FORM OF NOTES, REGISTRATION, TRANSFER,
EXCHANGE AND REPLACEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.1. Form of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.2. Note Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>
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<TABLE>
<S> <C> <C>
10.3. Issuance of New Notes upon Exchange or Transfer . . . . . . . . . . . . . . . . 36
10.4. Replacement of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.1. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.3. Reproduction of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.4. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.5. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.6. Law Governing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.7. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.8. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.9. Reliance on and Survival of Provisions . . . . . . . . . . . . . . . . . . . . . 38
11.10 Integration and Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SCHEDULE I Principal Amount of Notes to Be Purchased . . . . . . . . . . . . . . . . . . . . 42
ANNEXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
I Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
II Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
III Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
IV Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
V Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
VI Current Insurance Carriers and Ratings . . . . . . . . . . . . . . . . . . 53
</TABLE>
EXHIBITS
A Form of 8.02% Senior Notes due December 30, 2003
B Form of Opinion of Purchasers' Counsel
C Form of Opinion of Company's and Guarantors' Counsel
D Form of Subsidiary Guaranty
iii
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BUTLER MANUFACTURING COMPANY
NOTE AGREEMENT
Dated as of June 1, 1994
To Each of the Purchasers
Named in Attached Schedule I
Ladies and Gentlemen:
BUTLER MANUFACTURING COMPANY, a Delaware corporation (the "Company"),
agrees with you as follows:
Section 1. DESCRIPTION OF NOTES AND COMMITMENT
1.1. Description of Notes. The Company has authorized the issuance
and sale of $35,000,000 aggregate principal amount of its Senior Notes (the
"Notes"), to be dated the date of issuance, to bear interest from such date
(computed on the basis of a 360-day year comprised of twelve 30-day months),
payable semi-annually on June 30 and December 30 of each year, commencing
December 30, 1994, and at maturity, at the rate of 8.02% per annum prior to
maturity and shall bear interest on any overdue principal (including any
overdue optional or required prepayment), on any overdue Make-Whole Amount, and
(to the extent legally enforceable) on any overdue installment of interest at
the rate of 10.02% per annum. The Notes shall be expressed to mature on
December 30, 2003 and shall be substantially in the form attached as Exhibit A.
All payments on the Notes shall rank pari passu with all senior unsecured
Indebtedness including without limitation any owed to banks. The term "Notes"
as used herein shall include each Note delivered pursuant to this Note
Agreement (the "Agreement") and each Note delivered in substitution or exchange
therefore and, where applicable, shall include the singular number as well as
the plural. Any reference to you in this Agreement shall in all instances be
deemed to include any nominee of yours or any separate account or other person
on whose behalf you are purchasing Notes. You and the other purchasers are
sometimes referred to herein individually as a "Purchaser" and collectively as
the "Purchasers."
1.2. Commitment; Closing Date. Subject to the terms and conditions
hereof and on the basis of the representations and warranties hereinafter set
forth, the Company agrees to issue and sell to you, and you agree to purchase
from the Company, Notes in the aggregate principal amount set forth opposite
your name in the attached Schedule I at a price of 100% of the principal amount
thereof.
Delivery of and payment for the Notes shall be made at the offices of
Gardner, Carton & Douglas, 321 North Clark Street, Quaker Tower, Chicago,
Illinois 60610, at 9:00 a.m., Chicago time, on June 28, 1994 or on such other
date not later than June 30, 1994, as you and the
<PAGE> 6
Company may mutually agree (the "Closing Date"). The Notes shall be delivered
to you in the form of one or more Notes in fully registered form, issued in
your name or in the name of your nominee. Delivery of the Notes to you on the
Closing Date shall be against payment of the purchase price therefor in Federal
funds or other funds in U.S. dollars immediately available at NationsBank of
Texas, Dallas, Texas, A.B.A. No. 111-000-025, Attention: Corporate Loans, for
deposit in Account No. 1292-000-883, Reference: Butler Principal. If on the
Closing Date the Company shall fail to tender the Notes to you, you shall be
relieved of all remaining obligations under this Agreement. Nothing in the
preceding sentence shall relieve the Company of any liability occasioned by
such failure to deliver the Notes. The funding and other obligations of the
Purchasers under this Agreement are several and not joint.
1.3. Guaranty. The Notes will be guaranteed by the Guarantors
pursuant to the Subsidiary Guaranty, provided that, upon request of the
Company, if all amounts due and owed under the Subsidiary Guaranty have been
paid in full, the Purchasers will agree to terminate the Subsidiary Guaranty if
and when the subsidiary guaranty delivered pursuant to the Credit Agreement is
terminated. If in the future any Subsidiary guarantees any indebtedness under
the Credit Agreement other than pursuant to the subsidiary guaranty delivered
pursuant to the Credit Agreement or any other senior unsecured indebtedness
incurred by the Company, it being acknowledged that such guaranty must comply
with Section 7 of this Agreement, such Subsidiary shall contemporaneously
execute and deliver to the Purchasers a guaranty substantially similar to the
Subsidiary Guaranty.
Section 2. PREPAYMENT OF NOTES
2.1. Required Prepayments. In addition to payment of all
outstanding principal of the Notes at maturity and regardless of the amount of
Notes which may be outstanding from time to time, the Company shall prepay and
there shall become due and payable on December 30 in each year $5,000,000 of
the aggregate unpaid principal amount of the Notes or such lesser amount as
would constitute payment in full on the Notes, commencing December 30, 1997 and
ending December 30, 2002, inclusive, with the remaining principal payable on
December 30, 2003. Each such prepayment shall be at a price of 100% of the
principal amount prepaid, together with interest accrued thereon to the date of
prepayment, without a Make-Whole Amount.
2.2. Optional Prepayments.
(a) Upon notice as provided in Section 2.3, the Company may prepay
the Notes, in whole or in part, at any time on an interest payment date, in an
amount not less than $1,000,000, an integral multiple of $100,000 in excess
thereof or such lesser amount as shall constitute payment in full of the Notes.
Each such prepayment shall be at a price of 100% of the principal amount to be
prepaid, plus interest accrued thereon to the date of prepayment, plus the
Make-Whole Amount.
(b) Any optional prepayment of less than all of the Notes
outstanding pursuant to Section 2.2(a) or Section 7.8 shall be applied in
accordance with Section 2.6.
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<PAGE> 7
(c) Except as provided in Section 2.1, Section 7.8, and this
Section 2.2, the Notes shall not be prepayable in whole or in part.
2.3. Notice of Prepayments. The Company shall give notice of any
optional prepayment of the Notes pursuant to Section 2.2(a) to each holder of
the Notes not less than 30 days nor more than 60 days before the date fixed for
prepayment, specifying (i) such date, (ii) the principal amount of the holder's
Notes to be prepaid on such date, (iii) the Determination Date for calculating
the Make-Whole Amount, (iv) a calculation of the estimated amount of the
Make-Whole Amount showing in detail the method of calculation and (v) the
accrued interest applicable to the prepayment. Notice of prepayment having
been so given, the aggregate principal amount of the Notes specified in such
notice, together with the Make-Whole Amount, if any, and accrued interest
thereon shall become due and payable on the prepayment date.
The Company also shall give notice to each holder of the Notes to be
prepaid pursuant to Section 2.2(a) by telecopy, telegram, telex or other
same-day written communication, confirmed by notice delivered by overnight
courier, as soon as practicable but in any event not less than 1 Business Day
prior to the prepayment date, of the Make-Whole Amount applicable to such
prepayment and the details of the calculations used to determine the amount of
such Make-Whole Amount.
2.4. Surrender of Notes on Prepayment or Exchange. Subject to
Section 2.5, upon any partial prepayment of a Note pursuant to this Section 2
or partial exchange of a Note pursuant to Section 10.3, such Note may, at the
option of the holder thereof, (i) be surrendered to the Company pursuant to
Section 10.3 in exchange for a new Note or Notes equal to the principal amount
remaining unpaid on the surrendered Note, or (ii) be made available to the
Company, at the Company's principal office, for notation thereon of the portion
of the principal so prepaid or exchanged. No Note shall be issued in lieu of a
Note the entire principal amount of which has been prepaid.
2.5. Direct Payment and Deemed Date of Receipt. Notwithstanding
any other provision contained in the Notes or this Agreement, the Company will
pay all sums becoming due on each Note held by you or any subsequent
Institutional Holder by wire transfer of immediately available funds to such
account as you or such subsequent Institutional Holder have designated in
Schedule I, or as you or such subsequent Institutional Holder may otherwise
designate by notice to the Company (upon which notice the Company may rely
without independent investigation), in each case without presentment and
without notations being made thereon, except that any such Note so paid or
prepaid in full shall be surrendered to the Company for cancellation. Any wire
transfer shall identify such payment in the manner set forth in Schedule I and
shall identify the payment as principal, Make-Whole Amount, if any, and/or
interest. You and any subsequent Institutional Holder of a Note to which this
Section 2.5 applies agree that, before selling or otherwise transferring any
such Note, you or it will make a notation thereon of the aggregate amount of
all payments of principal theretofore made and of the date to which
interest has been paid and, upon written request of the Company, will
provide a copy of such notations to the Company.
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<PAGE> 8
Any payment made pursuant to this Section 2.5 shall be deemed received on the
payment date only if received before 11:00 a.m., Chicago time. Payments
received after 11:00 a.m., Chicago time, shall be deemed received on the next
succeeding Business Day.
2.6. Allocation of Payments.
(a) In the case of a prepayment pursuant to Sections 2.1 or 2.2(a),
if less than the entire principal amount of all the Notes outstanding is to be
paid, the Company will prorate the aggregate principal amount to be paid among
the Notes in proportion to the aggregate unpaid principal amounts thereof.
(b) Any optional prepayment of less than all of the Notes outstanding
pursuant to Section 2.2(a) shall be applied to the outstanding principal amount
of the Notes in inverse order of maturity.
(c) Any optional prepayment pursuant to Section 7.8 or repurchase
pursuant to Section 6.10 of less than all of the Notes outstanding shall be
applied to reduce the principal amount of each of the remaining prepayments
required by Section 2.1 and the payment due at maturity in proportion to the
ratio that the principal amount of such prepayment or repurchase bears to the
principal amount of outstanding Notes immediately prior to such prepayment or
repurchase (after giving effect to any prepayment made pursuant to Secton 2.1
on the date of such prepayment or repurchase). It is the intent of the parties
to this Agreement that each Note shall not be adversely affected in terms of
yield or Weighted Average Life to Maturity by any prepayment pursuant to
Section 7.8 or repurchase purchase to Section 6.10 except as consented to by
the holder of such Note.
2.7. Payments Due on Saturdays, Sundays and Holidays. If the date
of any required prepayment of the Notes or any interest payment date on the
Notes or the date fixed for any other payment of any Note or exchange of any
Note is a day other than a Business Day, then such payment, prepayment or
exchange shall be made on the next succeeding Business Day with interest
payable through the date of payment.
Section 3. REPRESENTATIONS
3.1. Representations of the Company. As an inducement to, and as
part of the consideration for, your purchase of the Notes pursuant to this
Agreement, the Company represents and warrants to you as follows:
(a) Corporate Organization and Authority. The Company is a
solvent corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware, has all requisite corporate power and
authority to own and operate its properties, to carry on its business as now
conducted and as presently proposed to be conducted, to enter into and perform
this Agreement and to issue and sell the Notes as contemplated in this
Agreement. Each of the Guarantors has the corporate power and authority and
the legal right to execute and deliver, and to
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<PAGE> 9
perform its obligations under the Subsidiary Guaranty, and has taken all
necessary corporate action to authorize its execution, delivery and performance
of the Subsidiary Guaranty.
(b) Qualification to Do Business. The Company is duly licensed or
qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction where the nature of the business transacted by it
or the character of its properties owned or leased makes such qualification or
licensing necessary, except for jurisdictions, individually or in the
aggregate, where the failure to be so licensed or qualified could not
reasonably be expected to have a Material Adverse Effect.
(c) Subsidiaries. The Company has no Subsidiaries except those
listed in the attached Annex I, which correctly sets forth the jurisdiction of
incorporation and the percentage of the outstanding Voting Stock or equivalent
interest of each Subsidiary which is owned, of record or beneficially, by the
Company and/or one or more Subsidiaries. Each Subsidiary which is a Restricted
Subsidiary is so designated in Annex I. Each Subsidiary has been duly
organized and is validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization and is duly licensed or qualified
and in good standing as a foreign corporation in each other jurisdiction where
the nature of the business transacted by it or the character of its properties
owned or leased makes such qualification or licensing necessary, except for
jurisdictions, individually or in the aggregate, where the failure to be so
licensed or qualified could not reasonably be expected to have a Material
Adverse Effect. Each Subsidiary has full corporate power and authority to own
and operate its properties and to carry on its business as now conducted and as
presently proposed to be conducted. The Company and each Subsidiary have good
and marketable title to all of the shares they purport to own of the capital
stock of each Subsidiary, free and clear in each case of any Lien.
(d) Financial Statements. The consolidated balance sheets of the
Company and its Subsidiaries as of December 31, 1992 and 1993, and the related
consolidated statements of operations, retained earnings and cash flows for
each of the three years in the period ended December 31, 1993, accompanied by
the reports and unqualified opinion of KPMG Peat Marwick, independent public
accountants, copies of which have heretofore been delivered to you, were
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise noted
therein) and present fairly the consolidated financial condition of the Company
and its Subsidiaries on such dates and their consolidated results of operations
and cash flows for the years then ended. The unaudited consolidated balance
sheets of the Company and its Subsidiaries as of March 31, 1994 and March 31,
1993, and the related unaudited consolidated statements of operations and cash
flows for the three months ended March 31, 1993 and 1994, copies of which have
heretofore been delivered to you, were prepared in accordance with generally
accepted accounting principles and, subject to customary year end audit
adjustments, present fairly the consolidated financial condition of the Company
and its Subsidiaries as of such dates and the consolidated results of their
operations and changes in their cash flows for the periods then ended.
(e) No Contingent Liabilities or Adverse Changes. Except as
disclosed or reflected in the audited consolidated balance sheet of the
Company and its Subsidiaries as at December 31,
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<PAGE> 10
1993 referred to in paragraph (d) above and the notes to consolidated financial
statements thereto and the unaudited consolidated balance sheet of the Company
and its Subsidiaries as at March 31, 1994 referred to in paragraph (d) above,
neither the Company nor any Subsidiary has any contingent liabilities which,
individually or in the aggregate, are material to the Company and its
Subsidiaries taken as a whole, and since December 31, 1993, there have been no
changes in the business, prospects, profits, properties or condition, financial
or otherwise, of the Company and its Subsidiaries except changes occurring in
the ordinary course of business, which, individually or in the aggregate, has
had a Materially Adverse Effect.
(f) No Pending Litigation or Proceedings. There are no actions,
suits or proceedings pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries, at law or in
equity or before or by any Federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, which could reasonably be expected to result, either individually or
in the aggregate, in a Material Adverse Effect.
(g) Compliance with Law.
(i) Neither the Company nor any Subsidiary is: (x) in
default with respect to, or in violation of, any order, writ,
injunction or decree of any court to which it is a named party; or
(y) in default under, or in violation of, any law, rule, regulation,
ordinance or order relating to its or their respective businesses or
properties, the sanctions and penalties resulting from which defaults
or violations described in clauses (x) and (y) could reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.
(ii) Neither the Company nor any Subsidiary nor any
Affiliate of the Company is an entity defined as a "designated
national" within the meaning of the Foreign Assets Control
Regulations, 31 C.F.R. Chapter V, or is in violation of, any Federal
statute or Presidential Executive Order, or any rules or regulations
of any department, agency or administrative body promulgated under any
such statute or Order, concerning trade or other relations with any
foreign country or any citizen or national thereof or the ownership or
operation of any property, and no restriction or prohibition under any
such statute, Order, rule or regulation which could reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.
(h) ERISA. Assuming the representations of the Purchasers in
Section 3.2 of this Agreement are true and accurate, neither the purchase of
the Notes by the Purchasers nor the consummation of the transactions
contemplated by this Agreement is or will constitute a "prohibited transaction"
within the meaning of Section 4975 of the Code or Section 406 of ERISA. The
Internal Revenue Service has issued a determination that each Plan is qualified
under Section 401(a) and related provisions of the Code and that each related
trust or custodial account is exempt from taxation under Section 501(a) of the
Code. All Plans of the Company and its Subsidiaries comply in all material
respects with ERISA and other applicable laws. Within the past five years,
neither the Company nor any Subsidiary has ever maintained or become
obligated to
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<PAGE> 11
contribute to a "multi-employer plan," as defined in Section 4001(a)(3) of
ERISA. The Company and its Subsidiaries have no existing or potential
withdrawal liability or obligation to make contributions, within the meaning of
ERISA, with regard to the "multi-employer" plans which the Company or any
Subsidiary maintained or to which any of them was obligated to contribute more
than five years ago. There exist with respect to all Plans or trusts
established or maintained by the Company or any Subsidiary: (i) no accumulated
funding deficiency within the meaning of ERISA; (ii) no termination of any Plan
or trust which would result in any material liability to the PBGC or any
"reportable event," as that term is defined in ERISA, which is likely to
constitute grounds for termination of any Plan or trust by the PBGC; and
(iii) no "prohibited transaction," as that term is defined in ERISA, which is
likely to subject any Plan, trust or party dealing with any such Plan or trust
to any material tax or penalty on prohibited transactions imposed by
Section 4975 of the Code.
(i) Title to Properties. Except as set forth on Annex II, the
Company and its Subsidiaries have (i) good and marketable title in fee simple
or its equivalent under applicable law to all the real property reflected as
owned by them on the most recent audited balance sheet described in the
foregoing paragraph (d) of this Section 3.1 or subsequently acquired by them
and (ii) good title to all of the personal property reflected in such balance
sheet or subsequently acquired by the Company or its Subsidiaries (except as
sold or otherwise disposed of in the ordinary course of business), in each case
free from all Liens or defects in title except those permitted by Section 7.5.
(j) Leases. The Company and its Subsidiaries enjoy peaceful and
undisturbed possession under all leases under which they are a lessee or are
operating, except for leases the termination of which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(k) Franchises, Patents, Trademarks and Other Rights. The Company
and its Subsidiaries have all franchises, permits, licenses and other authority
necessary to carry on their businesses as now being conducted and are not in
default thereunder, except for such franchises, permits, licenses or other
authority and defaults which, individually or in the aggregate, do not and
could not reasonably be expected to have a Material Adverse Effect. The
Company and its Subsidiaries own or possess all patents, trademarks, service
marks, trade names, copyrights, licenses and rights with respect to the
foregoing necessary for the present conduct of their respective businesses,
without any known conflict with the rights of others which could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(l) Authorization; No Conflict. This Agreement and the Notes have
been duly authorized on the part of the Company and the Agreement does, and the
Notes when issued will, constitute the legal, valid and binding obligations of
the Company, enforceable in accordance with their terms, except to the extent
that enforcement of the Notes may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought in equity or
at law. The Subsidiary Guaranty has been duly authorized on the part of each
of the Guarantors and when executed and delivered will constitute a
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<PAGE> 12
legal, valid and binding obligation of each of the Guarantors, enforceable in
accordance with its terms, except to the extent that enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application relating to or affecting the enforcement of
the rights of creditors or by equitable principles, regardless of whether
enforcement is sought in equity or at law. The sale of the Notes and
compliance by the Company and the Guarantors with all of the provisions of this
Agreement, the Notes and the Subsidiary Guaranty, as the case may be, (i) are
within their respective corporate powers, (ii) have been duly authorized by
proper corporate action, (iii) are legal and will not violate any provisions of
any law or regulation or order of any court, governmental authority or agency
and (iv) will not result in any breach of any of the provisions of, or
constitute a default under, or result in the creation of any Lien on any
property of the Company or any Subsidiary under the provisions of, any charter
document, by-law, loan agreement or other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them or their property
may be bound.
(m) No Defaults. No event has occurred and no condition exists
which, upon the issuance of the Notes, would constitute a Default or an Event
of Default. Neither the Company nor any Subsidiary is in default under any
charter document, by-law, loan agreement or other agreement or instrument to
which it is a party or by which it or its property may be bound, except for
defaults, individually or in the aggregate, which do not, and could not
reasonably be expected to, have a Material Adverse Effect.
(n) Governmental Consent. Neither the nature of the Company or
any of its Subsidiaries, their respective businesses or properties, nor any
relationship between the Company or any of its Subsidiaries and any other
Person, nor any circumstances in connection with the offer, issuance, sale or
delivery of the Notes is such as to require a consent, approval or
authorization of, or withholding of objection on the part of, or filing,
registration or qualification with, any governmental authority on the part of
the Company or any Subsidiary in connection with the execution, delivery and
performance of this Agreement or the Subsidiary Guaranty or the offer,
issuance, sale or delivery of the Notes.
(o) Taxes. All tax returns required to be filed by the Company or
any Subsidiary in any jurisdiction have been filed, and all taxes, assessments,
fees and other governmental charges upon the Company or any Subsidiary, or upon
any of their respective properties, income or franchises, which are due and
payable, have been paid timely or within appropriate extension periods or
contested in good faith by appropriate proceedings and the collection thereof
has been stayed by the applicable governmental authority during the period of
the contest and as to which adequate reserves are maintained in accordance with
generally accepted accounting principles. The Company does not know of any
proposed additional tax assessment against it or any Subsidiary for which
adequate provision has not been made on its books. The respective Federal
income tax liability of the Company and its Subsidiaries have been finally
determined by the Internal Revenue Service and satisfied for all taxable years
up to and including the taxable year ended December 31, 1990 and no material
controversy in respect of additional taxes due since such date is pending or,
to the Company's knowledge, has been threatened. The provisions for taxes on
the books of the Company and each Subsidiary are adequate for all open years
and for the current fiscal period.
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(p) Status under Certain Statutes. Neither the Company nor any
Subsidiary is: (i) a "public utility company" or a "holding company," or an
"affiliate" or a "subsidiary company" of a "holding company," or an "affiliate"
of such a "subsidiary company," as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended, or (ii) a "public utility" as defined
in the Federal Power Act, as amended, or (iii) an "investment company" or an
"affiliated person" thereof or an "affiliated person" of any such "affiliated
person," as such terms are defined in the Investment Company Act of 1940, as
amended.
(q) Private Offering. Neither the Company nor Continental Bank
N.A. (the only Person authorized or employed by the Company as agent, broker,
dealer or otherwise in connection with the offering of the Notes or any similar
security of the Company) has offered any of the Notes or any similar security
of the Company for sale to, or solicited offers to buy any thereof from, or
otherwise approached or negotiated with respect thereto with, any prospective
purchaser, other than not more than 55 institutional investors, including the
Purchasers, each of whom was offered all or a portion of the Notes at private
sale for investment purposes only. Neither the Company nor anyone acting on
its authorization will offer the Notes or any part thereof or any similar
securities for issuance or sale to, or solicit any offer to acquire any of the
same from, anyone so as to bring the issuance and sale of the Notes within the
provisions of Section 5 of the Securities Act.
(r) Effect of Other Instruments. Neither the Company nor any
Subsidiary is bound by any agreement or instrument or subject to any charter or
other corporate restriction which, individually or in the aggregate, (i) in any
way materially restricts any Subsidiary's ability to pay dividends or make
advances to the Company or (ii) has or could reasonably be expected to have a
Material Adverse Effect.
(s) Use of Proceeds. The Company will apply the net proceeds from
the sale of the Notes to repay Indebtedness to banks in the principal amount of
approximately $35,000,000. None of the transactions contemplated in this
Agreement (including, without limitation thereof, the use of the proceeds from
the sale of the Notes) will violate or result in a violation of Section 7 of
the Exchange Act, or any regulations issued pursuant thereto, including,
without limitation, Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System (12 C.F.R., Chapter II). Neither the Company nor any
Subsidiary owns or presently intends to carry or purchase any "margin stock"
within the meaning of Regulation G, and none of the proceeds from the sale of
the Notes will be used to purchase or carry or refinance any borrowing the
proceeds of which were used to purchase or carry any "margin stock" or "margin
security" in violation of Regulations G, T, U or X.
(t) Condition of Property. All of the facilities of the Company
and its Subsidiaries are in sound operating condition and repair except for
facilities being repaired in the ordinary course of business or facilities held
for sale which, individually or in the aggregate, are not material to the
Company and its Subsidiaries, on a consolidated basis.
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<PAGE> 14
(u) Books and Records. The Company and each of its Subsidiaries
(i) maintain books, records and accounts in reasonable detail which accurately
and fairly reflect their respective transactions and business affairs, and
(ii) maintain a system of internal accounting controls sufficient to provide
reasonable assurances that transactions are executed in accordance with
management's general or specific authorization and to permit preparation of
financial statements in accordance with generally accepted accounting
principles.
(v) Environmental Compliance. The operations of the Company and
each Subsidiary (including, without limitation, all operations and conditions
at or in the Facilities) comply in all material respects with all Environmental
Laws; the Company and each Subsidiary have obtained all permits under
Environmental Laws necessary to their respective operations, and all such
permits are in good standing, and the Company and each Subsidiary are in
compliance with all terms and conditions of such permits, except those with
which the failure to comply could not reasonably be expected to have a Material
Adverse Effect; and neither the Company nor any of its Subsidiaries has any
known liability (contingent or otherwise) in connection with any Release of any
Hazardous Materials by the Company or any of its Subsidiaries or the existence
of any Hazardous Material on, under or about any Facility that could give rise
to an Environmental Claim that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(w) Full Disclosure. Neither the Private Placement Memorandum
dated May 1994 (including the enclosures) prepared by Continental Bank N.A.
(the "Memorandum"), the financial statements referred to in paragraph (d) of
this Section 3.1, nor this Agreement, nor any other written statement or
document furnished by the Company to you in connection with the negotiation of
the sale of the Notes, taken together, contain any untrue statement of a
material fact or omit a material fact necessary to make the statements
contained therein or herein not misleading in light of the circumstances under
which they were made. There is no fact (exclusive of general economic,
political or social conditions or trends) particular to the Company and known
by the Company which the Company has not disclosed to you in writing and which
has or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.
(x) Solvency of Company and Guarantors. After giving effect to
the transactions contemplated herein, (i) the present fair salable value of the
assets of each of the Guarantors and of the Company is in excess of the amount
that will be required by each to pay its respective probable liability on its
existing debts as said debts become absolute and matured, (ii) the Company has
received reasonably equivalent value in exchange for executing and delivering
the Notes and each of the Guarantors has received reasonably equivalent value
in exchange for executing and delivering the Subsidiary Guaranty, (iii) the
property remaining in the hands of each is not unreasonably small capital, and
(iv) each is able to pay its debts as they mature.
(y) The current insurance carriers of the Company and its
Restricted Subidiaries and the current ratings assigned to such carriers by
A.M. Best Company, Inc. are shown on Annex VI.
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3.2. Representations of the Purchasers. (a) You represent, and in
entering into this Agreement the Company understands, that you are acquiring
Notes for your own account and not with a view to any distribution thereof;
provided that the disposition of your property shall at all times be and remain
within your control, subject, however, to compliance with Federal securities
laws. You acknowledge that the Notes have not been registered under the
Securities Act and you understand that the Notes must be held indefinitely
unless they are subsequently registered under the Securities Act or an
exemption from such registration is available. You have been advised that the
Company does not contemplate registering, and is not legally required to
register, the Notes under the Securities Act.
(b) You further represent that either: (i) no part of the funds to
be used by you to purchase the Notes will constitute assets allocated to any
separate account maintained by you; or (ii) no part of the funds to be used by
you to purchase the Notes will constitute assets allocated to any separate
account maintained by you such that the application of such funds will
constitute a prohibited transaction under Section 406 of ERISA or Section 4975
of the Code; or (iii) all or a part of such funds will constitute assets of one
or more separate accounts maintained by you, and you have disclosed to the
Company the names of such employee benefit plans whose assets in such separate
account or accounts exceed 10% of the total assets or are expected to exceed
10% of the total assets of such account or accounts as of the date of such
purchase and the Company has advised you in writing that the Company is not a
party-in-interest nor are the Notes employer securities with respect to the
particular employee benefit plans disclosed to the Company by you as aforesaid
(for the purpose of this clause (iii), all employee benefit plans maintained by
the same employer or employee organization are deemed to be a single plan). As
used herein, the terms "separate account," "party-in-interest," "employer
securities," and "employee benefit plan" have the meanings assigned to them in
ERISA.
Section 4. CLOSING CONDITIONS
Your obligation to purchase the Notes on the Closing Date shall be
subject to the performance by the Company of its agreements hereunder, which
are to be performed at or prior to the time of delivery of the Notes, and to
the following conditions to be satisfied on or before the Closing Date:
4.1. Representations and Warranties. The representations and
warranties of the Company and the Guarantors contained in this Agreement and
the Subsidiary Guaranty or otherwise made in writing in connection herewith or
therewith shall be true and correct on or as of the Closing Date and the
Company shall have delivered to you a certificate to such effect, dated the
Closing Date and executed by an executive officer who is involved in financial
matters on a regular basis.
4.2. Legal Opinions. You shall have received from Gardner,
Carton & Douglas, who is acting as your special counsel in this transaction,
and from Lathrop & Norquist, L.C., counsel for the Company and the Guarantors,
and Richard O. Ballentine, Esq., Vice President, General Counsel and Secretary
fo the Company and officer of each of the Guarantors, their respective
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opinions, dated such Closing Date, in form and substance satisfactory to you
and covering substantially the matters set forth or provided in the attached
Exhibits B and C.
4.3. Event of Default. No Default or an Event of Default shall
have occurred and be continuing on the Closing Date, and the Company shall have
delivered to you a certificate to such effect, dated the Closing Date and
executed by an executive officer who is involved in financial matters on a
regular basis.
4.4. Payment of Fees and Expenses. The Company shall have paid all
reasonable fees, expenses, costs and charges, including the fees and expenses
of Gardner, Carton & Douglas, your special counsel, incurred by you and
incident to the proceedings in connection with, and transactions contemplated
by, this Agreement and the Notes.
4.5. Sale of Notes to Other Purchasers. The Company shall have
consummated the sale of the entire $35,000,000 principal amount of the Notes to
be sold on the Closing Date pursuant to this Agreement.
4.6. Subsidiary Guaranty. The Guarantors shall have executed and
delivered the Subsidiary Guaranty.
4.7. Credit Agreement. The Company shall have delivered an
execution copy of the Credit Agreement, as in existence on the Closing Date, to
you.
4.8. Legality of Investment. Your acquisition of the Notes shall
constitute a legal investment as of the Closing Date under the laws and
regulations of each jurisdiction to which you may be subject (without resort to
any "basket" or "leeway" provision which permits the making of an investment
without restrictions as to the character of the particular investment being
made), and such acquisition shall not subject you to any penalty or other
onerous condition in or pursuant to any such law or regulation; and you shall
have received such certificates or other evidence as you may reasonably request
to establish compliance with this condition.
4.9. Private Placement Number. A private placement number with
respect to the Notes shall have been issued by Standard & Poor's Corporation.
4.10. Proceedings and Documents. All proceedings taken in
connection with the transactions contemplated by this Agreement, and all
documents necessary to the consummation of such transactions shall be
satisfactory in form and substance to you and your special counsel, and you and
your special counsel shall have received copies (executed or certified as may
be appropriate) of all legal documents or proceedings which you and they may
reasonably request.
Section 5. INTERPRETATION OF AGREEMENT
5.1. Certain Terms Defined. The terms hereinafter set forth when
used in this Agreement shall have the following meanings:
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Adjusted Consolidated Net Worth - The consolidated stockholders' equity
of the Company and its Restricted Subsidiaries determined in accordance with
generally accepted accounting principles, less, as of any date of
determination, the amount, if any, by which the aggregate outstanding amount of
Restricted Investments made after the Closing Date exceeds 10% of consolidated
stockholders' equity of the Company and its Restricted Subsidiaries.
Affiliate - Any Person (other than a Restricted Subsidiary) (i) who is
a director or executive officer of the Company or any Restricted Subsidiary,
(ii) which directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, the Company, (iii) which
beneficially owns or holds securities representing 5% or more of the combined
voting power of the Voting Stock of the Company or any Subsidiary or (iv) of
which securities representing 5% or more of the combined voting power of the
Voting Stock (or in the case of a Person which is not a corporation, 5% or more
of the equity) are beneficially owned or held by the Company or a Subsidiary.
The term "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Agreement - As defined in Section 1.1.
Bankruptcy Laws - As defined in Section 8.1(h)(ii).
Business Day - Any day, other than Saturday, Sunday or a legal holiday
or any other day on which banking institutions in Chicago, Des Moines or New
York generally are authorized by law to close.
Capitalized Lease - Any lease the obligation for Rentals with respect
to which, in accordance with generally accepted accounting principles, would be
required to be capitalized on a balance sheet of the lessee or for which the
amount of the asset and liability thereunder, as if so capitalized, would be
required to be disclosed in a note to such balance sheet.
Closing Date - As defined in Section 1.2.
Code - The Internal Revenue Code of 1986, as amended.
Consolidated Net Income - For any period, the net income (or deficit)
of the Company and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with generally accepted accounting principles
and after eliminating income or losses attributable to outstanding minority
interests, but excluding in any event (i) net income and losses of any
Restricted Subsidiary accrued prior to the date it became a Restricted
Subsidiary; (ii) net income and losses of any Person (other than a Restricted
Subsidiary), substantially all the assets of which have been acquired in any
manner, realized by such Person prior to the date of such acquisition;
(iii) net income and losses of any Person (other than a Restricted Subsidiary)
with which the Company or a Restricted Subsidiary shall have consolidated or
which shall have merged into or with the Company or a Restricted Subsidiary
prior to the date of such consolidation or merger;
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(iv) net income of any Person (other than a Restricted Subsidiary) in which the
Company or any Restricted Subsidiary has an ownership interest except to the
extent actually received in the form of cash distributions to the Company or
such Restricted Subsidiary; (v) any portion of the net income of any Restricted
Subsidiary which for any reason is legally or contractually unavailable for
payment of cash dividends to the Company or any other Restricted Subsidiary;
(vi) gains or losses resulting from any reappraisal, revaluation, write-up or
write-off of assets; (vii) any gains or losses, or other earnings, properly
classified as extraordinary in accordance with generally accepted accounting
principles; and (viii) any gains or losses on the sale or other disposition of
fixed or capital assets other than in the ordinary course of business, and any
taxes on such excluded gains and any tax deductions or credits on account of
any such excluded losses.
Consolidated Total Assets - The consolidated assets of the Company and
its Restricted Subsidiaries determined in accordance with generally accepted
accounting principles.
Consolidated Total Capitalization - The sum of Adjusted Consolidated
Net Worth and Funded Debt.
Credit Agreement - That certain Credit Agreement among the Company,
certain Lenders (as identified therein) and Nationsbank of Texas, N.A., as
Administrative Lender, dated as of June 28, 1994, as such agreement may be
amended, modified, supplemented or restated from time to time.
Default - Any event which, with the lapse of time or the giving of
notice, or both, would become an Event of Default.
Determination Date - The Business Day immediately preceding the date
fixed for a prepayment pursuant to Section 2.2(a) or Section 7.8 or the date of
declaration pursuant to Section 8.2.
Disposition - As defined in Section 7.8(a).
Environmental Claim - Any notice of violation, claim, demand,
abatement order or other order by any governmental authority or any Person for
any damage, including, without limitation, personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, resulting from or based upon (i) the
existence of a Release (whether sudden or non-sudden or accidental or
non-accidental) of, or exposure to, any Hazardous Material in, into or onto the
environment at, in, by, from or related to any Facility, (ii) the use,
handling, transportation, storage, treatment or disposal of Hazardous Materials
in connection with the operation of any Facility, or (iii) the violation, or
alleged violation, of any statutes, ordinances, orders, rules, regulations,
permits, licenses or authorizations of or from any governmental authority,
agency or court relating to environmental matters connected with the
Facilities.
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Environmental Laws - All laws relating to environmental matters,
including, without limitation, those relating to (i) fines, orders,
injunctions, penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release or threatened Release of
Hazardous Materials and to the generation, use, storage, transportation, or
disposal of Hazardous Materials, in any manner applicable to the Company or any
of its Subsidiaries or any or their respective properties, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9601 et seq.), the Hazardous Material
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section
2601 et seq.), the Occupational Safety and Health Act (29 U.S.C. Section 651
et seq.), and the Emergency Planning and Community Right-to-Know Act (42 U.S.C.
Section 11001 et seq.), and (ii) environmental protection, including, without
limitation, the National Environmental Policy Act (42 U.S.C. Section 4321 et
seq.), and comparable state laws, each as amended or supplemented, and any
similar or analogous local, state and federal statutes and regulations
promulgated pursuant thereto, each as in effect as of the date of
determination.
ERISA - The Employee Retirement Income Security Act of 1974, as
amended from time to time and any successor statute.
ERISA Affiliate - The Company and (i) any corporation that is a member
of a controlled group of corporations within the meaning of Section 414(b) of
the Code of which the Company is a member; (ii) any trade or business (whether
or not incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Code of which the
Company is a member; and (iii) any member of an affiliated service group within
the meaning of Section 414(m) or (o) of the Code of which the Company, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member.
Event of Default - As defined in Section 8.1.
Exchange Act - The Securities Exchange Act of 1934, as amended, and as
it may be further amended from time to time.
Foreign Subsidiaries - The Subsidiaries which are organized,
established or maintained outside of the United States of America.
Facilities - Any real property (including, without limitation, all
buildings, fixtures or other improvements located thereon) now, or heretofore
or hereafter, owned, leased, operated or used (under permit or otherwise) by
the Company or any of its Subsidiaries or any of their respective predecessors.
Funded Debt - Of any Person, (i) all Indebtedness (other than
Capitalized Lease Obligations and Guaranties) having a final maturity of one
year or more from the date of origin thereof (or which is renewable or
extendible at the option of the obligor for a period or periods more than one
year from the date of origin), including current maturities, whether or not
included
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as current liabilities on the balance sheet of such Person prepared in
accordance with generally accepted accounting principles, (ii) all Capitalized
Lease Obligations of such Person, and (iii) all Guaranties of Indebtedness of
others (except Guaranties by the Company or any Restricted Subsidiary of Funded
Debt of a Restricted Subsidiary and Guaranties by a Restricted Subsidiary of
Funded Debt of the Company or another Restricted Subsidiary) having a final
maturity of one year or more from the date of origin thereof (or which is
renewable or extendible at the option of the obligor for a period or periods
more than one year from the date of origin).
Guaranties - All obligations (other than endorsements in the ordinary
course of business of negotiable instruments for deposit or collection) of a
Person guaranteeing or, in effect, guaranteeing any Indebtedness, dividend or
other obligation of any other Person in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through an
agreement, contingent or otherwise, by such Person: (i) to purchase such
Indebtedness or obligation or any property or assets constituting security
therefor, (ii) to advance or supply funds (x) for the purchase or payment of
such Indebtedness or obligation, (y) to maintain working capital or other
balance sheet condition or (z) otherwise to advance or make available funds for
the purchase or payment of such Indebtedness or obligation, (iii) to lease
property or to purchase securities or other property or services primarily for
the purpose of assuring the owner of such Indebtedness or obligation against
loss in respect thereof, or (iv) otherwise to assure the owner of the
Indebtedness or obligation against loss in respect thereof. For the purposes
of all computations made under this Agreement, Guaranties in respect of any
Indebtedness for borrowed money shall be deemed to be Indebtedness equal to the
principal amount of such Indebtedness for borrowed money which has been
guaranteed, and Guaranties in respect of any other obligation or liability or
any dividend shall be deemed to be Indebtedness equal to the maximum aggregate
amount of such obligation, liability or dividend.
Guarantors - BMC Real Estate, Inc., BUCON, Inc., Butler Real Estate,
Inc., Butler Holdings, Inc., and Lester's of Minnesota, Inc., each of which is
a Subsidiary listed on Annex I.
Hazardous Materials - (i) Any chemical, material or substance defined
as or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous waste," "restricted hazardous
waste," or "toxic substances" or words of similar import under any applicable
Environmental Laws; (ii) any oil, petroleum or petroleum derived substance, any
drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, any flammable substances
or explosives, any radioactive materials, any hazardous wastes or substances,
any toxic wastes or substances or any other materials or pollutants that (a)
pose a hazard to any property of the Company or any of its Subsidiaries or to
Persons on or about such property or (b) cause such property to be in violation
of any Environmental Laws; (iii) friable asbestos, urea formaldehyde foam
insulation, electrical equipment which contains any oil or dielectric fluid
containing levels of polychlorinated biphenyls in excess of fifty parts per
million; and (iv) any other chemical, material or substance, exposure to which
is prohibited, limited or regulated by any governmental authority.
Indebtedness - For any Person, without duplication, all (i) obligations
for borrowed money or to pay the deferred purchase price of property or
assets (except trade account payables
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paid in the ordinary course), (ii) obligations secured by any Lien upon
property or assets owned by such Person, even though such Person has not
assumed or become liable for the payment of such obligations, (iii) obligations
created or arising under any conditional sale or other title retention
agreement with respect to property acquired, notwithstanding the fact that the
rights and remedies of the seller, lender or lessor under such agreement in the
event of default are limited to repossession or sale of property,
(iv) Capitalized Lease Obligations, and (v) Guaranties of obligations of others
of the character referred to in this definition.
Institutional Holder - Any bank, trust company, insurance company,
pension fund, mutual fund or other similar financial institution, including,
without limiting the foregoing, any "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act, which is or becomes a holder of
any Note.
Investment - All investments made in cash or by delivery of property,
directly or indirectly, in any Person, whether by acquisition of shares of
capital stock, indebtedness or other obligations or securities or by loan,
advance, capital contribution or otherwise; provided, however, that
"Investments" shall not mean or include investments in property to be used,
held for use or consumed in the ordinary course of business.
Lien - Any mortgage, pledge, security interest, encumbrance, lien,
hypothecation, attachment or charge of any kind, including any agreement to
grant any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, any Capitalized Lease, and the
filing of or agreement to file any financing statement under the Uniform
Commercial Code of any jurisdiction in connection with any of the foregoing,
but excluding precautionary filings in connection with leases which are not
Capitalized Leases.
Make-Whole Amount - As of any Determination Date, if the Reinvestment
Yield on such Determination Date is lower than the interest rate payable on or
in respect of the Notes, the excess of (a) the present value of the principal
and interest payments to be foregone by any prepayment (exclusive of accrued
interest on such Notes through the date of prepayment) on such Notes to be
prepaid (taking into account the manner of application of such prepayment
required by Section 2.2(b)), determined by discounting (semi-annually on the
basis of a 360-day year composed of twelve 30-day months), such payments at a
rate that is equal to the Reinvestment Yield over (b) the aggregate principal
amount of such Notes then to be paid or prepaid. To the extent that the
Reinvestment Yield on any Determination Date is equal to or higher than the
interest rate payable on or in respect of such Notes, the Make-Whole Amount is
zero.
Material Adverse Effect - (i) A material adverse effect on the
business, properties, assets, results of operations, prospects or condition,
financial or otherwise, of the Company and its Subsidiaries, taken as a whole,
(ii) the material impairment of the ability of the Company to perform its
obligations under this Agreement or the Notes, (iii) the material impairment of
the ability of any Guarantor or group of Guarantors, which individually or
collectively are material to the Company and its Subsidiaries as a whole, to
perform its or their obligations under the Subsidiary Guaranty, or (iv) the
impairment of the ability of the holders of the Notes to enforce any of such
obligations.
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Memorandum - As defined in Section 3.1(w).
Notes - As defined in Section 1.1.
PBGC - The Pension Benefit Guaranty Corporation or any successor
thereto.
Person - Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Plan - Any employee pension benefit plan, as defined in Section 3(2) of
ERISA, that has been established by, or contributed to, or is maintained by the
Company or any ERISA Affiliate.
Purchase - As defined in Section 1.1.
Reinvestment Yield - The sum of (i) 0.50% plus (ii) the yield as
compiled by and published on Telerate Page 5 (or other on-the-run service
acceptable to the holders of not less than a majority in principal amount of
the outstanding Notes) at 11:00 A.M. (Chicago time) on the Determination Date
for U.S. Treasury Securities having a maturity equal to the Weighted Average
Life to Maturity of the Notes then being prepaid or paid as of the date of
prepayment or payment, rounded to the nearest month, or if such yields shall
not be reported as of such time or the yields reported as of such time are not
ascertainable in accordance with the preceding clause, then the arithmetic mean
of the yields published in the statistical release designated H.15(519) of the
Board of Governors of the Federal Reserve System under the caption "U.S.
Government Securities--Treasury Constant Maturities" (the "statistical
release") for the maturity corresponding to the remaining Weighted Average Life
to Maturity of the Notes then being prepaid or paid as of the date of such
prepayment or payment rounded to the nearest month. For purposes of
calculating the Reinvestment Yield, the most recent weekly statistical release
published prior to the applicable Determination Date shall be used. If no
maturity exactly corresponding to such rounded Weighted Average Life to
Maturity shall appear in the statistical release, or in any or other acceptable
service, yields for the two most closely corresponding published maturities
(one of which occurs prior and the other subsequent to the Weighted Average
Life to Maturity) shall be calculated pursuant to this provision and the
Reinvestment Yield shall be interpolated from such yields on a straight-line
basis (rounding in each of such relevant periods, to the nearest month).
Release - Any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment (including, without
limitation, the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Materials), or into or out of any
Facility, including the movement of any Hazardous Material through the air,
soil, surface water, groundwater or property.
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Rentals - As of the date of any determination thereof, all fixed
payments (including all payments which the lessee is obligated to make to the
lessor on termination of the lease or surrender of the property) payable by the
Company or a Restricted Subsidiary, as lessee or sublessee under a lease of
real or personal property, but exclusive of any amounts required to be paid by
the Company or a Restricted Subsidiary (whether or not designated as rents or
additional rents) on account of maintenance, repairs, insurance, taxes,
assessments, amortization and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed on the basis of the minimum rents, if
any, required to be paid by the lessee, regardless of sales volume or gross
revenues.
Restricted Investment - Any Investment by the Company or any
Subsidiary other than the following:
(i) Investments existing as of the date of this Agreement
which are listed in the attached Annex IV;
(ii) Investments in Restricted Subsidiaries or in Persons
which, simulta-neously with such Investment, become Restricted
Subsidiaries;
(iii) Investments in certificates of deposit, time deposits
and banker's acceptances with final maturities of one year or less
issued by Continental Bank N.A. or United States or Canadian
commercial banks that are rated within the 2 highest rating
classifications by Standard & Poor's Corporation or Moody's Investors
Service, Inc. or, in the case of a Canadian bank, by Thomson Bank
Watch;
(iv) Investments in commercial paper maturing within
270 days of the date of issuance and rated "A-2" or better by Standard
& Poor's Corporation or "P-2" or better by Moody's Investors Service,
Inc.;
(v) Investments in direct obligations of the United
States of America or in obligations of an agency thereof carrying the
full faith and credit of the United States of America or in direct
obligations of the Canadian government, in each case maturing within
3 years from the date of issuance;
(vi) Investments in money market investment programs which
are properly classifiable as current assets in accordance with
generally accepted accounting principles;
(vii) Investments in municipal or Canadian provincial
securities maturing within 3 years of the date of acquisition and
rated AA- or better by Standard & Poor's Corporation or Aa3 or better
by Moody's Investors Service, Inc., or their short-term equivalent
ratings, or, in the case of Canadian provincial securities, rated
within the 2 highest classifications of the leading provincial rating
agency; and
(viii) Relocation, travel and similar advances to employees
made in the ordinary course of business consistent with past practice.
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Restricted Subsidiary - Any Subsidiary so designated in Annex I and
any other Subsidiary that is subsequently so designated by resolution of the
Board of Directors of the Company, provided that such Subsidiary has not
theretofore been designated a Restricted Subsidiary.
Securities Act - The Securities Act of 1933, as amended, and as it may
be further amended from time to time.
Short-Term Debt - All Indebtedness other than Funded Debt.
Subsidiary - Any corporation of which shares of Voting Stock
representing more than 50% of the combined voting power of each outstanding
class of Voting Stock are owned or controlled, directly or indirectly, by the
Company.
Subsidiary Guaranty - The Subsidiary Guaranty, executed by the
Guarantors, substantially in the form of Exhibit D, as such agreement may be
amended, modified, supplemented or restated from time to time.
Unrestricted Subsidiary - Any Subsidiary that is not designated a
Restricted Subsidiary.
Voting Stock - Capital stock of any class of a corporation having power
to vote under ordinary circumstances for the election of members of the board
of directors of such corporation, or persons performing similar functions,
irrespective of whether or not at the time any class shall have special voting
power or rights as the result of the occurrence of any contingency.
Weighted Average Life to Maturity - As applied to any payment or
prepayment of principal of the Notes, at any date, the number of years obtained
by dividing (a) the principal amount of the Notes to be paid or prepaid into
(b) the sum of the products obtained by multiplying (i) the amount of each then
remaining required prepayment, including payment at final maturity, forgone by
virtue of such payment or prepayment, by (ii) the number of years (calculated
to the nearest 1/12th) which would have elapsed between such date and the
making of such required prepayment or payment.
Wholly-Owned - When applied to a Subsidiary, any Subsidiary 100% of the
Voting Stock of which is owned by the Company and/or its Wholly-Owned
Subsidiaries, other than directors' qualifying shares or, in the case of
Subsidiaries organized under the laws of a jurisdiction other than the United
States of America or any State thereof, nominal shares held by foreign
nationals in accordance with local law.
Terms which are defined in other Sections of this Agreement shall have
the meanings specified therein.
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5.2. Accounting Principles. Where the character or amount of any
asset or liability or item of income or expense is required to be determined or
any consolidation or other accounting computation is required to be made for
the purposes of this Agreement, the same shall be done in accordance with (and
references elsewhere in this Agreement to generally accepted accounting
principles shall mean) United States generally accepted accounting principles
in effect from time to time, except where such principles are inconsistent with
any accounting treatment or computation required by this Agreement.
5.3. Valuation Principles. Except where indicated expressly to the
contrary by the use of terms such as "fair value," "fair market value" or
"market value," each asset, each liability and each capital item of any Person,
and any quantity derivable by a computation involving any of such assets,
liabilities or capital items, shall be taken at the net book value thereof for
all purposes of this Agreement. "Net book value" with respect to any asset,
liability or capital item of any Person shall mean the amount at which the same
is recorded or, in accordance with generally accepted accounting principles,
should have been recorded in the books of account of such Person, as reduced by
any reserves which have been or, in accordance with generally accepted
accounting principles, should have been set aside with respect thereto, but in
every case (whether or not permitted in accordance with generally accepted
accounting principles) without giving effect to any write-up, write-down or
write-off (other than any write-down or write-off the entire amount of which
was charged to Consolidated Net Income or to a reserve which was a charge to
Consolidated Net Income) relating thereto which was made after the date of this
Agreement.
5.4. Direct or Indirect Actions. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action
in question is taken directly or indirectly by such Person.
Section 6. AFFIRMATIVE COVENANTS
The Company agrees that, for so long as any amount remains unpaid on
any Note:
6.1. Corporate Existence. The Company will, and will cause each
Restricted Subsidiary to, maintain and preserve, its corporate existence and
right to carry on its business and use, and the Company will, and will cause
each Restricted Subsidiary to maintain, preserve, renew and extend all of its
rights, powers, privileges, franchises, licenses and permits necessary to the
proper conduct of its business; provided, however, that the foregoing shall not
prevent any transaction permitted by Section 7.7 or Section 7.8.
6.2. Insurance. The Company will, and will cause each Restricted
Subsidiary to, maintain insurance coverage with financially sound and reputable
insurers in such forms and amounts, with such deductibles and against such
risks as are required by law or sound business practice and are customary for
corporations engaged in the same or similar businesses and owning and operating
similar properties as the Company and its Subsidiaries.
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6.3. Taxes, Claims for Labor and Materials. The Company will, and
will cause each Restricted Subsidiary to, pay and discharge when due, all
taxes, assessments and governmental charges or levies imposed upon it or its
property or assets, or upon properties leased by it (but only to the extent
required to do so by the applicable lease), trade accounts, and claims for
work, labor or materials, other than taxes, assessments, charges, levies,
accounts or claims which, individually or in the aggregate, are not material in
amount or the non-payment of which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, provided that neither
the Company nor any Restricted Subsidiary shall be required to pay any such
tax, assessment, charge, levy, account or claim, the payment of which is being
contested in good faith and by proper proceedings that will stay the forfeiture
or sale of any property and with respect to which adequate reserves are
maintained in accordance with generally accepted accounting principles.
6.4. Maintenance of Properties. The Company will, and will cause
each Restricted Subsidiary to, maintain, preserve and keep its properties
(whether owned in fee or a leasehold interest) in good repair and working
order, ordinary wear and tear excepted, and from time to time will make all
necessary repairs, replacements, renewals and additions.
6.5. Maintenance of Records. The Company will, and will cause each
Restricted Subsidiary to, keep at all times proper books of record and account
in which full, true and correct entries will be made of all dealings or
transactions of or in relation to the business and affairs of the Company or
such Restricted Subsidiary, in accordance with generally accepted accounting
principles consistently applied throughout the period involved (except for such
changes as are disclosed in such financial statements or in the notes thereto),
and the Company will, and will cause each Restricted Subsidiary to, provide
reasonable protection against loss or damage to such books of record and
account.
6.6. Financial Information and Reports. The Company will furnish
to you and to any other Institutional Holder (in duplicate if you or such other
holder so request) the following:
(a). As soon as available and in any event within 45 days after the
end of each of the first three quarterly accounting periods of each fiscal year
of the Company, a consolidated balance sheet of the Company and its Restricted
Subsidiaries as of the end of such period and consolidated statements of
operations of the Company and its Restricted Subsidiaries for the periods
beginning on the first day of such fiscal year and the first day of such
quarterly accounting period and a consolidated statement of cash flows
beginning on the first day of such fiscal year and ending on the date of such
balance sheet, setting forth in comparative form (x) the corresponding
consolidated statements of operations for the corresponding periods of the
preceding fiscal year, (y) the corresponding consolidated statements of cash
flows for the corresponding year to date period of the preceding fiscal year
and (z) a consolidated balance sheet as of the end of the preceding fiscal
year, all in reasonable detail prepared in accordance with generally accepted
accounting principles consistently applied throughout the period involved
(except for changes disclosed in such financial statements or in the notes
thereto) and certified by the chief financial officer or chief accounting
officer of the Company (i) outlining the basis of presentation, and
(ii) stating that the information
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presented in such statements presents fairly the financial position of the
Company and its Restricted Subsidiaries and the results of operations for the
period, subject to customary year-end audit adjustments;
(b) As soon as available and in any event within 90 days after the
last day of each fiscal year, a consolidated balance sheet of the Company and
its Restricted Subsidiaries as of the end of such fiscal year and the related
consolidated statements of operations, retained earnings and cash flows for
such fiscal year, in each case setting forth in comparative form figures for
the preceding fiscal year, all in reasonable detail, prepared in accordance
with generally accepted accounting principles consistently applied throughout
the period involved (except for changes disclosed in such financial statements
or in the notes thereto) and accompanied by a report, unqualified as to scope
of audit and unqualified as to going concern as to the consolidated balance
sheet and the related consolidated statements of operations, retained earnings
and cash flows, of KPMG Peat Marwick or any other firm of independent public
accountants of recognized national standing selected by the Company to the
effect that such financial statements have been prepared in conformity with
generally accepted accounting principles and present fairly, in all material
respects, the financial position of the Company and its Restricted Subsidiaries
and that the examination of such financial statements by such accounting firm
has been made in accordance with generally accepted auditing standards;
(c) Together with the financial statements delivered pursuant to
paragraphs (a) and (b) of this Section 6.6, (i) a management's discussion and
analysis of the financial condition and results of operations for the periods
reported upon by such financial statements, which discussion and analysis shall
satisfy the requirements of Item 303 of Securities and Exchange Commission
Regulation S-K, and (ii) a certificate of the chief financial officer or chief
accounting officer, (x) to the effect that such officer has re-examined the
terms and provisions of this Agreement and that, to the best knowledge of such
officer after due inquiry, at the date of such certificate, during the periods
covered by such financial reports and as of the end of such periods, the
Company is not, or was not, in default in the fulfillment of any of the terms,
covenants, provisions and conditions of this Agreement and that no Default or
Event of Default is occurring or has occurred as of the date of such
certificate, during such periods and as of the end of such periods, or if the
signer is aware of any Default or Event of Default, such officer shall disclose
in such statement the nature thereof, its period of existence and what action,
if any, the Company has taken or proposes to take with respect thereto, and
(y) stating whether, to the best knowledge of such officer after due inquiry,
the Company is in compliance with Sections 7.1 through 7.13 and setting forth,
in sufficient detail, the information and computations required to establish
whether or not the Company was in compliance with the requirements of Sections
7.1 through 7.9 during the periods covered by the financial reports then being
furnished and as of the end of such periods;
(d) Together with the financial reports delivered pursuant to
paragraph (b) of this Section 6.6, an opinion of the independent certified
public accountants stating (i) that in making the examination necessary for
expressing an opinion on such financial statements, nothing came to their
attention that caused them to believe that there is in existence or has
occurred any Default or Event of Default hereunder (the occurrence of which is
ascertainable by accountants in the course of normal audit procedures) or, if
such accountants shall have obtained knowledge of any such Default or Event of
Default, describing the nature thereof and the length of time it has existed;
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(e) Promptly after the Company obtains knowledge thereof, notice
of any litigation or any governmental proceeding pending against the Company or
any Subsidiary in which, individually or in the aggregate, liability could
reasonably be expected to exceed $3,000,000 or which could reasonably be
expected to otherwise have a Material Adverse Effect;
(f) As soon as available and in any event within 15 days after the
filing or mailing thereof, copies of each financial statement, notice, report
and proxy statement which the Company shall furnish to its stockholders; copies
of each registration statement and periodic report, including but not limited
to Forms 8-K, 10-K and 10-Q, which the Company may file with the Securities and
Exchange Commission, and any other similar or successor agency of the Federal
government administering the Securities Act, the Exchange Act or the Trust
Indenture Act of 1939, as amended; without duplication, copies of each report
(other than reports relating solely to the issuance of, or transactions by
others involving, its securities) relating to the Company or its securities
which the Company may file with any securities exchange on which any of the
Company's securities may be registered; copies of any orders in any material
proceedings to which the Company or any of its Subsidiaries is a party, issued
by any governmental agency, Federal or state, having jurisdiction over the
Company or any of its Subsidiaries; and, except at such times as the Company is
a reporting company under Section 13 or 15(d) of the Exchange Act or has
complied with the requirements for the exemption from registration under the
Exchange Act set forth in Rule 12g-3-2(b), such financial or other information
as any holder of the Notes or prospective purchaser of the Notes may reasonably
determine is required to permit such holder to comply with the requirements of
Rule 144A under the Securities Act in connection with the resale by it of the
Notes;
(g) As soon as available, a copy of each other report submitted to
the Company or any Restricted Subsidiary by independent accountants retained by
the Company or any Restricted Subsidiary in connection with any interim or
special audit made by them of the books of the Company or any Restricted
Subsidiary;
(h) Promptly following any change in the composition of the
Company's Subsidiaries from that set forth in Annex I, as theretofore updated
pursuant to this paragraph, an updated list setting forth the information
specified in Annex I; and
(i) Such additional information as you or such other Institutional
Holder of the Notes may reasonably request concerning the Company and its
Subsidiaries.
6.7. Inspection of Properties and Records. The Company will, and
will cause each Restricted Subsidiary to, permit any representative of you or
any other Institutional Holder, from the date hereof and until payment in full
of the Notes, to visit and inspect any of their properties, to examine their
books of account (including, without limitation, the financial and reporting
systems of the Company and its Restricted Subsidiaries), records, reports and
other papers, to make copies and extracts therefrom and to discuss their
affairs, finances and accounts with their officers and independent public
accountants (and by this provision the Company and its Restricted Subsidiaries
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authorize such accountants to discuss with you or such Institutional Holder
their affairs, finances and accounts), all at such reasonable times and with
reasonable notice and as often as you or such Institutional Holder may
reasonably request, and if at the time thereof a Default or Event of Default
has occurred and is continuing, at the Company's expense.
6.8. ERISA.
(a) All assumptions and methods used to determine the actuarial
valuation of employee benefits, both vested and unvested, under each Plan
subject to Title IV of ERISA and each such Plan, whether now existing or
adopted after the date hereof, will comply in all material respects with ERISA.
(b) The Company will not at any time permit any Plan established,
maintained or contributed to by it or any Restricted Subsidiary in the United
States or any ERISA Affiliate to:
(i) engage in any "prohibited transaction" as such term
is defined in Section 4975 of the Code or in Section 406 of ERISA;
(ii) incur any "accumulated funding deficiency" as such
term is defined in Section 302 of ERISA, whether or not waived; or
(iii) be terminated under circumstances which are likely to
result in the imposition of a lien on the property of the Company or
any such Restricted Subsidiary pursuant to Section 4068 of ERISA,
if the event or condition described in clauses (i), (ii) or (iii) above is
likely to subject the Company or any Restricted Subsidiary or ERISA Affiliate
to liabilities which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(c) Upon request, the Company will furnish you or any other
Institutional Holder a copy of the annual report of each Plan (Form 5500)
required to be filed with the Internal Revenue Service no later than 45 days
after the date such report has been filed with the Internal Revenue Service.
(d) Promptly upon obtaining knowledge of the occurrence thereof,
the Company will give you and each other Institutional Holder notice of (i) a
reportable event with respect to any Plan; (ii) the institution of any steps by
the Company, any Restricted Subsidiary, any ERISA Affiliate or the PBGC to
terminate any Plan; (iii) the institution of any steps by the Company, any
Restricted Subsidiary, or any ERISA Affiliate to withdraw from any Plan; (iv) a
prohibited transaction in connection with any Plan; (v) any material increase
in the contingent liability of the Company or any Restricted Subsidiary with
respect to any post-retirement welfare liability; or (vi) the taking of any
action by the Internal Revenue Service, the Department of Labor or the PBGC or
any other Person with respect to any of the foregoing which, individually or in
the aggregate, in any of the events specified above, could reasonably be
expected to result in a Material Adverse Effect.
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6.9. Compliance with Laws.
(a) The Company will, and will cause each Subsidiary to, comply
with all laws, rules and regulations, including Environmental Laws, relating to
its or their respective businesses, other than laws, rules and regulations the
failure to comply with which or the sanctions and penalties resulting
therefrom, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect; provided, however, that the Company and its
Subsidiaries shall not be required to comply with laws, rules and regulations
the validity or applicability of which are being contested in good faith and by
appropriate proceedings which stay the enforcement thereof and as to which the
Company has established adequate reserves on its books in accordance with
generally accepted accounting principles.
(b) Promptly upon the occurrence thereof, the Company will give
you and each other Institutional Holder notice of the institution of any
proceedings against the Company or any Subsidiary, or the receipt of notice of
any Environmental Claim, which if determined adversely could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
6.10. Acquisition of Notes. Neither the Company nor any Subsidiary
or Affiliate, directly or indirectly, will repurchase or offer to repurchase
any Notes unless the offer is made to repurchase Notes pro rata from all
holders at the same time and on the same terms. Any repurchase of less than
all of the Notes outstanding shall be applied in accordance with Section 2.6.
The Company will forthwith cancel any Notes in any manner or at any time
acquired by the Company or any Subsidiary or Affiliate and such Notes shall not
be deemed to be outstanding for any of the purposes of this Agreement or the
Notes.
6.11. Private Placement Number; NAIC. The Company consents to
(i) the filing of copies of this Agreement with Standard & Poor's Corporation
to obtain a private placement number and with the National Association of
Insurance Commissioners and (ii) the filing of copies of the financial
statements delivered pursuant to Section 6.6(b) with the National Association
of Insurance Commissioners.
Section 7. NEGATIVE COVENANTS
The Company agrees that, for so long as any amount remains unpaid on
any Note:
7.1. Adjusted Consolidated Net Worth. The Company will not permit
at any time its Adjusted Consolidated Net Worth to be less than $50,000,000.
7.2. Funded Debt. The Company will not, and will not permit any
Restricted Subsidiary to, create, assume, incur, or otherwise become liable
for, directly or indirectly, any Funded Debt other than:
(a) the Notes;
(b) Funded Debt of the Company and its Restricted Subsidiaries
outstanding on the Closing Date and described in the attached Annex IV;
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(c) Funded Debt of the Company to a Restricted Subsidiary or
Funded Debt of a Restricted Subsidiary to the Company or another Restricted
Subsidiary; and
(d) additional Funded Debt, provided that at the time of incurring
such additional Funded Debt and after giving effect thereto and to the
application of the proceeds therefrom, the Funded Debt of the Company and its
Restricted Subsidiaries then to be outstanding does not exceed 55% of
Consolidated Total Capitalization.
7.3. Short-Term Debt. The Company will not, and will not permit
any Restricted Subsidiary to, create, assume, incur or otherwise become liable
for, directly or indirectly, any Short-Term Debt unless during the 12 calendar
months immediately preceding such incurrence there shall have been a period of
30 consecutive days during which either (i) there was no Short-Term Debt of the
Company and its Restricted Subsidiaries outstanding or (ii) the average amount
of Short-Term Debt of the Company and its Restricted Subsidiaries during such
30-day period could have been incurred as Funded Debt pursuant to
Section 7.2(d).
7.4. Funded Debt of Subsidiaries. The Company will not permit any
Restricted Subsidiary to permit to create, assume, incur, or otherwise become
liable for, directly or indirectly, any additional Indebtedness, other than
Indebtedness to the Company or another Restricted Subsidiary, unless, at the
time of incurring such additional Indebtedness and after giving effect thereto
and to the application of the proceeds therefrom,
(a) such Indebtedness may be incurred pursuant to Sections 7.2(c)
or 7.3;
(b) the aggregate outstanding Indebtedness of Restricted
Subsidiaries whose activities are primarily carried on outside the United
States of America and Canada does not exceed $5,000,000; and
(c) the aggregate outstanding Indebtedness of Restricted
Subsidiaries not permitted by clause (b) does not exceed 15% of Consolidated
Total Capitalization.
7.5. Liens. The Company will not, and will not permit any
Restricted Subsidiary to, permit to exist, create, assume or incur, directly or
indirectly, any Lien on its properties or assets, whether now owned or
hereafter acquired, except:
(a) Liens existing on property or assets of the Company or any
Restricted Subsidiary as of the Closing Date that are described in the attached
Annex V and Liens resulting from extensions, renewals, refinancings and
refundings of Indebtedness secured by such Liens, provided that there is no
increase in the principal amount of the Indebtedness secured thereby at the
time of extension, renewal, refinancing or refunding, and any new Lien attaches
only to the property which was subject to such Lien at the time of such
extension, renewal, refinancing or refunding; provided that this clause (a)
shall not permit any Liens securing Indebtedness owed to banks;
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(b) Liens for taxes, assessments or governmental charges or levies
not then due and delinquent or the validity of which is being contested in good
faith by appropriate proceedings which stay the enforcement thereof and as to
which the Company has established adequate reserves on its books in accordance
with generally accepted accounting principles;
(c) Liens arising in connection with any legal proceeding,
provided the execution of such Liens is effectively stayed and such Liens are
being contested in good faith by appropriate proceedings and as to which the
Company has established adequate reserves on its books in accordance with
generally accepted accounting principles;
(d) Liens arising in the ordinary course of business and not
incurred in connection with the borrowing of money, including encumbrances in
the nature of survey exceptions, zoning restrictions, easements, rights and
restrictions of record on the use of real property, statutory landlord's and
lessor's liens and mechanics' and materialmen liens in the ordinary course of
business, which in the aggregate do not materially interfere with the conduct
of the business of the Company and its Subsidiaries taken as a whole or
materially impair the value of the property subject thereto for the purpose of
such business;
(e) Liens securing Indebtedness of a Restricted Subsidiary to the
Company;
(f) Liens (i) existing on tangible property at the time of its
acquisition by the Company or a Restricted Subsidiary and not created in
contemplation thereof, whether or not the Indebtedness secured by such Lien is
assumed by the Company or such Restricted Subsidiary, or (ii) on tangible
property created substantially contemporaneously with the date of acquisition
or within 180 days of the acquisition or completion of construction thereof to
secure or provide for all or a portion of the purchase price or cost of
construction of such tangible property, or (iii) existing on tangible property
of a Person at the time such Person is merged into or consolidated with or is
acquired by, or substantially all of its tangible assets are acquired by, the
Company or a Restricted Subsidiary and not created in contemplation thereof, or
(iv) on documents of title, policies or certificates of insurance and other
documents accompanying or related to instruments drawn under the letter of
credit facility under the Credit Agreement, or property shipped under or in
connection with the letter of credit facility under the Credit Agreement , or
(v) renewals, extensions or replacements of such Liens; provided, in each case,
that (x) the incurrence of the Indebtedness secured by such Liens does not
violate or conflict with any other provision of this Agreement, (y) such Liens
do not extend to other property of the Company or any Restricted Subsidiary and
(z) the aggregate principal amount of Indebtedness secured by each such Lien
does not exceed 100% of the cost or fair market value of the tangible property
subject thereto;
(g) Liens not otherwise permitted by paragraphs (a) through (f)
above incurred subsequent to the Closing Date to secure Indebtedness; provided
that (i) the Indebtedness of the Company and its Restricted Subsidiaries
secured by Liens incurred pursuant to this paragraph (g) does not exceed 10% of
Adjusted Consolidated Net Worth and (ii) such Liens are not used to secure
Indebtedness outstanding (or which could then be incurred under the revolving
credit portion of the Credit Agreement) at the time of incurrence of such Lien
or any extension, renewal, replacement, refunding or refinancing of such
Indebtedness; and
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(h) The Lien on cash advanced, together with the earnings and
proceeds thereof, to fund potential general liability and workers' compensation
reimbursement obligations under a bank letter of credit upon a default in
agreements providing for the letter of credit so long as the amounts advanced
have been adequately reserved against on the consolidated financial statements
of the Company.
7.6. Restricted Payments. The Company will not, except as
hereinafter provided:
(a) declare or pay any dividends, either in cash or property, on
any shares of its capital stock of any class (except dividends or other
distributions payable solely in shares of common stock of the Company);
(b) directly or indirectly, or through any Subsidiary, purchase,
redeem or retire any shares of its capital stock of any class or any warrants,
rights or options to purchase or acquire any shares of its capital stock; or
(c) make any other payment or distribution, directly or
indirectly, or through any Subsidiary, in respect of its capital stock;
(all such declarations, payments, purchases, redemptions, retirements and
distributions described in clauses (a) through (c) being herein collectively
referred to as "Restricted Payments") if, after giving effect thereto, (i) the
aggregate amount of Restricted Payments made after March 31, 1994 to and
including the date of the making of the Restricted Payment in question would
exceed the sum of (A) $10,000,000, plus (B) 75% of Consolidated Net Income (or
less 100% of any deficit) for each fiscal year (or portion thereof) of the
Company subsequent to March 31, 1994, plus (C) the net cash proceeds received
by the Company after March 31, 1994 from the sale of shares of any class of its
common or nonredeemable preferred stock and (ii) there would exist no Default
or Event of Default.
7.7. Merger or Consolidation; Sale of Substantially All Assets.
The Company will not, and will not permit any Restricted Subsidiary to, merge
or consolidate with, or sell all or substantially all of its assets to, any
Person, except that:
(a) The Company may merge into or consolidate with, or sell all or
substantially all of its assets to, any Person or permit any Person to merge
into it, provided that no Default or Event of Default exists and that
immediately after giving effect thereto,
(i) The Company is the successor corporation or, if the
Company is not the successor corporation, (x) the successor
corporation is a solvent corporation organized under the laws of a
state of the United States of America or the District of Columbia and
expressly assumes the Company's obligations under the Notes and this
Agreement and (y) the holders of the Notes shall have received an
opinion of legal counsel reasonably acceptable to them that this
Agreement and the Notes are legal, valid and binding obligations of
the successor corporation, enforceable against the successor
corporation in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, fraudulent transfer and other similar laws affecting
creditors' rights generally, and to the application of general
principles of equity;
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(ii) There shall exist no Default or Event of Default; and
(iii) The Company or such successor corporation could incur
at least $1.00 of additional Funded Debt under Section 7.2; and
(b) Any Restricted Subsidiary may (i) merge into the Company or a
Wholly-Owned Restricted Subsidiary, or (ii) sell, transfer or lease all or any
part of its assets to the Company or a Wholly-Owned Restricted Subsidiary or
(iii) merge with any Person which, as a result of such merger, becomes a
Wholly-Owned Restricted Subsidiary, or (iv) merge with any Person which does
not become a Wholly-Owned Restricted Subsidiary as a result of such merger so
long as such merger is not prohibited by Section 7.8(a); provided in each
instance set forth in clauses (i) through (iv) that immediately before and
after giving effect thereto there shall exist no Default or Event of Default.
7.8. Sale of Assets.
(a) The Company will not, and will not permit any Restricted
Subsidiary to (other than in the ordinary course of business) sell, lease,
transfer or otherwise (including by way of merger or a sale and lease-back
transaction) dispose of (collectively a "Disposition") any assets, including
capital stock of Restricted Subsidiaries, in one or a series of transactions,
to any Person (other than the Company or a Restricted Subsidiary), (i) if in
any fiscal year, after giving effect to such Disposition, the aggregate net
book value of assets subject to Dispositions during such fiscal year would
exceed 10% of Consolidated Total Assets as of the end of the immediately
preceding fiscal year or (ii) if a Default or Event of Default exists or would
exist after giving effect thereto.
(b) Notwithstanding the foregoing limitations in paragraph (a) of
this Section 7.8, the Company or a Restricted Subsidiary may make a Disposition
and the net book value of the assets subject to such Disposition shall not be
subject to or included in the foregoing limitations and computations if the
proceeds (net of taxes and related expenses) from such Disposition are either
(A) reinvested, within 180 days after such Disposition, in productive tangible
assets of a similar nature of the Company or its Restricted Subsidiaries or
(B) offered by the Company to be applied to the prepayment of the Notes on a
pro rata basis with other outstanding Indebtedness at a price of 100% of the
principal amount to be prepaid together with interest accrued to the date of
prepayment; provided, that if any holder of the Notes declines such repayment,
the pro rata proceeds which would have been paid to such holder shall not be
distributed to any other holders of the Notes or any other holders of
Indebtedness as part of such repayment. Any prepayment pursuant to this
Section 7.8(b) of less than all of the Notes outstanding shall be applied in
accordance with Section 2.6.
7.9. Disposition of Stock of Restricted Subsidiaries. The Company
will not permit any Restricted Subsidiary to issue the capital stock of a
Restricted Subsidiary, or any warrants, rights or options to purchase, or
securities convertible into or exchangeable for, such capital stock, to any
Person other than the Company or a Restricted Subsidiary. The Company will
not, and will not
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permit any Restricted Subsidiary to, sell, transfer or otherwise dispose of
(other than to the Company or a Restricted Subsidiary) any capital stock
(including any warrants, rights or options to purchase, or securities
convertible into or exchangeable for, capital stock) or Indebtedness of any
Restricted Subsidiary, if, as a result, such Restricted Subsidiary would cease
to be a Subsidiary giving effect to all purchase, conversion and exchange
rights, unless:
(i) simultaneously therewith all Investments in such Restricted
Subsidiary owned by the Company and every other Restricted Subsidiary
are simultaneously disposed of as an entirety;
(ii) the Board of Directors of the Company shall have determined
that such sale, transfer or disposition is in the best interests of
the Company;
(iii) such sale, transfer or other disposition (A) is to a Person
for consideration payable in cash or in the capital stock or
indebtedness of such Person and/or any of its affiliates and (B) on
terms reasonably deemed by the Board of Directors to be adequate and
satisfactory;
(iv) such Restricted Subsidiary does not have any continuing
Investment in the Company or any other Subsidiary not being
simultaneously disposed of; and
(v) such sale, transfer or other disposition is permitted by
Section 7.8.
7.10. Designation of Unrestricted Subsidiaries. The Company will
not designate any Restricted Subsidiary as an Unrestricted Subsidiary unless
immediately before and after such designation:
(a) Such Subsidiary does not own any Investment in the Company or
any Restricted Subsidiary;
(b) There exists no Default or Event of Default; and
(c) The Company could incur at least $1.00 of additional Funded
Debt.
7.11. Transactions with Affiliates. The Company will not, and will
not permit any Restricted Subsidiary to, enter into any transaction (including
the furnishing of goods or services) with an Affiliate except in the ordinary
course of business as presently conducted and on terms and conditions no less
favorable to the Company or such Restricted Subsidiary than would be obtained
in a comparable arm's-length transaction with a Person not an Affiliate.
7.12. Consolidated Tax Returns. The Company will not file, or
consent to the filing of, any consolidated Federal income tax return with any
Person other than a Subsidiary, except to the extent that the Company is
required under the Code to do otherwise.
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7.13. Nature of Business. The Company will not, and will not permit
any Restricted Subsidiary to, engage in any businesses if, as a result, the
general nature of the businesses of the Company and its Restricted
Subsidiaries, taken as a whole, would be substantially changed from the
businesses conducted and described in the Memorandum, including exhibits.
Section 8. EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.1. Nature of Events. An "Event of Default" shall exist if any
one or more of the following occurs:
(a) Any default in the payment of interest when due on any of the
Notes and continuance of such default for a period of five Business Days;
(b) Any default in the payment of the principal of any of the
Notes or the Make-Whole Amount thereon, if any, at maturity, upon acceleration
of maturity or at any date fixed for prepayment;
(c) Any default (i) in the payment of the principal of, premium,
if any, interest on or any other amounts with respect to any other Indebtedness
of the Company or any Restricted Subsidiary aggregating in excess of $1,000,000
as and when due and payable (whether by lapse of time, declaration, call for
redemption or otherwise) and the continuation of such default beyond the period
of grace (without regard to any waiver or amendment), if any, allowed with
respect thereto, or (ii) (other than a payment default) under any agreements of
the Company or any Restricted Subsidiary under or pursuant to which such
Indebtedness aggregating in excess of $1,000,000 is issued, resulting in the
acceleration of such Indebtedness;
(d) Any default in the observance of any covenant or agreement
contained in Sections 7.1 through 7.13 or Section 8.7;
(e) Any default in the observance or performance of any other
covenant or provision of this Agreement which is not remedied within 30 days;
(f) Any representation or warranty made by the Company in this
Agreement or in any written statement or certificate furnished by the Company
in connection with the issuance and sale of the Notes or furnished by the
Company pursuant to this Agreement, proves incorrect in any material respect as
of the date of the issuance or making thereof;
(g) Any judgment, writ or warrant of attachment or any similar
process in an aggregate amount in excess of $1,000,000 shall be entered or
filed against the Company or any Restricted Subsidiary or against any property
or assets of either and remain unpaid, unvacated, unbonded or unstayed (through
appeal or otherwise);
(h) The Company or any Restricted Subsidiary shall
(i) generally not pay its debts as they become due or
admit in writing its inability to pay its debts generally as they
become due;
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(ii) file a petition in bankruptcy or for reorganization
or for the adoption of an arrangement under the Federal Bankruptcy
Code, or any similar applicable bankruptcy or insolvency law, as now
or in the future amended (herein collectively called "Bankruptcy
Laws"); file an answer or other pleading admitting or failing to deny
the material allegations of such a petition; fail to file, within the
time allowed for such purpose, an answer or other pleading denying or
otherwise controverting the material allegations of such a petition;
or file an answer or other pleading seeking, consenting to or
acquiescing in relief provided for under the Bankruptcy Laws;
(iii) make an assignment of all or a substantial part of
its property for the benefit of its creditors;
(iv) seek or consent to or acquiesce in the appointment of
a receiver, liquidator, custodian or trustee of it or for all or a
substantial part of its property;
(v) be finally adjudicated a bankrupt or insolvent;
(vi) be subject to the entry of a court order, which shall
not be vacated, set aside or stayed within 60 days from the date of
entry, (A) appointing a receiver, liquidator, custodian or trustee of
it or for all or a substantial part of its property, or (B) for relief
pursuant to an involuntary case brought under, or effecting an
arrangement in, bankruptcy or (C) for a reorganization pursuant to the
Bankruptcy Laws or (D) for any other judicial modification or
alteration of the rights of creditors; or
(vii) be subject to the assumption of custody or
sequestration by a court of competent jurisdiction of all or a
substantial part of its property, which custody or sequestration shall
not be suspended or terminated within 60 days from its inception.
8.2. Remedies on Default. When any Event of Default described in
paragraphs (a) through (g) of Section 8.1 has occurred and is continuing, the
holders of more than 51% in aggregate principal amount of the Notes then
outstanding may, by notice to the Company, declare the entire principal,
together with the Make-Whole Amount (to the extent permitted by law), and all
interest accrued on all Notes to be, and such Notes shall thereupon become,
forthwith due and payable, without any presentment, demand, protest or other
notice of any kind, all of which are expressly waived. Notwithstanding the
foregoing, when (i) any Event of Default described in paragraphs (a) or (b) of
Section 8.1 has occurred and is continuing, any holder may by notice to the
Company declare the entire principal, together with the Make-Whole Amount (to
the extent permitted by law), and all interest accrued on the Notes then held
by such holder to be, and such Notes shall thereupon become, forthwith due and
payable, without any presentment, demand, protest or other notice of any kind,
all of which are expressly waived and (ii) any Event of Default described in
paragraph (h) of Section 8.1 has occurred, then the entire principal, together
with the Make-Whole Amount (to the extent permitted by law) and all
interest accrued on all outstanding
33
<PAGE> 38
Notes shall immediately become due and payable without presentment, demand or
notice of any kind. Upon the Notes or any of them becoming due and payable as
aforesaid, the Company will forthwith pay to the holders of such Notes the
entire principal of the Notes (in inverse order of maturity) and interest
accrued on such Notes, plus the Make-Whole Amount which shall be calculated on
the Determination Date.
8.3. Annulment of Acceleration of Notes. The provisions of
Section 8.2 are subject to the condition that if the principal of and accrued
interest on the Notes have been declared immediately due and payable by reason
of the occurrence of any Event of Default described in paragraphs (a) through
(g), inclusive, of Section 8.1, the holder or holders of more than 66-2/3% in
aggregate principal amount of the Notes then outstanding may, by written
instrument filed with the Company, rescind and annul such declaration and the
consequences thereof, provided that (i) at the time such declaration is
annulled and rescinded no judgment or decree has been entered for the payment
of any monies due pursuant to the Notes or this Agreement, (ii) all arrears of
interest upon all the Notes and all other sums payable under the Notes and
under this Agreement or the Guaranty (except any principal, interest or
Make-Whole Amount, if any, on the Notes which has become due and payable solely
by reason of such declaration under Section 8.2) shall have been duly paid and
(iii) each and every Default or Event of Default shall have been cured or
waived; and provided further, that no such rescission and annulment shall
extend to or affect any subsequent Default or Event of Default or impair any
right consequent thereto.
8.4. Other Remedies. If any Event of Default shall be continuing,
any holder of Notes may enforce its rights by suit in equity, by action at law,
or by any other appropriate proceedings, whether for the specific performance
(to the extent permitted by law) of any covenant or agreement contained in this
Agreement or in the Notes or in aid of the exercise of any power granted in
this Agreement, and may enforce the payment of any Note held by such holder and
any of its other legal or equitable rights.
8.5. Conduct No Waiver; Collection Expenses. No course of dealing
on the part of any holder of Notes, nor any delay or failure on the part of any
holder of Notes to exercise any of its rights, shall operate as a waiver of
such rights or otherwise prejudice such holder's rights, powers and remedies.
If the Company fails to pay, when due, the principal of, or the interest on,
any Note, or fails to comply with any other provision of this Agreement, the
Company will pay to each holder, to the extent permitted by law, on demand,
such further amounts as shall be sufficient to cover the costs and expenses,
including but not limited to reasonable attorneys' fees, incurred by such
holders of the Notes in collecting any sums due on the Notes or in otherwise
enforcing any of their rights.
8.6. Remedies Cumulative. No right or remedy conferred upon or
reserved to any holder of Notes under this Agreement is intended to be
exclusive of any other right or remedy, and every right and remedy shall be
cumulative and in addition to every other right or remedy given under this
Agreement or now or hereafter existing under any applicable law. Every right
and remedy given by this Agreement or by applicable law to any holder of Notes
may be exercised from time to time and as often as may be deemed expedient by
such holder, as the case may be.
34
<PAGE> 39
8.7. Notice of Default. With respect to Defaults, Events of
Default or claimed defaults, the Company will give the following notices:
(a) The Company promptly, but in any event within 5 days after the
day on which an executive officer of the Company first obtains actual knowledge
thereof, will furnish to each holder of a Note written notice of the occurrence
of a Default or an Event of Default. Such notice shall specify the nature of
such default, the period of existence thereof and what action the Company has
taken or is taking or proposes to take with respect thereto.
(b) If the holder of any Note or of any other evidence of
Indebtedness of the Company or any Subsidiary gives any notice or takes any
other action with respect to a claimed default, the Company will forthwith give
written notice thereof to each holder of the then outstanding Notes, describing
the notice or action and the nature of the claimed default.
Section 9. AMENDMENTS, WAIVERS AND CONSENTS
9.1. Matters Subject to Modification. Any term, covenant,
agreement or condition of this Agreement may, with the consent of the Company,
be amended, or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), if the Company
shall have obtained the consent in writing of the holder or holders of at least
51% in aggregate principal amount of outstanding Notes; provided, however,
that, without the written consent of the holder or holders of all of the Notes
then outstanding, no such waiver, modification, alteration or amendment shall
be effective which will (i) change the time of payment (including any required
prepayment) of the principal of or the interest on any Note, (ii) reduce the
principal amount thereof or the Make-Whole Amount, if any, or change the rate
of interest thereon, (iii) change any provision of any instrument affecting the
preferences between holders of the Notes or between holders of the Notes and
other creditors of the Company, or (iv) change any of the provisions of Section
2.6, Section 8.2, Section 8.3 or this Section 9.
For the purpose of determining whether holders of the requisite
principal amount of Notes have made or concurred in any waiver, consent,
approval, notice or other communication under this Agreement, Notes held in the
name of, or owned beneficially by, the Company, any Subsidiary or any Affiliate
thereof, shall not be deemed outstanding.
9.2. Solicitation of Holders of Notes. The Company will not,
directly or indirectly, solicit, request or negotiate for or with respect to
any proposed waiver or amendment of any of the provisions of this Agreement or
the Notes unless each holder of the Notes (irrespective of the amount of Notes
then owned by it) shall concurrently be informed thereof by the Company and
shall be afforded the opportunity of considering the same and shall be supplied
by the Company with sufficient information to enable it to make an informed
decision with respect thereto. Executed or true and correct copies of any
waiver or consent effected pursuant to the provisions of this Section 9 shall
be delivered by the Company to each holder of outstanding Notes forthwith
following the date on which the same shall have been executed and delivered by
the holder or holders of the requisite percentage of outstanding Notes. The
Company will not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional
35
<PAGE> 40
interest, fee or otherwise, to any holder of the Notes as consideration for or
as an inducement to the entering into by any holder of the Notes of any waiver
or amendment of any of the terms and provisions of this Agreement unless such
remuneration is concurrently paid, on the same terms, ratably to each holder of
the then outstanding Notes.
9.3. Binding Effect. Any such amendment or waiver shall apply
equally to all the holders of the Notes and shall be binding upon them, upon
each future holder of any Note and upon the Company whether or not such Note
shall have been marked to indicate such amendment or waiver. No such amendment
or waiver shall extend to or affect any obligation not expressly amended or
waived or impair any right related thereto.
Section 10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT
10.1. Form of Notes. Each Note initially delivered under this
Agreement will be in the form of one fully registered Note in the form attached
as Exhibit A. The Notes are issuable only in fully registered form and in
denominations of at least $100,000 (or the remaining outstanding balance
thereof, if less than $100,000).
10.2. Note Register. The Company shall cause to be kept at its
principal office a register (the "Note Register") for the registration and
transfer of the Notes. The names and addresses of the holders of Notes, the
transfer thereof and the names and addresses of the transferees of the Notes
shall be registered in the Note Register. The Company may deem and treat the
person in whose name a Note is so registered as the holder and owner thereof
for all purposes and shall not be affected by any notice to the contrary, until
due presentment of such Note for registration of transfer as provided in this
Section 10.
10.3. Issuance of New Notes upon Exchange or Transfer. Upon
surrender for exchange or registration of transfer of any Note at the office of
the Company designated for notices in accordance with Section 11.2, the Company
shall execute and deliver, at its expense, one or more new Notes of any
authorized denominations requested by the holder of the surrendered Note, each
dated the date to which interest has been paid on the Notes so surrendered (or,
if no interest has been paid, the date of such surrendered Note), but in the
same aggregate unpaid principal amount as such surrendered Note, and registered
in the name of such person or persons as shall be designated in writing by such
holder. Every Note surrendered for registration of transfer shall be duly
endorsed, or be accompanied by a written instrument of transfer duly executed,
by the holder of such Note or by his attorney duly authorized in writing. The
Company may condition its issuance of any new Note in connection with a
transfer by any Person on the transferee making the representation in
Section 3.2, by Institutional Holders on compliance with Section 2.5 and on the
payment to the Company of a sum sufficient to cover any stamp tax or other
governmental charge imposed in respect of such transfer.
10.4. Replacement of Notes. Upon receipt of evidence satisfactory
to the Company of the loss, theft, mutilation or destruction of any Note, and
in the case of any such loss, theft or destruction upon delivery of a bond of
indemnity in such form and amount as shall be reasonably satisfactory to the
Company or in the event of such mutilation upon surrender and cancellation of
36
<PAGE> 41
the Note, the Company, without charge to the holder thereof, will make and
deliver a new Note, of like tenor in lieu of such lost, stolen, destroyed or
mutilated Note. If any such lost, stolen or destroyed Note is owned by you or
any other Institutional Holder, then the affidavit of an authorized officer of
such owner setting forth the fact of such loss, theft or destruction and of its
ownership of the Note at the time of such loss, theft or destruction shall be
accepted as satisfactory evidence thereof, and no further indemnity shall be
required as a condition to the execution and delivery of a new Note, other than
a written agreement of such owner (in form reasonably satisfactory to the
Company) to indemnify the Company.
Section 11. MISCELLANEOUS
11.1. Expenses. Whether or not the purchase of Notes herein
contemplated shall be consummated, the Company agrees to pay directly all
reasonable expenses in connection with the preparation, execution and delivery
of this Agreement and the transactions contemplated by this Agreement,
including, but not limited to, out-of-pocket expenses, filing fees of Standard
& Poor's Corporation in connection with obtaining a private placement number,
charges and disbursements of special counsel, photocopying and printing costs
and charges for shipping the Notes, adequately insured, to you at your home
office or at such other address as you may designate, and all similar expenses
(including the fees and expenses of counsel) relating to any proposed
amendments, waivers or consents, whether or not consummated, in connection with
this Agreement or the Notes, including, but not limited to, any such
amendments, waivers or consents resulting from any work-out, renegotiation or
restructuring relating to the performance by the Company of its obligations
under this Agreement and the Notes. The Company also agrees that it will pay
and save you harmless against any and all liability with respect to stamp and
other documentary taxes, if any, which may be payable, or which may be
determined to be payable in connection with the execution and delivery of this
Agreement or the Notes (but not in connection with a transfer of any Notes),
whether or not any Notes are then outstanding. The obligations of the Company
under this Section 11.1 shall survive the retirement of the Notes.
11.2. Notices. Except as otherwise expressly provided herein, all
communications provided for in this Agreement shall be in writing and delivered
by overnight courier or by a facsimile with a copy also contemporaneously sent
by overnight courier, such notice to be deemed effective as of the time of
actual receipt by overnight courier (i) if to you, to the address set forth
below your name in Schedule I, or to such other address as you may in writing
designate, (ii) if to any other holder of the Notes, to such address as the
holder may designate in writing to the Company, and (iii) if to the Company, to
Butler Manufacturing Company, BMA Tower, One Penn Valley Park, Kansas City,
Missouri 64108, Attention: Chief Financial Officer, with a copy to the Vice
President, General Counsel and Secretary of the Company, or to such other
address as the Company may in writing designate.
11.3. Reproduction of Documents. This Agreement and all documents
relating hereto, including, without limitation, (i) consents, waivers and
modifications which may hereafter be executed, (ii) documents received by you
at the closing of the purchase of the Notes (except the Notes themselves), and
(iii) financial statements, certificates and other information previously or
hereafter furnished to you, may be reproduced by you by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process, and you may destroy any
37
<PAGE> 42
original document so reproduced. The Company agrees and stipulates that any
such reproduction which is legible 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 that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence; provided that nothing herein contained shall preclude the Company
from objecting to the admission of any reproduction on the basis that such
reproduction is not accurate, has been altered or is otherwise incomplete.
11.4. Confidentiality. The Purchasers or any holder of a Note shall
employ reasonable procedures in conformity with industry standards to maintain
the confidentiality of all confidential information heretofore or hereafter
disclosed by or on behalf of the Company pursuant to this Agreement and marked
confidential and shall not use such information other than as herein
contemplated. Notwithstanding the foregoing, the Purchasers or any holder of a
Note may disclose or disseminate such information to (i) their directors,
officers, employees and representatives, including their attorneys and
accountants; (ii) prospective purchasers of a Note; (iii) third parties as is
necessary or appropriate in connection with any law, statute, rule, regulation,
ordinance, order, decree, judgment, subpoena, pleading, discovery or similar
request or any suit, proceeding, investigation or requirement of any
regulatory, judicial, arbitration, governmental or industry body (including but
not limited to the National Association of Insurance Commissioners). In
addition, the Purchasers or any holder of a Note may disclose such confidential
information if (x) it is or hereafter becomes lawfully obtainable from other
sources, (y) necessary in connection with the enforcement of obligations of the
Company pursuant to the terms of this Agreement or (z) such duty as to
confidentiality is waived by the Company.
11.5. Successors and Assigns. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns.
11.6. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois.
11.7. Headings. The headings of the sections and subsections of
this Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
11.8. Counterparts. This Agreement may be executed simultaneously
in one or more counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart or reproduction thereof permitted by
Section 11.3.
11.9. Reliance on and Survival of Provisions. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant to this Agreement, whether or not in connection
with a closing, (i) shall be deemed to have been relied upon by you,
notwithstanding any investigation heretofore or hereafter made by you or on
your behalf and (ii) shall survive the delivery of this Agreement and the
Notes.
11.10 Integration and Severability. This Agreement embodies the
entire agreement and understanding between you and the Company, and supersedes
all prior agreements and
38
<PAGE> 43
understandings relating to the subject matter hereof. In case any one or more
of the provisions contained in this Agreement or in any Note, or application
thereof, shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained in
this Agreement and in any Note, and any other application thereof, shall not in
any way be affected or impaired thereby.
[THE REST OF THIS PAGE LEFT BLANK INTENTIONALLY]
39
<PAGE> 44
IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Agreement to be executed and delivered by their respective officer or officers
thereunto duly authorized.
BUTLER MANUFACTURING COMPANY
By: /s/ JOHN H. HOLLAND
Title: Vice President - Finance
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By: /s/ SARAH J. PITTS
Title: Counsel
By: /s/ FREDERICK A. BELL
Title: Director - Securities
Investment
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ WILLIAM E. LORD
Title: Second Vice President
BUSINESS MEN'S ASSURANCE COMPANY OF
AMERICA
By: /s/ CONOUGHT M. TROUTMAN
Title: Vice President - Securities
40
<PAGE> 45
PROVIDENT MUTUAL LIFE INSURANCE
COMPANY OF PHILADELPHIA, SPDA
By: /s/ G. C. LANGE
Title: Vice President
PROVIDENT MUTUAL LIFE INSURANCE
COMPANY-CALIC
By: /s/ G. C. LANGE
Title: Vice President
PROVIDENT MUTUAL LIFE AND ANNUITY
COMPANY OF AMERICA
By: /s/ G. C. LANGE
Title: Vice President
41
<PAGE> 46
SCHEDULE I
Principal Amount of Notes to Be Purchased
Name and Address of Purchaser Principal Amount of Notes
- - ----------------------------- -------------------------
Principal Mutual Life Insurance $16,000,000
$ 4,000,000
Company
711 High Street
Des Moines, Iowa 50392-0800
Attention: Investment Department -
Securities Division
Address for all communications is as above, except notices of payment
and written confirmations of wire or inter-bank transfers, which shall
be addressed to:
Principal Mutual Life Insurance
Company
711 High Street
Des Moines, Iowa 50392-0810
Attn: Investment Department -
Accounting and Treasury
All payments are to be by bank wire transfer of immediately available
funds to:
Norwest Bank Iowa, N.A.
7th & Walnut Streets
Des Moines, Iowa 50309
Account No. 014752
Each wire transfer shall identify such payment as "Butler
Manufacturing Company, 8.02% Senior Notes due December 30,
2003," PPN 123655A#9, and shall identify the payment as
interest, principal and/or Make-Whole Amount, as applicable.
Tax ID # 42-0127290
42
<PAGE> 47
SCHEDULE I
Principal Amount of Notes to Be Purchased
Name and Address of Purchaser Principal Amount of Notes
- - ----------------------------- -------------------------
Massachusetts Mutual Life $5,000,000
Insurance Company
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Address for all communications is as above, except notices and
communications with respect to payments and corporate actions, which
shall be addressed to:
Massachusetts Mutual Life
Insurance Company
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Custody and
Collection Department E381
All payments are to be by bank wire transfer
of immediately available funds to:
Chemical Bank
Institutional Client Services
4 New York Plaza-4th Floor
New York, New York 10004-2413
ABA # 021-000128
For Credit to Massachusetts Mutual Life Insurance
Company's Insurance & Financial Management-Traditional
Account # 321-029-852
With telephone advice of payment to:
Securities Custody and Collection Department of
Masschusetts Mutual Life Insurance Company at
(413) 788-8411
Each wire transfer shall identify such payment as "Butler
Manufacturing Company, 8.02% Senior Notes due December 30,
2003", PPN 123655A#9, and shall identify the payment as
interest, principal and/or Make-Whole Amount, as applicable.
Tax ID # 04-1590850
43
<PAGE> 48
SCHEDULE I
Principal Amount of Notes to Be Purchased
Name and Address of Purchaser Principal Amount of Notes
- - ----------------------------- -------------------------
Business Men's Assurance Company
of America $5,000,000
Attn: Investment Department-1865
One Penn Valley
Kansas City, Missouri 64108
Telecopier number: 816-751-5572
Address for all communications is as above.
All payments are to be by bank wire transfer
of immediately available funds to:
United Missouri Bank
ABA # 101000695
FAO # 9800006823
FFC Business Men's Assurance Co.
A/C# 69-0280-01-1
Contact: Debbie Cadwell: (816) 860-4930
Each wire transfer shall identify such payment as "Butler
Manufacturing Company, 8.02% Senior Notes due December 30,
2003", PPN 123655A#9, and shall identify the payment as
interest, principal and/or Make-Whole Amount, as applicable.
Tax ID # 43-6295832
Name of nominee in which Notes to be registered initially: UMBTRU
44
<PAGE> 49
SCHEDULE I
Principal Amount of Notes to Be Purchased
Name and Address of Purchaser Principal Amount of Notes
- - ----------------------------- -------------------------
Provident Mutual Life Insurance Company
of Philadelphia, SPDA $1,500,000
1600 Market Street
Philadelphia, Pennsylvania 19103
Attention: Securities Investment Department
Address for all communications is as above, except notice with respect
to payment and written confirmation of each such payment to be sent to
the attention of Treasurer at address given above.
All payments are to be by bank wire transfer
of immediately available funds to:
PNC Bank
Broad and Chestnut Streets
Philadelphia, Pennsylvania 19101
ABA# 031-000-053
For Credit to Provident Mutual Life Insurance Company
of Philadelphia-SPDA
General Account # 408-421-7
Each wire transfer shall identify such payment as "Butler
Manufacturing Company, 8.02% Senior Notes due December 30,
2003", PPN 123655A#9, and shall identify the payment as
interest, principal and/or Make-Whole Amount, as applicable.
Tax ID # 23-099-045-0
45
<PAGE> 50
SCHEDULE I
Principal Amount of Notes to Be Purchased
Name and Address of Purchaser Principal Amount of Notes
- - ----------------------------- -------------------------
Provident Mutual Life Insurance $2,000,000
Company - CALIC
1600 Market Street
Philadelphia, Pennsylvania 19103
Attention: Securities Investment Department
Telecopier number: 215-636-8322
Address for all communications is as above, except notice with respect
to payment and written confirmation of each such payment to be sent to
the attention of Treasurer at address given above.
All payments are to be by bank wire transfer
of immediately available funds to:
PNC Bank
Broad and Chestnut Streets
Philadelphia, Pennsylvania 19101
ABA# 031-000-053
For Credit to Provident Mutual Life Insurance Company - CALIC
General Account # 453-6002
Each wire transfer shall identify such payment as "Butler
Manufacturing Company, 8.02% Senior Notes due December 30,
2003", PPN 123655A#9, and shall identify the payment as
interest, principal and/or Make-Whole Amount, as applicable.
Tax ID # 23-099-045-0
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<PAGE> 51
SCHEDULE I
Principal Amount of Notes to Be Purchased
Name and Address of Purchaser Principal Amount of Notes
- - ----------------------------- -------------------------
ProvidentMutual Life and Annuity $1,500,000
Company of America
1600 Market Street
Philadelphia, Pennsylvania 19103
Attention: Securities Investment Department
Telecopier number: 215-636-8322
Address for all communications is as above, except notice with respect
to payment and written confirmation of each such payment to be sent to
the attention of Treasurer at address given above.
All payments are to be by bank wire transfer
of immediately available funds to:
Provident National Bank
Broad and Chestnut Streets
Philadelphia, Pennsylvania 19101
ABA# 031-000-053
For Credit to Provident Mutual Life and Annuity
Company of America
General Account # 507-549-1
Each wire transfer shall identify such payment as "Butler
Manufacturing Company, 8.02% Senior Notes due December 30,
2003", PPN 123655A#9, and shall identify the payment as
interest, principal and/or Make-Whole Amount, as applicable.
Tax ID # 23-1619082
47
<PAGE> 52
ANNEX I
SUBSIDIARIES
DOMESTIC SUBSIDIARIES
<TABLE>
<CAPTION>
State or Country Percentage
Name of Incorporation of Ownership Parent
- - ---- ---------------- ------------ ------
<S> <C> <C> <C>
BMC Real Estate, Inc. Delaware 100% Butler Manufacturing Company
Bucon, Inc. Delaware 100% Butler Manufacturing Company
Butler Holdings, Inc. Delaware 100% Butler Manufacturing Company
Butler Real Estate, Inc. Delaware 100% Butler Manufacturing Company
Lester's of Minnesota, Inc. Minnesota 100% Butler Manufacturing Company
</TABLE>
INACTIVE SUBSIDIARIES
<TABLE>
<CAPTION>
State or Country Percentage
Name of Incorporation of Ownership Parent
- - ---- ---------------- ------------ ------
<S> <C> <C> <C>
BMC Investments, Inc. Missouri 100% Butler Manufacturing Company
Butler China, Inc. Delaware 100% Butler Holdings, Inc.
Butler Construction, Inc. Kansas 100% Butler Manufacturing Company
Energy Cycle, Inc. Delaware 100% Butler Manufacturing Company
Energy Methods, Inc. New Jersey 100% Butler Manufacturing Company
EPI Architectural Systems, Pennsylvania 100% Butler Manufacturing Company
Inc.
Naturalite/EPI, Inc. Texas 100% Butler Manufacturing Company
VW Corp. Delaware 100% Butler Manufacturing Company
</TABLE>
48
<PAGE> 53
ANNEX I
(Continued)
SUBSIDIARIES
FOREIGN CORPORATIONS
<TABLE>
<CAPTION>
State or Country Percentage
Name of Incorporation of Ownership Parent
- - ---- ---------------- ------------ ------
<S> <C> <C> <C>
Butler Bausysteme GmbH Germany 100% Butler Europe B. V.
Butler Building Systems
Limited Scotland 100% Butler Holdings, Inc.
Butler Construcciones,
S.A. de C.V. Mexico 100% Butler Holdings, Inc.
Butler Export, Inc. Barbados 100% Butler Holdings, Inc.
Butler Europe B. V. Holland 100% Butler Holdings, Inc.
Butler Island, H.F. Iceland 90% Mitchelston Building Products Limited
Butler, S.A. de C.V. Mexico 100% Butler Holdings, Inc.
Butler Systemes de
Construction SARL France 100% Butler Europe B. V.
Comercial Butler Limitada Chile 99% Butler Holdings, Inc.
1% Butler Manufacturing Company
Mitchelston Building
Products Ltd. Scotland 100% Butler Building Systems Limited
Walker Line Holdings Dominion of
Limited Canada 100% Butler Holdings, Inc.
</TABLE>
Note: All Subsidiaries listed are Restricted Subsidiaries.
49
<PAGE> 54
ANNEX II
TITLE TO PROPERTIES
<TABLE>
<CAPTION>
AMOUNT OF MATURITY
PROPERTY LIENHOLDER DEBT SECURED DATE
- - -------------------------- --------------------- ------------ ----
<S> <C> <C> <C>
Capital Leases:
- - ---------------
Various Office and Various (pound)75,000 Various
Factory Equipment of
Butler Building Systems,
Limited
Various Computer US Leasing $650,000 Various thru
Equipment of Amplicon Financial September, 1996
Butler Manufacturing Deutsche Credit
Company
Various Factory Deutsche Credit $588,000 June, 2000
Equipment of Butler
Manufacturing
Company
Debt:
- - -----
Substantially all Bank of Scotland (pound)1,628,000 Revolver:
the assets of June, 1995;
Butler Building Mortgage:
Systems, Limited January, 1997
Note and Mortgage Lincoln National $2,500,000 January, 1996
Agreement on the Pension Insurance
Garland, Texas Company
asset held for sale
Industrial Revenue Bond Rhode Island Port $780,000 July, 1996
(Hedison Mfg.-Vistawall) Authority
Lincoln, Rhode Island
</TABLE>
50
<PAGE> 55
ANNEX III
INVESTMENTS
<TABLE>
<S> <C>
River Ridge Land Development (Texas) $10,269,000
Lincoln, Rhode Island Plant 3,318,000
Investment in Joint Ventures 4,418,000
Notes Receivable 5,677,000
-----------
$23,682,000
===========
</TABLE>
51
<PAGE> 56
ANNEX IV
FUNDED DEBT
<TABLE>
<CAPTION>
DESCRIPTION OF DEBT AMOUNT MATURITY
- - ------------------- ------ --------
<S> <C> <C>
Industrial Revenue Bond Issue $240,000 December, 2004
Related to the Corporate Acres
Real Estate Development,
Sedalia, Missouri
Promissory Note Related to the $207,000 January, 2012
PDC Real Estate Development,
Granite City, Illinois
Promissory Note Related to $462,000 December, 1998
the Redna Place Properties
Office Building, Cincinnati, Ohio
Capital Lease Obligations related to (pound)75,000 Various
Office and Factory Equipment of
Butler Building Systems, Limited
Capital Lease Obligations relating $650,000 Various thru
to Computer Equipment of September, 1996
Butler Manufacturing Company
Capital Lease Obligations relating $588,000 June, 2000
to Factory Equipment of Butler
Manufacturing Company
Note and Mortgage for Butler (pound)128,000 January, 1997
Building Systems, Limited
Note and Mortgage Agreement $2,500,000 January, 1996
on the Garland, Texas asset
held for sale
Unsecured Note Agreement with $79,000 September, 1996
the City of Terrell, Texas
Industrial Revenue Bond Issue $780,000 July, 1996
Rhode Island Port Authority
(Hedison Mfg. - Vistawall)
Lincoln, Rhode Island
Industrial Revenue Bond Issue $4,000,000 November, 2001
Massachusetts Industrial
Finance Agency
(Terra-Light - Butler Mfg.)
Danvers, Massachusetts
</TABLE>
52
<PAGE> 57
ANNEX V
LIENS
<TABLE>
<CAPTION>
PROPERTY SUBJECT TO AMOUNT OF
LIEN LIENHOLDER DEBT SECURED MATURITY DATE
- - ----------------------------- --------------- ------------ -------------
<S> <C> <C> <C>
Joint Ventures:
- - ---------------
Joint Venture Interest in Third National Bank $240,000 December, 2004
Corporate Acres Real Sedalia, Missouri
Estate Development,
Sedalia, Missouri
Joint Venture Interest in Central Bank $207,000 January, 2012
PDC Real Estate Granite City, Illinois
Development
Joint Venture Interest in Provident Bank $462,000 December, 1998
Redna Place Properties Cincinnati, Ohio
Office Building
Capital Leases:
- - ---------------
Various Office and Factory Various (pound)75,000 Various
Equipment of Butler
Building Systems, Limited
Various Computer US Leasing $650,000 Various thru
Equipment of Butler Amplicon Financial September, 1996
Manufacturing Company Deutsche Credit
Various Factory Deutsche Credit $588,000 June, 2000
Equipment of Butler
Manufacturing Company
Debt:
- - -----
Substantially all the assets Bank of Scotland (pound)1,628,000 Revolver:
of Butler Building Systems, June, 1995;
Limited Mortgage:
January, 1997
Note and Mortgage Lincoln National $2,500,000 January, 1996
Agreement on the Garland Pension Insurance
Texas asset held for sale Company
Industrial Revenue Bond Rhode Island Port $780,000 July, 1996
(Hedison Mfg.-Vistawall) Authority
Lincoln, Rhode Island
Other Potential Liens:
- - ----------------------
Letters of Credit Issued as Boatmen's First $800,000 Various
Performance Guarantees National Bank
on Construction Projects
</TABLE>
53
<PAGE> 58
BUTLER MANUFACTURING COMPANY ANNEX VI
CERTAIN CURRENT INSURANCE CARRIERS AND RATINGS
<TABLE>
<CAPTION>
EFFECTIVE EXPIRATION SELF-RETENTION
POLICY NUMBER DATE DATE CARRIER PER OCCURRENCE
------------------- --------- ---------- -------------- --------------
CASUALTY INSURANCE
- - ------------------
<S> <C> <C> <C> <C> <C> <C>
1. Workers' Compensation & Employers Liability:
General - "All States" WC2-641-004268-673 11/01/93 11/01/94 Liberty Mutual 350,000
California WC2-641-004268-753 11/01/93 11/01/94 Liberty Mutual 350,000
Missouri - "Assigned Risk" WC1-341-412738-023 11/01/93 11/01/94 Liberty Mutual -0-
BUCON Field Employees (Excl. Missouri) WC2-641-004268-673 11/01/93 11/01/94 Liberty Mutual -0-
Rhode Island OOOOOO9527 11/01/93 11/01/94 Beacon Mutual 250
Maine - "Assigned Risk" 1810021723 11/01/93 11/01/94 Maine Employers -0-
West Virginia TBA 01/01/94 01/01/95 W.V. State Fund -0-
Washington 441,650-00-9 01/01/94 01/01/95 Wash. State Fund -0-
Nevada 93885.5 01/01/94 01/01/95 Nevada State Fund 100
Ohio 66341 07/01/93 07/01/94 Ohio State Fund -0-
Foreign (Excl. United Kingdom) CXC042472 11/01/93 11/01/94 CIGNA International -0-
2. Commercial General Liability (US): RG2-641-004268-613 11/01/93 11/01/94 Liberty Mutual 1,000,000
3. Commercial General Liability (Canada): RG1-641-004136-283 11/01/93 06/01/94 Liberty Mutual -0-
4. International General and Auto Liability*: CXC042472 11/01/93 11/01/94 CIGNA International 1,000,000
5. Multi-National General/Auto Liability (DIC): EC1-64M-004124-693 11/01/93 11/01/94 Liberty Mutual 1,000,000
6. Automobile:
General "All States" Liability AS2-641-004268-623 11/01/93 11/01/94 Liberty Mutual 350,000
Texas Liability AS2-641-004268-703 11/01/93 11/01/94 Liberty Mutual 350,000
California/New York Liability AS2-641-004118-763 11/01/93 11/01/94 Liberty Mutual 350,000
Virginia Liability AS2-641-004124-373 11/01/93 11/01/94 Liberty Mutual 350,000
Louisiana/Mass./New Jersey Liability AS2-641-004136-133 11/01/93 11/01/94 Liberty Mutual 350,000
Canada (Ontario) - Liability AC1-641-004124-743 11/01/93 11/01/94 Liberty Mutual -0-
Collision/Comp. - Canada (Ontario) AC1-641-004124-743 11/01/93 11/01/94 Liberty Mutual 500
Canada (Non-Ontario) - Liability AC1-641-004124-123 11/01/93 11/01/94 Liberty Mutual -0-
Collision/Comp. - Canada (Non-Ontario) AC1-641-004124-123 11/01/93 11/01/94 Liberty Mutual 500
Collision/Comp. - All-State(14 Trucks) AS2-641-004070-463 11/01/93 11/01/94 Liberty Mutual 5,000
Collision/Comp. - Texas AS2-641-004124-393 11/01/93 11/01/94 Liberty Mutual 5,000
Collision/Comp. - VA (2 Large Trucks) AS2-641-004124-383 11/01/93 11/01/94 Liberty Mutual 5,000
<CAPTION>
ANNUAL LIMITS PER A.M. BEST'S
PREMIUM ($U.S.) OCCURRENCE RATING
--------------- ------------------------------------ ---------------
CASUALTY INSURANCE
- - ------------------
<S> <C> <C> <C> <C>
1. Workers' Compensation & Employers Liability:
General - "All States" $ 1,445,124 WC-Statutory; EL-2,000,000 A- XV
California (incl. above) WC-Statutory; EL-2,000,000 A- XV
Missouri - "Assigned Risk" 99,519 WC-Statutory; EL-1,000,000 A- XV
BUCON Field Employees (Excl. Missouri) 139,200 WC-Statutory; EL-2,000,000 A- XV
Rhode Island 48,000 WC-Statutory; EL-1,000,000 NA-4 IV
Maine - "Assigned Risk" 1,103 WC-Statutory; EL-1,000,000 None
West Virginia 40 WC-Statutory; EL-2,000,000 None
Washington 0 WC-Statutory; EL-2,000,000 None
Nevada 2,054 WC-Statutory; EL-2,000,000 None
Ohio 3,605 WC-Statutory; EL-2,000,000 None
Foreign (Excl. United Kingdom) 10,000 WC-Statutory; EL-1,000,000 A- XIV
-------------
TOTAL 1,748,645
2. Commercial General Liability (US): 3,026,444 5,000,000 & 8,000,000 aggreg. A- XV
3. Commercial General Liability (Canada): 16,500 2,000,000 & 2,000,000 aggreg. A- XV
4. International General and Auto Liability*: 64,496 General Liability-1,000,000 & aggreg.; A- XIV
Auto Liability-1,000,000 each occur.
5. Multi-National General/Auto Liability (DIC): 1,000 1,000,000 & aggreg. A- XV
(Excess of Primary Policy Required Locally)
6. Automobile:
General "All States" Liability 88,128 5,000,000 A- XV
Texas Liability (incl. above) 5,000,000 A- XV
California/New York Liability (incl. above) 5,000,000 A- XV
Virginia Liability (incl. above) 5,000,000 A- XV
Louisiana/Mass./New Jersey Liability (incl. above) 5,000,000 A- XV
Canada (Ontario) - Liability 1,337 1,000,000 A- XV
Collision/Comp. - Canada (Ontario) (incl. above) Actual Cash Value Per Vehicle A- XV
Canada (Non-Ontario) -Liability 1,004 1,000,000 A- XV
Collision/Comp. - Canada (Non-Ontario) (incl. above) Actual Cash Value Per Vehicle A- XV
Collision/Comp. - All-State (14 Trucks) 9,478 Actual Cash Value Per Vehicle A- XV
Collision/Comp. - Texas (incl. above) Actual Cash Value Per Vehicle A- XV
Collision/Comp. - VA (2 Large Trucks) 1,354 Actual Cash Value Per Vehicle A- XV
-------------
TOTAL: 101,301
</TABLE>
Note: Liberty Mutual premium costs shown for: "All-States" and Calif. Workers'
Compensation and General and Auto Liability represent estimated premium costs
incorporating an actuarial determination of projected losses within our
self-retention. Depending on loss experience, the net cost of these programs,
collectively, may be lower or higher as losses differ from the original
projection. Current loss estimates incorporated in annual premiums shown are
as follows: (1) Workers' Compensation - $1,015,000 ("All-States", California);
$50,000 (RI); $97,000 (MO); (2) General Liability - $2,033,000; (3) Auto
Liability (US) - $40,000 (228 autos, trucks, semi-tractor trailers).
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
7. Umbrella Liability:
First Layer RT2-641-004070-493 11/01/93 11/01/94 Liberty Mutual ***1,000,000
Second Layer RE2-641-004124-753 11/01/93 11/01/94 Liberty Mutual -0-
Third Layer* HXL-F866888 11/01/93 11/01/94 Home Insurance -0-
Fourth Layer** (94) 7930-0141 03/01/94 11/01/94 Chubb (Federal Ins.) -0-
Fifth Layer** 030XN22207344SCA 03/01/94 11/01/94 Aetna Casualty -0-
8. Executive Risk Liability**:
Directors & Officers 80916545-H 01/01/94 01/01/95 Chubb (Federal Ins.) 1,000,000
Outside Directorships 80916545-H 01/01/94 01/01/95 Chubb (Federal Ins.) 100,000
Fiduciary 80916545-H 01/01/94 01/01/95 Chubb (Federal Ins.) 50,000
Commercial Crime - Worldwide 80916545-H 01/01/94 01/01/95 Chubb (Federal Ins.) 50,000
Commercial Crime - United Kingdom 80916545-H 01/01/94 01/01/95 Chubb (Federal Ins.) 5,000
Special Crime 80916545-H 01/01/94 01/01/95 Chubb (Federal Ins.) -0-
9. Aviation Liability**:
Butler Blackhawk Plane 404-21613 08/14/93 08/14/94 North American 500
Non-Owned Aircraft 65BN0 352896 11/01/93 11/01/94 Associated Aviation -0-
</TABLE>
<TABLE>
<S> <C> <C> <C>
7. Umbrella Liability:
First Layer 220,457 15,000,000 & aggreg. A- XV
Second Layer 33,000 10,000,000 & aggreg. A- XV
Third Layer* 52,500 20,000,000 & aggreg. A- XI
Fourth Layer** 25,163 25,000,000 & aggreg. A++ XIV
Fifth Layer** 16,775 25,000,000 & aggreg. A XIV
------------- ------------------------------
TOTAL: 347,895 95,000,000 & aggreg.
8. Executive Risk Liability**:
Directors & Officers 97,758 10,000,000 & aggreg. A++ XIV
Outside Directorships 5,010 5,000,000 A++ XIV
Fiduciary 20,006 10,000,000 & aggreg. A++ XIV
Commercial Crime - Worldwide 18,000 5,000,000 A++ XIV
Commercial Crime - United Kingdom 1,439 5,000,000 A++ XIV
Special Crime 3,700 10,000,000 A++ XIV
-------------
145,913
9. Aviation Liability**:
Butler Blackhawk Plane 1,918 95,000 Hull, 1,000,000 Liability None
Non-Owned Aircraft 2,075 5,000,000 A X
-------------
TOTAL: 3,993
</TABLE>
* Brokered through Rollins Hudig Hall.
** Brokered through Marsh & McLennan. Butler Blackhawk Aviation Liability
Brokered through Professional Insurance Counselors, Inc.
*** Retention applicable only if no coverage is afforded the occurrence under
the primary general liability policy through Liberty Mutual.
NOTE: FULL DETAIL ON BUTLER BUILDING SYSTEMS LTD.'S U.K. COVERAGES/PREMIUMS
NOT REFLECTED ABOVE. PRIMARY COVERAGES ARE THROUGH CIGNA FOR LIABILITY AND
ALLENDALE FOR PROPERTY WITH ROLLINS HUDIG HALL AS BROKER.
<PAGE> 59
BUTLER MANUFACTURING COMPANY ANNEX VI
CERTAIN CURRENT INSURANCE CARRIERS AND RATINGS
<TABLE>
<CAPTION>
EFFECTIVE EXPIRATION SELF-RETENTION
POLICY NUMBER DATE DATE CARRIER PER OCCURRENCE
------------------- --------- ---------- ---------------- --------------
PROPERTY/MARINE INSURANCE
- - -------------------------
<S> <C> <C> <C> <C> <C>
1. Property Damage - "All-Risk" FA-530 01/01/91 07/01/94 Allendale Mutual (1,2) $ 25,000
2. Business Interruption FA-530 01/01/91 07/01/94 Allendale Mutual (1,2) $ 25,000
3. Payroll FA-530 01/01/91 07/01/94 Allendale Mutual (1,2) $ 25,000
4. Blanket Extra Expense (Incl. EDP) FA-530 01/01/91 07/01/94 Allendale Mutual (1,2) $ 25,000
5. Automatic Coverage - New Locations FA-530 01/01/91 07/01/94 Allendale Mutual (1,2) $ 25,000
6. Errors & Omissions(Failure To Report) FA-530 01/01/91 07/01/94 Allendale Mutual (1,2) $ 25,000
7. Valuable Papers (Records Retention) FA-530 01/01/91 07/01/94 Allendale Mutual (1,2) $ 25,000
8. Off-Premises Service Interruption FA-530 01/01/91 07/01/94 Allendale Mutual (1,2) $ 25,000
9. Contingent Bus. Interrupt. (Suppliers) FA-530 01/01/91 07/01/94 Allendale Mutual (1,2) $ 25,000
10. Accounts Receivable FA-530 01/01/91 07/01/94 Allendale Mutual (1,2) $ 25,000
11. Personal Computers FA-530 01/01/91 07/01/94 Allendale Mutual (2) $ 2,500
12. Lap-Top Computers FA-530 01/01/91 07/01/94 Allendale Mutual (2) $ 1,000
13. Exhibition Floater FA-530 01/01/91 07/01/94 Allendale Mutual (2) $ 5,000
14. Expediting and Decontamination Exp. FA-530 01/01/91 07/01/94 Allendale Mutual (1,2) $ 25,000
15. Ocean Cargo - "All-Risk" (Primary/Contingent) FA-530 01/01/92 07/01/94 Allendale Mutual -0-
16. Contractor's Equipment FA-530 01/01/92 07/01/94 Allendale Mutual 2,500
17. Transit - "All-States" (Rail, Truck, Air) FA-530 01/01/92 07/01/94 Allendale Mutual 1,000
18. Contingent Transit - Mexico (Rail, Truck, Air) FA-530 01/01/92 07/01/94 Allendale Mutual 1,000
19. Misc. Unsched. Locations - U.S. (warehouses) FA-530 01/01/92 07/01/94 Allendale Mutual (1,2) $ 25,000
20. Misc. Unsched. Locations - Mexico FA-530 01/01/93 07/01/94 Allendale Mutual (1,2) $ 25,000
21. Sched. Locations - Mexico (CSG-Delta Joist) FA-530 01/01/93 07/01/94 Allendale Mutual (1,2) $ 25,000
22. Flood: Visalia and Birmingham FA-530 01/01/93 07/01/94 Allendale Mutual 25,000
23. Primary Federal Flood Program: K.C. Plant TBA 12/31/93 12/31/94 Omaha Prop. & Cas. 5,000
24. Federal Flood Gap Cover: K.C. Plant FA-530 01/01/94 07/01/94 Allendale Mutual Excess Primary
25. Excess Flood - 1st Layer: K.C. Plant TBA 01/01/94 07/01/94 Mt. Hawley Ins. Co. Excess Primary
26. Excess Flood - 2nd Layer: K.C. Plant FA-530 01/01/94 07/01/94 Allendale Mutual Excess 1st Layer
OTHER INSURANCE
1. Builders Risk - "All-Risk" (US & Canada)** IM08001468 07/01/93 07/01/94 St. Paul Insurance (7) $ 2,500
2. Owners' & Contractors' Protective TF1-641-004136 01/01/94 01/01/95 Liberty Mutual -0-
3. International Business Travel Insurance*** ABL-660762 06/20/93 11/01/94 CIGNA -0-
(Covers Employees and Non-Employee
Erection Consultants)
4. Pollution & Remediation Legal Liability** NTL1634142 03/23/94 03/23/97 Planet (Reliance Ins.) 250,000
(Covers Parkersburg, WV property)
</TABLE>
<TABLE>
<CAPTION>
ANNUAL LIMITS PER A.M. BEST'S
PREMIUM ($U.S.) OCCURRENCE RATING
----------------- --------------------------- --------------
PROPERTY/MARINE INSURANCE
- - -------------------------
<S> <C> <C> <C>
1. Property Damage - "All-Risk" $ 305,975 (3)$ 378,112,000+BL-LMT A++ X
2. Business Interruption (incl. above) (3) 56,159,000+BL-LMT A++ X
3. Payroll (incl. above) (3) 76,053,000+BL-LMT A++ X
4. Blanket Extra Expense (Incl. EDP) 8,450 (4) 10,000,000 A++ X
5. Automatic Coverage - New Locations 730 (4) 5,000,000 A++ X
6. Errors & Omissions(Failure To Report) 2,075 (4) 5,000,000 A++ X
7. Valuable Papers (Records Retention) 1,500 (4) 5,000,000 A++ X
8. Off-Premises Service Interruption 4,623 (4,5) 7,500,000 A++ X
9. Contingent Bus. Interrupt. (Suppliers) 1,120 (4) 1,000,000 A++ X
10. Accounts Receivable 100 (4) 2,000,000 A++ X
11. Personal Computers 0 (4)(incl. in property damage limit above) A++ X
12. Lap-Top Computers 0 (4)(incl. in property damage limit above) A++ X
13. Exhibition Floater 114 (4) 200,000 A++ X
14. Expediting and Decontamination Exp. 0 (4) 1,000,000 A++ X
15. Ocean Cargo - "All-Risk"(Primary/Contingent) 40,700 1,500,000-under/on deck in container; A++ X
250,000-on deck with no container.
16. Contractor's Equipment 6,000 250,000/item; 500,000/loss A++ X
17. Transit - "All-States" (Rail, Truck, Air) 8,325 1,500,000 per conveyance A++ X
18. Contingent Transit - Mexico (Rail, Truck, Air) 13,034 1,500,000 per conveyance A++ X
19. Misc. Unsched. Locations - U.S. (warehouses) 4,132 4,000,000/1,000,000 Flood sub-limit A++ X
20. Misc. Unsched. Locations - Mexico 521 100,000 A++ X
21. Sched. Locations - Mexico (CSG-Delta Joist) (incl. above) (4) 1,000,000 A++ X
22. Flood: Visalia and Birmingham 2,819 25,000,000 A++ X
23. Primary Federal Flood Program: K.C. Plant 12,122 400,000 A- V
24. Federal Flood Gap Cover: K.C. Plant 10,000 Covers Fed. Flood gaps up to $1,000,000 A++ X
25. Excess Flood - 1st Layer: K.C. Plant 25,000 1,700,000 A VII
26. Excess Flood - 2nd Layer: K.C. Plant (incl. above) 22,300,000 A++ X
-------------
TOTAL: 447,340
OTHER INSURANCE
- - ---------------
1. Builders Risk - "All-Risk" (US & Canada)** 45,437 (6) 15,000,000 physical A+ XIV
2. Owners' & Contractors' Protective 47,352 (8) Up to 5,000,000 liability A- XV
3. International Business Travel Insurance*** 7,500 500,000 AD&D/person; A- XIV
(Covers Employees and Non-Employee 2,000,000 AD&D aggregate.
Erection Consultants)
4. Pollution & Remediation Legal Liability** 88,000 2,000,000 each loss and aggregate A- XI
(Covers Parkersburg, WV property) -------------
TOTAL: 188,289
-------------
GRAND TOTAL: $ 6,075,316
-------------
</TABLE>
** Brokered through Marsh & McLennan.
*** Brokered through Rollins Hudig Hall.
BL-LMT: Blanket limit coverage avails the combined full policy limits for
Property Damage, Business Interruption, and Payroll for a loss which
has exceeded the scheduled limits of a location.
NOTE: FULL DETAIL ON BUTLER BUILDING SYSTEMS LTD.'S U.K. COVERAGES/PREMIUMS
NOT REFLECTED ABOVE. PRIMARY COVERAGES ARE THROUGH CIGNA FOR LIABILITY AND
ALLENDALE FOR PROPERTY WITH ROLLINS HUDIG HALL AS BROKER.
FOOTNOTES:
(1): Self-retention limited to $25,000 per loss and annual aggregate of
$100,000 (retention drops to $5,000/loss thereafter) and applies to the
combined total of all types of loss for the occurrence.
(2): Self-retention per loss applicable to earthmovement for Calif., Alaska,
Hawaii, and Puerto Rico locations @ 5% of insured property replacement and
business interrupt. values, subject to $25,000 minimum.
(3): Coverage for Flood & Earthmovement each limited to $100,000,000 per
occurrence and aggregate ($10,000,000 Earthmovement limit/occur. & agg. for
Calif., Alaska, Hawaii, Puerto Rico locations).
(4): Coverage for Flood and Earthmovement each limited to limit shown per
occurrence. (Exception: Flood Limit of $1,000,000 for Automatic Coverage
for new locations.)
(5): Excludes coverage for Flood and Earthmovement at all locations.
(6): Sublimits: Quake (excl. CA) - $5,000,000; California - $500,000. Flood -
$500,000. Delayed Completion Coverage - $1,000,000 any one project. Real
Property of Others - $1,000,000. Transit/Off-site Storage - $300,000.
(7): General deductible of $2,500 deductible regardless of project size.
Sud-deductibles of $25,000 for Flood and $50,000 for Earthquake losses;
$10,000 for Delayed Completion losses.
<PAGE> 60
EXHIBIT A
BUTLER MANUFACTURING COMPANY
8.02% SENIOR NOTE
Due December 30, 2003
_____________
THIS NOTE MAY BE SUBJECT TO A HOME OFFICE PAYMENT AGREEMENT AND
ACCORDINGLY ANY PROSPECTIVE PURCHASER SHOULD FIRST VERIFY THE UNPAID PRINCIPAL
AMOUNT WITH THE COMPANY.
_____________
Registered Note No. R- ____ June ___, 1994
$____________________
BUTLER MANUFACTURING COMPANY, a Delaware corporation (the "Company"),
for value received, promises to pay to ___________________ or registered
assigns, on December 30, 2003, the principal amount of __________ Million
Dollars ($__________) and to pay interest (computed on the basis of a 360-day
year of twelve 30-day months) on the principal amount from time to time
remaining unpaid hereon at the rate of 8.02% per annum from the date hereof
until maturity, payable on June 30 and December 30 in each year, commencing
December 30, 1994, and at maturity, and to pay interest on overdue principal,
Make-Whole Amount and (to the extent legally enforceable) on any overdue
installment of interest at the rate of 10.02% per annum until paid. Payments
of the principal of, the Make-Whole Amount, if any, and interest on this Note
shall be made in lawful money of the United States of America in the manner and
at the place provided in Section 2.5 of the Note Agreement hereinafter defined.
This Note is issued under and pursuant to the terms and provisions of
the Note Agreement, dated as of June 1, 1994, entered into by the Company with
the Purchasers named in Schedule I thereto (the "Note Agreement"), and this
Note and any holder hereof are entitled to all of the benefits provided for by
such Note Agreement or referred to therein. Reference is made to the Note
Agreement for a statement of such benefits. Capitalized terms not otherwise
defined herein have the meanings ascribed to them in the Note Agreement.
As provided in the Note Agreement, upon surrender of this Note for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the
<PAGE> 61
registered holder hereof or its attorney duly authorized in writing, a new Note
for a like unpaid principal amount will be issued to, and registered in the
name of, the transferee upon the payment of the taxes or other governmental
charges, if any, that may be imposed in connection therewith. The Company may
treat the person in whose name this Note is registered as the owner hereof for
the purpose of receiving payment and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
This Note may be declared due prior to its expressed maturity date,
voluntary prepayments may be made hereon and certain prepayments are required
to be made, all in the events, on the terms and in the manner as provided in
the Note Agreement. Such prepayments include required prepayments on December
30 in each year, commencing December 30, 1997 through December 30, 2002,
inclusive, and certain optional prepayments with a Make-Whole Amount.
Should the indebtedness represented by this Note or any part thereof
be collected in any proceeding provided for in the Note Agreement or be placed
in the hands of attorneys for collection, the Company agrees to pay, in
addition to the principal, Make-Whole Amount, if any, and interest due and
payable hereon, all costs of collecting this Note, including reasonable
attorneys' fees and expenses.
This Note and the Note Agreement are governed by and construed in
accordance with the laws of the State of Illinois.
BUTLER MANUFACTURING COMPANY
By: _________________________
Its: _________________________
2
<PAGE> 62
GUARANTY ENDORSEMENT
Payment of principal, interest and Make-Whole Amount, if any, with
respect to this Note is guaranteed pursuant to the terms of the Subsidiary
Guaranty dated June ____, 1994 executed and delivered by each of the
undersigned. Subject to the terms of such Subsidiary Guaranty, which are
incorporated herein by reference, each of the undersigned, jointly and
severally, guarantees the prompt payment when due of the principal, Make-Whole
Amount, if any, and interest on this Note.
BMC REAL ESTATE, INC. BUTLER REAL ESTATE, INC.
By: _______________________________ By: ______________________________
Print Name: _______________________ Print Name: ________________________
Title: ___________________________ Title: _____________________________
BUCON, INC. LESTER'S OF MINNESOTA, INC.
By: _______________________________ By: ________________________________
Print Name: _______________________ Print Name: ________________________
Title: ___________________________ Title: ____________________________
BUTLER HOLDINGS, INC.
By:________________________________
Print Name: ______________________
Title: ____________________________
3
<PAGE> 63
EXHIBIT B
FORM OF
LEGAL OPINION
OF PURCHASERS' COUNSEL
The opinion of Gardner, Carton & Douglas, special counsel for the
Purchasers, shall be to the effect that:
1. The Company is a corporation validly existing in good standing
under the laws of the State of Delaware, with all requisite corporate power and
authority to enter into the Agreement and to issue and sell the Notes. Each of
the Guarantors is a corporation validly existing under the laws of its
jurisdiction of incorporation, with all requisite corporate power and authority
to enter into the Subsidiary Guaranty.
2. The Agreement, the Notes and the Subsidiary Guaranty have been
duly authorized by proper corporate action on the part of the Company and each
of the Guarantors to the extent a party thereto, have been duly executed and
delivered by an authorized officer thereof, and constitute the legal, valid and
binding agreements of the Company and each of the Guarantors to the extent a
party thereto, enforceable in accordance with their terms, except to the extent
that enforcement thereof may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws of general
application relating to or affecting the enforcement of the rights of creditors
or by equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
3. Based upon the representations set forth in the Agreement, the
offering, sale and delivery of the Notes do not require the registration of the
Notes under the Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
4. The issuance and sale of the Notes and compliance with the
terms and provisions of the Notes, the Agreement and the Subsidiary Guaranty
will not conflict with or result in any breach of any of the provisions of the
Certificate of Incorporation or By-Laws of the Company or the Guarantors.
The opinion of Gardner, Carton & Douglas also shall state that the legal
opinion of Lathrop & Norquist, counsel for the Company, delivered to you
pursuant to the Agreement, is satisfactory in form and scope to it, and, in its
opinion, the Purchasers and it are justified in relying thereon and shall cover
such other matters relating to the sale of the Notes as the Purchasers may
reasonably request.
<PAGE> 64
EXHIBIT C
FORM OF
LEGAL OPINION
OF COMPANY'S AND GUARANTORS' COUNSEL
(a) The opinion of Lathrop & Norquist, L.C., counsel to the
Company and the Guarantors, shall be to the effect that:
1. Each of the Company and each Guarantor is a corporation duly
organized and validly existing in good standing under the laws of its
jurisdiction of incorporation, and each has all requisite corporate power and
authority to carry on the business now being conducted by it, to own its
property and, in the case of the Company, to enter into and perform the
Agreement and to issue and sell the Notes and, in the case of the Guarantors,
to enter into and perform the Subsidiary Guaranty.
2. The Agreement, the Notes and the Subsidiary Guaranty have been
duly authorized by proper corporate action on the part of the Company and each
of Guarantors to the extent a party thereto, have been duly executed and
delivered by an authorized officer thereof, and constitute the legal, valid and
binding agreements of the Company and each of Guarantors to the extent a party
thereto, enforceable in accordance with their terms, except to the extent that
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application relating to
or affecting the enforcement of the rights of creditors or by equitable
principles, regardless of whether enforcement is sought in a proceeding in
equity or at law.
3. The offering, sale and delivery of the Notes and the delivery
of the Subsidiary Guaranty do not require the registration of the Notes or the
Subsidiary Guaranty under the Securities Act of 1933, as amended, or the
qualification of an indenture under the Trust Indenture Act of 1939, as
amended.
4. No authorization, approval or consent of any governmental or
regulatory body is necessary or required in connection with the lawful
execution and delivery by the Company of the Agreement, or the lawful offering,
issuance and sale by the Company of the Notes, and no designation, filing,
declaration, registration and/or qualification with any governmental authority
is required in connection with the offer, issuance and sale of the Notes by the
Company.
5. The issuance and sale of the Notes by the Company, compliance
with the terms and provisions of the Notes and the Agreement by the Company and
compliance with the terms and provisions of the Subsidiary Guaranty by each of
the Guarantors will not conflict with, or result in any breach or violation of
any of the provisions of, or constitute a default under, or result in the
creation or imposition of any Lien upon the property of the Company or any
Guarantor pursuant to the provisions of (i) the Certificate of Incorporation
(or other charter document) or By-Laws of the Company or any Guarantor, (ii)
any loan agreement or evidence of Indebtedness known to such
<PAGE> 65
counsel under which the Company or any Subsidiary is bound, or other agreement
or instrument known to such counsel under which the Company or any Subsidiary
is a party or by which any of them or their property is bound or may be
affected or (iii) any law (including usury laws) or regulation, order, writ,
injunction or decree of any court or governmental authority applicable to the
Company or any Subsidiary.
6. There are no actions, suits or proceedings with respect to
which counsel has been engaged to provide substantive attention pending, or, to
such counsel's knowledge, threatened against, or affecting the Company or any
Subsidiary, at law or in equity or before or by any Federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which are likely to result, individually
or in the aggregate, in a Material Adverse Effect.
7. Neither the Company nor any Guarantor is: (i) a "public
utility company" or a "holding company," or an "affiliate" or a "subsidiary
company" of a "holding company," or an "affiliate" of such a "subsidiary
company," as such terms are defined in the Public Utility Holding Company Act
of 1935, as amended, or (ii) a "public utility" as defined in the Federal Power
Act, as amended, or (iii) an "investment company" or an "affiliated person"
thereof, as such terms are defined in the Investment Company Act of 1940, as
amended.
8. The issuance of the Notes and the use of the proceeds of the
sale of the Notes do not violate or conflict with Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System (12 C.F.R., Chapter II).
The opinion of Lathrop & Norquist, L.C. shall cover such other matters
relating to the sale of the Notes as the Purchasers may reasonably request.
With respect to matters of fact on which such opinion is based, such counsel
shall be entitled to rely on appropriate certificates of public officials and
officers of the Company and the Guarantors. With respect to matters governed
by the laws of any jurisdiction other than the United States of America and the
States of Delaware and Missouri, such counsel may rely upon the opinions of
counsel deemed (and stated in their opinion to be deemed) by them to be
competent and reliable.
(b) The opinion of Richard O. Ballentine, Esq., General Counsel to
the Company and the Guarantors, shall be to the effect that:
There are no actions, suits or proceedings pending, or, to such
counsel's knowledge threatened against, or affecting the Company or any
Subsidiary, at law or in equity or before or by any Federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which are likely to result, individually
or in the aggregate, in a Material Adverse Effect.
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<PAGE> 66
EXHIBIT D
SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY (this "Guaranty") dated as of June
__, 1994 is made by BMC Real Estate, Inc., a Delaware corporation, BUCON, Inc.,
a Delaware corporation, Butler Holdings, Inc., a Delaware corporation, Butler
Real Estate, Inc., a Delaware corporation, and Lester's of Minnesota, Inc., a
Minnesota corporation (each individually a "Guarantor" and collectively the
"Guarantors"), in favor of the holders from time to time of the Notes
hereinafter referred to, including each Purchaser listed on Schedule I to the
Note Agreement hereinafter referred to and their respective successors and
assigns (collectively, the "Purchasers" and each individually, a "Purchaser").
W I T N E S S E T H:
WHEREAS, Butler Manufacturing Company, a Delaware corporation
(the "Company"), and the Purchasers listed on Schedule I thereto entered into a
Note Agreement dated as of June 1, 1994 (as amended, supplemented, restated or
otherwise modified from time to time in accordance with its terms and in
effect, the "Note Agreement");
WHEREAS, the Company owns all of the issued and outstanding
capital stock of the Guarantors and, by virtue of such ownership and otherwise,
the Guarantors will derive substantial benefits as a result of the purchase of
the Company's Notes (as defined in the Note Agreement) by the Purchasers;
WHEREAS, it is a condition precedent to the obligation of the
Purchasers to purchase the Company's Notes that the Guarantors shall have
executed and delivered this Guaranty to the Purchasers; and
WHEREAS, the Board of Directors of each Guarantor has
determined that the execution, delivery, and performance of this Guaranty is
necessary and convenient to the conduct, promotion and attainment of such
Guarantor's business and each of the Guarantors desires to execute this
Guaranty to satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the premises and other
benefits to the Guarantors, and of the purchase of the Company's Notes by the
Purchasers, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantors hereby makes this
Guaranty as follows:
SECTION 1. Definitions. Any capitalized terms not otherwise
herein defined, when used herein in capitalized form, shall have the respective
meanings attributed to them in the Note Agreement.
<PAGE> 67
SECTION 2. Guaranty. (a) The Guarantors, jointly and
severally, hereby unconditionally and irrevocably guarantee to the Purchasers
the due, prompt and complete payment by the Company of the principal of,
Make-Whole Amount, if any, and interest on, and each other amount due under,
the Notes, when and as the same shall become due and payable (whether at stated
maturity or by required or optional prepayment or by declaration or otherwise)
in accordance with the terms of the Notes and the Note Agreement (the Notes and
the Note Agreement being collectively hereinafter referred to as the "Note
Documents", and the amounts payable by the Company under any of the Note
Documents, and all other obligations of the Company thereunder, being sometimes
collectively hereinafter referred to as the "Obligations"). This guaranty is a
guaranty of payment, performance and compliance and not just of collectibility
and is in no way conditioned or contingent upon any attempt to collect from or
enforce performance or compliance by the Company or upon any other event,
contingency or circumstance whatsoever. If for any reason whatsoever the
Company shall fail or be unable duly, punctually and fully to pay such amounts
as and when the same shall become due and payable or to perform or comply with
any such obligation, covenant, term, condition or undertaking, whether or not
such failure or inability shall constitute a "Default" or an "Event of Default"
under any Note Document, the Guarantors, without demand, presentment, protest
or notice of any kind, will forthwith pay or cause to be paid such amounts to
the Purchasers under the terms of such Note Document, in lawful money of the
United States, at the place specified in the Note Agreement, or perform or
comply with the same or cause the same to be performed or complied with,
together with interest (to the extent provided for under such Note Document) on
any amount due and owing from the Company. The Guarantors, promptly after
demand, will pay to the Purchasers the reasonable costs and expenses of
collecting such amounts or otherwise enforcing this Guaranty, including,
without limitation, the reasonable fees and expenses of counsel. The right of
recovery against each of the Guarantors under this Guaranty is, however,
limited to the Fair Net Worth of such Guarantor, as of the date of any
determination thereof, less $20,000. For purposes of this Guaranty, the "Fair
Net Worth" of any Guarantor shall mean an amount equal to the fair market value
of such Guarantor's assets less all its liabilities (other than such
Guarantor's liabilities under this Guaranty), including all liabilities,
whether fixed or contingent, direct or indirect, disputed or undisputed,
secured or unsecured, and whether or not required to be reflected on a balance
sheet prepared in accordance with generally accepted accounting principles.
(b) Each Guarantor hereby agrees that to the extent a
Guarantor shall have paid more than its proportionate share of any payment made
hereunder, such Guarantor shall be entitled to seek and receive contribution
from and against any other Guarantor hereunder who has not paid its
proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 6 hereof. The
provisions of this paragraph (b) shall in no respect limit the obligations and
liabilities of any Guarantor to the Purchasers, and each Guarantor shall remain
liable to the Purchasers for the full amount guaranteed by such Guarantor
hereunder.
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<PAGE> 68
SECTION 3. Guarantor's Obligations Absolute and
Unconditional. The obligations of each Guarantor under this Guaranty shall be
primary, absolute and unconditional obligations of such Guarantor, shall not be
subject to any counterclaim, set-off, deduction, diminution, abatement,
recoupment, suspension, deferment, reduction or defense based upon any claim
such Guarantor or any other Person may have against the Company or any other
Person, and to the full extent permitted by applicable law shall remain in full
force and effect without regard to, and shall not be released, discharged or in
any way affected by, any circumstance or condition whatsoever (whether or not
any Guarantor or the Company shall have any knowledge or notice thereof),
including, without limitation:
(a) any termination, amendment or modification of or deletion from
or addition or supplement to or other change in any of the Note Documents or
any other instrument or agreement applicable to any of the parties to any of
the Note Documents;
(b) any furnishing or acceptance of any security, or any release
of any security, for the Obligations, or the failure of any security or the
failure of any Person to perfect any interest in any collateral;
(c) any failure, omission or delay on the part of the Company to
conform or comply with any term of any of the Note Documents or any other
instrument or agreement referred to in paragraph (a) above, including, without
limitation, failure to give notice to any Guarantor of the occurrence of a
"Default" or an "Event of Default" under any Note Document;
(d) any waiver of the payment, performance or observance of any of
the obligations, conditions, covenants or agreements contained in any Note
Document, or any other waiver, consent, extension, indulgence, compromise,
settlement, release or other action or inaction under or in respect of any of
the Note Documents or any other instrument or agreement referred to in
paragraph (a) above or any obligation or liability of the Company, or any
exercise or non-exercise of any right, remedy, power or privilege under or in
respect of any such instrument or agreement or any such obligation or
liability;
(e) any failure, omission or delay on the part of any of the
Purchasers to enforce, assert or exercise any right, power or remedy conferred
on such Purchaser in this Guaranty, or any such failure, omission or delay on
the part of such Purchaser in connection with any Note Document, or any other
action on the part of such Purchaser;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit of
creditors, composition, receivership, conservatorship, custodianship,
liquidation, marshalling of assets and liabilities or similar proceedings with
respect to the Company, any Guarantor or to any other Person or any of their
respective properties or creditors, or any action taken by any trustee or
receiver or by any court in any such proceeding;
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<PAGE> 69
(g) any limitation on the liability or obligations of the Company
or any other Person under any of the Note Documents, or any discharge,
termination, cancellation, frustration, irregularity, invalidity or
unenforceability, in whole or in part, of any of the Note Documents or any
other agreement or instrument referred to in paragraph (a) above or any term
hereof;
(h) any merger or consolidation of the Company or any Guarantor
into or with any other corporation, or any sale, lease or transfer of any of
the assets of the Company or any Guarantor to any other Person;
(i) any change in the ownership of any shares of capital stock of
the Company or any change in the corporate relationship between the Company and
any Guarantor, or any termination of such relationship;
(j) any release or discharge, by operation of law, of any
Guarantor from the performance or observance of any obligation, covenant or
agreement contained in this Guaranty;
(k) any lack of corporate power of the Company or any other Person
at any time liable for part or all of the Obligations;
(l) the existence of any claim, defense, set-off, or other rights
which the Company or any Guarantor may have at any time against the Purchasers,
the Company or any Guarantor, or any other Person, whether in connection with
this Guaranty, the Note Documents, the transactions contemplated thereby, or
any other transaction;
(m) any failure of any Purchaser to notify any Guarantor of any
renewal, extension, or assignment of the Obligations or any part thereof, or
the release of any security, or if any action taken or refrained from being
taken by any Purchaser, it being understood that the Purchasers shall not be
required to give any Guarantor any notice of any kind under any circumstance
whatsoever with respect to or in connection with the Obligations; or
(n) any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether foreseen or
unforeseen, and any other circumstance which might otherwise constitute a legal
or equitable defense or discharge of the liabilities of a guarantor or surety
or which might otherwise limit recourse against any Guarantor.
SECTION 4. Full Recourse Obligations. The obligations of
each of the Guarantors set forth herein constitute the full recourse
obligations of such Guarantor enforceable against it to the full extent of all
its assets and properties.
SECTION 5. Waiver. Each of the Guarantors unconditionally
waives, to the extent permitted by applicable law, (a) notice of any of the
matters referred to in Section 3,
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<PAGE> 70
(b) notice to the Guarantor of the incurrence of any of the Obligations, notice
to the Guarantor or the Company of any breach or default by the Company with
respect to any of the Obligations or any other notice that may be required, by
statute, rule of law or otherwise, to preserve any rights of the Purchasers
against the Guarantor, (c) presentment to or demand of payment from the Company
or the Guarantor with respect to any amount due under any Note Document or
protest for nonpayment or dishonor, (d) any right to the enforcement, assertion
or exercise by any of the Purchasers of any right, power, privilege or remedy
conferred in the Note Agreement or any other Note Document or otherwise, (e)
any requirement of diligence on the part of any of the Purchasers, (f) any
requirement to exhaust any remedies or to mitigate the damages resulting from
any default under any Note Document, (g) any notice of any sale, transfer or
other disposition by any of the Purchasers of any right, title to or interest
in the Note Agreement or in any other Note Document, (h) any right to assert
against any Purchaser as a counterclaim, set-off or cross-claim, any
counterclaim, set-off or claim which it may now or hereafter have against the
Company or other Person liable on the Obligations, and (i) any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or which might otherwise
limit recourse against the Guarantor.
SECTION 6. No Subrogation, Contribution, Reimbursement or
Indemnity. Notwithstanding anything to the contrary in this Guaranty and the
other Note Documents, each of the Guarantors hereby irrevocably waives any and
all claims or other rights which may have arisen in connection with this
Guaranty to be subrogated to any of the rights (whether contractual, under the
United States Bankruptcy Code, as amended, including Section 509 thereof, under
common law or otherwise) of any of the Purchasers against the Company or
against any collateral security or guaranty or right of offset held by the
Purchasers for the payment of the Obligations. Each of the Guarantors hereby
further irrevocably waives all contractual, common law, statutory or other
rights of reimbursement, contribution, exoneration or indemnity (or any similar
right) from or against the Company which may have arisen in connection with
this Guaranty, whether or not such remedy or right arises in equity, or under
contract, statute or common law. So long as the Obligations remain, if any
amount shall be paid by or on behalf of the Company to any of the Guarantors on
account of any of the rights waived in this paragraph, such amount shall be
held by the Guarantor in trust for the benefit of the Purchasers, segregated
from other funds of the Guarantor, and shall, forthwith upon receipt by the
Guarantor, be turned over to the Purchasers (duly indorsed by such Guarantor to
the Purchasers, if required), to be applied against the Obligations, whether
matured or unmatured, in such order as the Purchasers may determine. The
provisions of this paragraph shall survive the term of this Guaranty and the
payment in full of the Obligations. Each Guarantor acknowledges that it will
receive direct and indirect benefits from the sale of the Notes by the Company
and that the waiver set forth in this Section 6 is knowingly made in
contemplation of such benefits.
SECTION 7. Effect of Bankruptcy Proceedings, etc. This
Guaranty shall continue to be effective or be automatically reinstated, as the
case may be, if at any time payment, in whole or in part, of any of the sums
due to any of the Purchasers pursuant to the terms of the Note Agreement or any
other Note Document is rescinded or must otherwise be restored or returned by
such Purchaser upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Company or any other Person, or upon or as a result
of the appointment
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<PAGE> 71
of a custodian, receiver, trustee or other officer with similar powers with
respect to the Company or other Person or any substantial part of its property,
or otherwise, all as though such payment had not been made. If an event
permitting the acceleration of the maturity of the principal amount of the
Notes shall at any time have occurred and be continuing, and such acceleration
shall at such time be prevented by reason of the pendency against the Company
or any other Person of a case or proceeding under a bankruptcy or insolvency
law, each of the Guarantors agrees that, for purposes of this Guaranty and its
obligations hereunder, the maturity of the principal amount of the Notes and
all other Obligations shall be deemed to have been accelerated with the same
effect as if any Purchaser had accelerated the same in accordance with the
terms of the Note Agreement or other applicable Note Document, and the
Guarantors shall forthwith pay such principal amount, Make-Whole Amount, if
any, and interest thereon and any other amounts guaranteed hereunder without
further notice or demand.
SECTION 8. Term of Agreement. This Guaranty and all
guaranties, covenants and agreements of the Guarantors contained herein shall
continue in full force and effect and shall not be discharged until such time
as all of the Obligations shall be paid and performed in full and all of the
agreements of the Guarantors hereunder shall be duly paid and performed in
full.
SECTION 9. Representations and Warranties. Each of the
Guarantors hereby represents and warrants to each Purchaser that all
representations and warranties set forth in Section 3.1 of the Note Agreement
(each of which is incorporated herein by reference) as to itself and not as to
any other Person are true and correct.
SECTION 10. Notices. All notices under the terms and
provisions hereof shall be in writing, and shall be delivered or sent by
overnight delivery or telecopy or mailed by first-class mail, postage prepaid,
addressed (a) if to the Company or any Purchaser at the address set forth in
the Note Agreement or (b) if to any of the Guarantors, at:
BMA Tower
31st Street and Southwest Trafficway
Kansas City, Missouri 64108
or at such other address as the Guarantors shall from time to time designate in
writing to the Purchasers. Any notice so addressed shall be deemed to be given
when so delivered or sent or, if mailed, on the third Business Day after being
so mailed.
SECTION 11. Survival. All warranties, representations and
covenants made by the Guarantors herein or in any certificate or other
instrument delivered by it or on its behalf hereunder shall be considered to
have been relied upon by the Purchasers and shall survive the execution and
delivery of this Guaranty, regardless of any investigation made by any of the
Purchasers. All statements in any such certificate or other instrument shall
constitute warranties and representations by the Guarantors hereunder.
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<PAGE> 72
SECTION 12. Miscellaneous. Any provision of this Guaranty
which 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 not invalidate
or render unenforceable such provision in any other jurisdiction. To the
extent permitted by applicable law, each of the Guarantors hereby waives any
provision of law that renders any provisions hereof prohibited or unenforceable
in any respect. The terms of this Guaranty shall be binding upon, and inure to
the benefit of, the Guarantors and the Purchasers and their respective
successors and assigns. No term or provision of this Guaranty may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the Guarantors and the Purchasers. The section and paragraph
headings in this Guaranty are for convenience of reference only and shall not
modify, define, expand or limit any of the terms or provisions hereof, and all
references herein to numbered sections, unless otherwise indicated, are to
sections in this Guaranty.
SECTION 13. Information. Each Guarantor acknowledges and
agrees that it shall have the sole responsibility for obtaining from the
Company such information concerning the Company's financial condition or
business operations as such Guarantor may require, and that none of the
Purchasers has any duty at any time to disclose to any Guarantor any
information relating to the business operations or financial conditions of the
Company.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS AND THE
UNITED STATES OF AMERICA. WITHOUT EXCLUDING ANY OTHER JURISDICTION, EACH
GUARANTOR AGREES THAT THE STATE AND FEDERAL COURTS OF ILLINOIS LOCATED IN
CHICAGO, ILLINOIS SHALL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION
HEREWITH.
SECTION 15. WAIVER OF JURY TRIAL. EACH GUARANTOR AND EACH
PURCHASER HEREBY KNOWINGLY, VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVES,
TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY
OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION
IS A MATERIAL INDUCEMENT TO EACH PURCHASER ENTERING INTO THE NOTE AGREEMENT.
SECTION 16. Ratable Benefit. This Guaranty is for the
ratable benefit of the Purchasers, each of which shall share any proceeds of
this Guaranty pursuant to the terms of the Note Agreement.
SECTION 17. Guarantor Insolvency. Should any Guarantor
become insolvent, fail to pay its debts generally as they become due,
voluntarily seek, consent to, or acquiesce in the benefits of any Bankruptcy
Law or become a party to or be made the subject of any proceeding provided for
by any Bankruptcy Law (other than as a creditor or claimant) that could suspend
or
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<PAGE> 73
otherwise adversely affect the rights of any Purchaser granted hereunder, then
the obligations of such Guarantor under this Guaranty shall be, as between such
Guarantor and such Purchaser, a fully-matured, due, and payable obligation of
such Guarantor to such Purchaser (without regard to whether the Company is then
in default under the Note Agreement or whether any part of the Obligations is
then due and owing by the Company to such Purchaser), payable in full by such
Guarantor to such Purchaser upon demand, which shall be the estimated amount
owing in respect of the contingent claim created hereunder.
[THE REST OF THIS PAGE LEFT BLANK INTENTIONALLY]
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<PAGE> 74
IN WITNESS WHEREOF, each of the Guarantors has caused this
Guaranty to be duly executed as of the day and year first above written.
BMC REAL ESTATE, INC. BUTLER REAL ESTATE, INC.
By: ____________________________ By: ____________________________
Print Name: ____________________ Print Name: ____________________
Title: _________________________ Title: _________________________
BUCON, INC. LESTER'S OF MINNESOTA, INC.
By: ____________________________ By:_____________________________
Print Name: ____________________ Print Name: ____________________
Title: _________________________ Title: _________________________
BUTLER HOLDINGS, INC.
By:_____________________________
Print Name: ____________________
Title: _________________________
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<PAGE> 1
KPMG Peat Marwick Exhibit 15
Certified Public Accountants
1000 Walnut, Suite 1600
P.O. box 13127
Kansas City, MO 64199
INDEPENDENT ACCOUNTANTS' REPORT
The Board of Directors
Butler Manufacturing Company:
We have reviewed the condensed consolidated balance sheet of Butler
Manufacturing Company and subsidiaries as of June 30, 1994 and the related
condensed consolidated statements of operations and cash flows for the
three-month and six month periods ended June 30, 1994 and 1993. These financial
statements are the responsibility of Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1993 and the
related consolidated statements of operations and retained earnings and cash
flows for the year then ended (not included herein); and in our report dated
February 4, 1994, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 1993 is
fairly stated in all material respects in relation to the consolidated balance
sheet from which it has been derived.
/s/ KPMG Peat Marwick
July 15, 1994
<PAGE> 2
Exhibit 15
KPMG Peat Marwick
Certified Public Accountants
1000 Walnut, Suite 1600
P.O. box 13127
Kansas City, MO 64199
The Board of Directors
Butler Manufacturing Company:
RE: Registration Statement No. 2-55753, 2-36370 and 2-63830
With respect to the subject registration statements, we acknowledge our
awareness of the use therein of our report dated July 15, 1994 related to our
review of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report
is not considered a part of a registration statement prepared or certified by
an accountant or a report prepared or certified by an accountant within the
meaning of Sections 7 and 11 of the Act.
/s/ KPMG Peat Marwick
Kansas City, Missouri
July 15, 1994
<PAGE> 1
Exhibit 19
Butler
Manufacturing
Company
SECOND
QUARTER
REPORT 1994
Six Months Ended
June 30, 1994
BMA TOWER PENN VALLEY PARK KANSAS CITY, MO 64141
To Our Shareholders:
Second quarter results for Butler were very good, and prospects and order
activity are quite encouraging for the remainder of this year. Quarterly sales
of $175.4 million were up 21% from a year ago, and net earnings of $5.1 million,
or $1.04 per share, were more than double the $.51 per share profit for the same
quarter last year.
For the first six months of 1994, sales were $292.5 million, an increase of 14%
over last year. Year-to-date earnings of $3.7 million, or $.76 per share,
compare with earnings of $1.2 million, or $.24 per share, for the first half of
1993.
The current strength of Butler's continuing businesses is even more apparent
when adjustment is made for the Walker division, which was sold in December
1993. The 1993 second quarter and six month results include sales of $10
million and $19.7 million, respectively, and net earnings of $600,000 ($.13 per
share) and $900,000 ($.19 per share), respectively, from the Walker Division,
net of estimated interest expense savings.
Improvement in economic conditions and Butler's performance were evident in most
every market we serve, with the exception of Europe. All U.S. business units in
our Building Systems Segment showed strong gains in sales and earnings compared
to a year ago. The increased contribution from our U.S. pre-engineered metal
buildings business was particularly significant in the first half of 1994.
Lester wood frame building sales and earnings were also dramatically higher,
aided by continuing good opportunities in livestock confinement structures.
Export sales also remained strong, particularly to Mexico and China, and were up
27% from the first half of last year. We continue to make modest additonal
investments in Europe to expand our sales capability and customer base, in the
face of still depressed conditions in most areas of the European construction
market. As a result, our European business showed a loss for the first six
months, and we expect it will lose about $2 million for the full year.
The Construction Services Segment's sales were up 42% in the first half, and
earnings were also higher. Numerous large multinational companies are finding
Butler's building systems and construction services ideally suited for their
expansion plans in the U.S. and abroad.
Our Other Building Products Segment benefited from continued strong recovery
by the Vistawall architectural products division. Year-to-date sales for
Vistawall were up 21% with excellent earnings, compared to a modest loss last
year. Grain Systems remained nicely profitable, although somewhat below the
level of a year ago.
A few weeks ago we successfully concluded a refinancing of the Company's debt
and credit facility. We obtained $35 million through a private placement with
four insurance companies. These notes are unsecured, carry a fixed
interest rate of 8.02% and have an average life of 6.5 years. In addition we
replaced two domestic credit agreements with a single $50 million revolving
credit facility provided by four leading banking institutions. Butler's debt to
total capital ratio is now approximately 40%, and the Company is well positioned
to fund future growth requirements and investment opportunities.
Our backlog of $254 million at mid-year was at a record high level and was up
48% from this same time last year (net of Walker). U.S. and export metal
building systems, Construction Services, Vistawall, and Lester wood frame
buildings all have considerably stronger order rates than a year ago. Based on
our progress to date and our current momentum, we anticipate very satisfactory
results for Butler shareholders for all of 1994, albeit at a rate of improvement
in the second half less than that experienced in the first half of this year.
Cordially yours,
/s/ Robert H. West
Robert H. West
Chairman and
Chief Executive Officer
July 15, 1994
Butler Manufacturing Company
