SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to
Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 17, 1995
THE CHERRY CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-8955 36-2977756
(Commission File Number) (I.R.S. Employer Identification Number)
3600 Sunset Avenue, Waukegan, Illinois 60087
(Address of Principal Executive Offices) (Zip Code)
(708) 662-9200
(Registrant's Telephone Number, Including Area Code)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
EXHIBITS
Number Description of Exhibit
4.a Note Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE CHERRY CORPORATION
By: /s/ Dan A. King
Dan A. King
Vice President of Finance, Treasurer
and Secretary
Dated: October 17, 1995<PAGE>
The Cherry Corporation
Note Agreement
Dated as of July 15, 1995
Re: $25,000,000 6.99% Senior Notes
Due July 15, 2007
Table of Contents
(Not a part of the Agreement)
Section HeadingPage
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1 .Description of Notes and Commitment. . . . . . . . . . . . . . . 1
Section 1.1.Description of Notes . . . . . . . . . . . . . . . . . . . 1
Section 1.2.Commitment, Closing Date . . . . . . . . . . . . . . . . . 1
Section 1.3.Several Commitments . . . . . . . . . . . . . . . . . . . 2
Section 2.Prepayment of Notes. . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.1.Required Prepayments . . . . . . . . . . . . . . . . . . . 2
Section 2.2.Optional Prepayment with Premium . . . . . . . . . . . . . 2
Section 2.3.Notice of Optional Prepayments . . . . . . . . . . . . . . 3
Section 2.4.Application of Prepayments . . . . . . . . . . . . . . . . 3
Section 2.5.Direct Payment . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.Representations. . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.1.Representations of the Company . . . . . . . . . . . . . . 3
Section 3.2.Representations of the Purchasers . . . . . . . . . . . . 3
Section 4.Closing Conditions . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.1.Conditions . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.2.Waiver of Conditions . . . . . . . . . . . . . . . . . . . 5
Section 5.Company Covenants . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.1.Corporate Existence, Etc . . . . . . . . . . . . . . . . . 5
Section 5.2.Insurance . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.3.Taxes, Claims for Labor and Materials, Compliance with Laws 6
Section 5.4.Maintenance, Etc . . . . . . . . . . . . . . . . . . . . . 6
Section 5.5.Nature of Business . . . . . . . . . . . . . . . . . . . . 6
Section 5.6.Adjusted Consolidated Net Worth . . . . . . . . . . . . . 6
Section 5.7.Limitations on Current Debt and Funded Debt . . . . . . . 7
Section 5.8.Limitation on Liens . . . . . . . . . . . . . . . . . . . 8
Section 5.9.Limitation on Sale and Leasebacks . . . . . . . . . . . . 9
Section 5.10.Mergers, Consolidations and Sales of Assets . . . . . . . 9
Section 5.11.Repurchase of Notes . . . . . . . . . . . . . . . . . . 11
Section 5.12.Transactions with Affiliates . . . . . . . . . . . . . 11
Section 5.13.Termination of Pension Plans . . . . . . . . . . . . . 12
Section 5.14.Reports and Rights of Inspection . . . . . . . . . . . 12
Section 6.Events of Default and Remedies Therefor . . . . . . . . . . . . 15
Section 6.1.Events of Default . . . . . . . . . . . . . . . . . . . 15
Section 6.2.Notice to Holders . . . . . . . . . . . . . . . . . . . 17
Section 6.3.Acceleration of Maturities . . . . . . . . . . . . . . . 17
Section 6.4.Rescission of Acceleration . . . . . . . . . . . . . . . 17
Section 7.Amendments, Waivers and Consents . . . . . . . . . . . . . . . 18
Section 7.1.Consent Required . . . . . . . . . . . . . . . . . . . . 18
Section 7.2.Solicitation of Holders . . . . . . . . . . . . . . . . 18
Section 7.3.Effect of Amendment or Waiver . . . . . . . . . . . . . 18
Section 8.Interpretation of Agreement; Definitions . . . . . . . . . . . 18
Section 8.1.Definitions . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.2.Accounting Principles . . . . . . . . . . . . . . . . . 25
Section 8.3.Directly or Indirectly . . . . . . . . . . . . . . . . . 25
Section 9.Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 9.1.Registered Notes . . . . . . . . . . . . . . . . . . . . 25
Section 9.2.Exchange of Notes . . . . . . . . . . . . . . . . . . . 26
Section 9.3.Loss, Theft, Etc. of Notes . . . . . . . . . . . . . . . 26
Section 9.4.Expenses, Stamp Tax Indemnity . . . . . . . . . . . . . 27
Section 9.5.Powers and Rights Not Waived; Remedies Cumulative . . . 27
Section 9.6.Notices . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 9.7.Successors and Assigns . . . . . . . . . . . . . . . . . 28
Section 9.8.Survival of Covenants and Representations . . . . . . . 28
Section 9.9.Severability . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.10.Governing Law . . . . . . . . . . . . . . . . . . . . . 28
Section 9.11.Captions . . . . . . . . . . . . . . . . . . . . . . . 28
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Attachments to Note Agreement:
Schedule I - Names of Note Purchasers and Amounts of Commitments
Schedule II - Liens Securing Funded Debt (including Capitalized Leases)
as of the Closing Date
Schedule III - Investments as of the Closing Date
Exhibit A - Form of 6.99% Senior Note due July 15, 2007
Exhibit B - Representations and Warranties of the Company
Exhibit C - Description of Special Counsel's Closing Opinion
Exhibit D - Description of Closing Opinion of Counsel to the Company
The Cherry Corporation
3600 Sunset Avenue
Waukegan, Illinois 60087
Note Agreement
Re: $25,000,000 6.99% Senior Notes
Due July 15, 2007
Dated as of
July 15, 1995
To the Purchasers named on Schedule I
to this Agreement
The undersigned, The Cherry Corporation, a Delaware corporation (the
"Company"), agrees with the Purchasers named on Schedule I to this Agreement
(the "Purchasers") as follows:
Section 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. The Company will authorize the
issue and sale of $25,000,000 aggregate principal amount of its 6.99% Senior
Notes (the "Notes") to be dated the date of issue, to bear interest from such
date at the rate of 6.99% per annum, payable semiannually on the fifteenth
day of each January and July in each year (commencing January 15, 1996) and
at maturity and to bear interest on overdue principal (including any overdue
required or optional prepayment of principal) and premium, if any, and (to
the extent legally enforceable) on any overdue installment of interest at the
rate of 8.99% per annum after the date due, whether by acceleration or
otherwise, until paid, to be expressed to mature on July 15, 2007, and to be
substantially in the form attached hereto as Exhibit A. Interest on the
Notes shall be computed on the basis of a 360-day year of twelve 30-day
months. The Notes are not subject to prepayment or redemption at the option
of the Company prior to their expressed maturity dates except on the terms
and conditions and in the amounts and with the premium, if any, set forth in
Section 2 of this Agreement. The term "Notes" as used herein shall include
each Note delivered pursuant to this Agreement.
Section 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 each
Purchaser, and such Purchaser agrees to purchase from the Company, Notes in
the principal amount set forth opposite such Purchaser's name on Schedule I
hereto at a price of 100% of the principal amount thereof on the Closing Date
hereinafter mentioned.
Delivery of the Notes will be made at the offices of Chapman and Cutler,
111 West Monroe Street, Chicago, Illinois 60603, against payment therefor in
Federal Reserve or other funds current and immediately available at the
principal office of Harris Trust and Savings Bank, 111 West Monroe Street,
Chicago, Illinois 60603, (ABA # 071-000-288) for credit to Account No.
209-604-8 in the amount of the purchase price at 10:00 a.m. Chicago time, on
July 28, 1995 or such later date (not later than July 31, 1995) as shall
mutually be agreed upon by the Company and the Purchasers (the "Closing
Date"). The Notes delivered to each Purchaser on the Closing Date will be
delivered to such Purchaser in the form of a single registered Note in the
form attached hereto as Exhibit A for the full amount of such Purchaser's
purchase (unless different denominations are specified by such Purchaser),
registered in such Purchaser's name or in the name of such Purchaser's
nominee, all as such Purchaser may specify at any time prior to the date
fixed for delivery.
Section 1.3. Several Commitments. The obligations of the Purchasers
shall be several and not joint and no Purchaser shall be liable or
responsible for the acts or defaults of any other Purchaser.
Section 2. PREPAYMENT OF NOTES.
Section 2.1. Required Prepayments. The Company agrees that on July 15
in each year, commencing July 15, 2003 and ending July 15, 2006, both
inclusive, it will prepay and apply and there shall become due and payable on
the principal indebtedness evidenced by the Notes an amount equal to the
lesser of (i) $5,000,000 or (ii) the principal amount of the Notes then
outstanding. The entire remaining principal amount of the Notes shall become
due and payable on July 15, 2007. No premium shall be payable in connection
with any required prepayment made pursuant to this Section 2.1. For purposes
of this Section 2.1, any prepayment of less than all of the outstanding Notes
pursuant to Section 2.2 shall be deemed to be applied first, to the amount of
principal scheduled to remain unpaid on July 15, 2007, and then to the
remaining scheduled principal payments in inverse chronological order.
In the event of any purchase or other acquisition by the Company of less
than all of the Notes pursuant to Section 5.10 or as described in Section
5.11, the amount of the payment required at maturity and each prepayment
required to be made pursuant to this Section 2.1 shall be reduced in the
proportion that the principal amount of such purchase or other acquisition
bears to the unpaid principal amount of the Notes immediately prior to such
purchase or other acquisition (after giving effect to any prepayment made
pursuant to this Section 2.1 on the date of such purchase or other
acquisition).
Section 2.2. Optional Prepayment with Premium. In addition to the
payments required by Section 2.1, upon compliance with Section 2.3, the
Company shall have the privilege, on any interest payment date, of prepaying
the outstanding Notes, either in whole or in part (but if in part then in a
minimum principal amount of $1,000,000) by payment of the principal amount of
the Notes, or portion thereof to be prepaid, and accrued interest thereon to
the date of such prepayment, together with a premium equal to the Make-Whole
Amount, determined as of five business days prior to the date of such
prepayment pursuant to this Section 2.2.
Section 2.3. Notice of Optional Prepayments. The Company will give
notice of any prepayment of the Notes pursuant to Section 2.2 to each Holder
thereof not less than 30 days nor more than 60 days before the date fixed for
such optional prepayment specifying (i) such date, (ii) the principal amount
of the Holder's Notes to be prepaid on such date, (iii) that a premium may be
payable, (iv) the date when such premium will be calculated, (v) the
estimated premium, and (vi) 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 accrued
interest thereon and the premium, if any, payable with respect thereto shall
become due and payable on the prepayment date specified in said notice. Not
later than two business days prior to the prepayment date specified in such
notice, the Company shall provide each Holder written notice of the premium,
if any, payable in connection with such prepayment and, whether or not any
premium is payable, a reasonably detailed computation of the Make-Whole
Amount.
Section 2.4. Application of Prepayments. All partial prepayments
pursuant to Sections 2.1 and 2.2 shall be applied on all outstanding Notes
ratably in accordance with the unpaid principal amounts thereof.
Section 2.5. Direct Payment. Notwithstanding anything to the contrary
contained in this Agreement or the Notes, in the case of any Note owned by
any Holder that is a Purchaser or any other Institutional Holder which has
given written notice to the Company requesting that the provisions of this
Section 2.5 shall apply, the Company will punctually pay when due the
principal thereof, interest thereon and premium, if any, due with respect to
said principal, without any presentment thereof, directly to such Holder at
its address set forth herein or such other address as such Holder may from
time to time designate in writing to the Company or, if a bank account with a
United States bank is so designated for such Holder, the Company will make
such payments in immediately available funds to such bank account, marked for
attention as indicated, or in such other manner or to such other account in
any United States bank as such Holder may from time to time direct in
writing.
Section 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company represents
and warrants that all representations and warranties set forth in Exhibit B
are true and correct as of the date hereof and are incorporated herein by
reference with the same force and effect as though herein set forth in full.
Section 3.2. Representations of the Purchasers. Each Purchaser
represents, and in entering into this Agreement the Company understands, that
such Purchaser is acquiring the Notes for the purpose of investment and not
with a view to the distribution thereof, and that such Purchaser has no
present intention of selling, negotiating or otherwise disposing of the
Notes; it being understood, however, that the disposition of such Purchaser's
property shall at all times be and remain within its control. Each Purchaser
represents that it is an Institutional Holder. Each Purchaser further
represents that at least one of the following statements is an accurate
representation as to the source of funds to be used by such Purchaser to pay
the purchase price of the Notes purchased by it hereunder:
(a) if such Purchaser is an insurance company, no part of such
funds constitutes assets allocated to any separate account maintained by
such Purchaser in which any employee benefit plan (or its related trust)
has any interest; or
(b) if such Purchaser is an insurance company, to the extent that
any part of such funds constitutes assets allocated to any separate
account maintained by such Purchaser in which any employee benefit plan
(or its related trust) has any interest, (i) such separate account is a
"pooled separate account" within the meaning of Prohibited Transaction
Class Exemption 90-1, as amended, in which case such Purchaser has
disclosed to the Company the name of each employee benefit plan whose
assets in such separate account exceed 10% of the total assets or are
expected to exceed 10% of the total assets of such account as of the
date of such purchase (and for the purposes of this paragraph (b), all
employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan), or (ii) such separate
account contains only the assets of a specific employee benefit plan,
complete and accurate information as to the identity of which such
Purchaser has delivered to the Company; or
(c) if such Purchaser is other than an insurance company, no part
of such funds constitutes "plan assets".
As used in this Section 3.2, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section
3 of ERISA and the term "plan assets" shall have the meaning specified in
Department of Labor Regulation Section 2510.3-101.
Section 4. CLOSING CONDITIONS.
Section 4.1. Conditions. The obligation of each Purchaser to purchase
the Notes on the Closing Date shall be subject to the performance by the
Company of its agreements hereunder which by the terms hereof are to be
performed at or prior to the time of delivery of the Notes and to the
following further conditions precedent:
(a) Closing Certificate. Such Purchaser shall have received a
certificate dated the Closing Date, signed by the President or a Vice
President of the Company, the truth and accuracy of which shall be a
condition to such Purchaser's obligation to purchase the Notes proposed
to be sold to such Purchaser and to the effect that (i) the
representations and warranties of the Company set forth in Exhibit B
hereto are true and correct on and with respect to the Closing Date,
(ii) the Company has performed all of its obligations hereunder which
are to be performed on or prior to the Closing Date, and (iii) no
Default or Event of Default has occurred and is continuing.
(b) Legal Opinions. Such Purchaser shall have received from
Chapman and Cutler, who are acting as special counsel to the Purchasers
in this transaction, and from McDermott, Will & Emery, counsel for the
Company, their respective opinions dated the Closing Date, in form and
substance satisfactory to such Purchaser, and covering the matters set
forth in Exhibits C and D, respectively, hereto.
(c) Related Transactions. The Company shall have consummated the
sale of the entire principal amount of the Notes scheduled to be sold on
the Closing Date pursuant to this Agreement.
(d) Legal Investment. On the Closing Date, the Notes purchased by
such Purchaser shall qualify as legal investments under the laws and
regulations of each jurisdiction to which such Purchaser is subject
(without resort to so called "basket provisions" permitting limited
investments by it without restriction as to the character of a
particular investment) and such Purchaser shall have received such
certificates or other evidence as it may reasonably request to establish
compliance with this condition.
(e) Satisfactory Proceedings. All proceedings taken in connection
with the transactions contemplated by this Agreement, and all documents
necessary to the consummation thereof, shall be satisfactory in form and
substance to such Purchaser and such Purchaser's special counsel, and
such Purchaser shall have received a copy (executed or certified as may
be appropriate) of all legal documents or proceedings taken in
connection with the consummation of said transactions.
Section 4.2. Waiver of Conditions. If on the Closing Date the Company
fails to tender to any Purchaser the Notes to be issued to any Purchaser on
such date or if the conditions specified in Section 4.1 have not been
fulfilled, such Purchaser may thereupon elect to be relieved of all further
obligations under this Agreement. Without limiting the foregoing, if the
conditions specified in Section 4.1 have not been fulfilled, such Purchaser
may waive compliance by the Company with any such condition to such extent as
such Purchaser may in its sole discretion determine. Nothing in this Section
4.2 shall operate to relieve the Company of any of its obligations hereunder
or to waive any Purchaser's rights against the Company.
Section 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section 5.1. Corporate Existence, Etc. The Company will preserve and
keep in full force and effect, and will cause each Restricted Subsidiary to
preserve and keep in full force and effect, its corporate existence and all
licenses and permits necessary to the proper conduct of its business;
provided, however, that the foregoing shall not prevent any transaction
permitted by Section 5.10.
Section 5.2. Insurance. The Company will maintain, and will cause
each Restricted Subsidiary to maintain, insurance coverage by financially
sound and reputable insurers in such forms and amounts and against such risks
as are customary for corporations of established reputation engaged in the
same or a similar business and owning and operating similar properties.
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with
Laws. The Company will promptly pay and discharge, and will cause each
Restricted Subsidiary promptly to pay and discharge, all lawful taxes,
assessments and governmental charges or levies imposed upon the Company or
such Restricted Subsidiary, respectively, or upon or in respect of all or any
part of the property or business of the Company or such Restricted
Subsidiary, all trade accounts payable in accordance with usual and customary
business terms, and all claims for work, labor or materials, which if unpaid
might become a Lien upon any property of the Company or such Restricted
Subsidiary; provided, however, that the Company or such Restricted Subsidiary
shall not be required to pay any such tax, assessment, charge, levy, account
payable or claim if (i) the validity, applicability or amount thereof is
being contested in good faith by appropriate actions or proceedings which
will prevent the forfeiture or sale of any property of the Company or such
Restricted Subsidiary or any material interference with the use thereof by
the Company or such Restricted Subsidiary, and (ii) the Company or such
Restricted Subsidiary shall set aside on its books, reserves deemed by it to
be adequate with respect thereto. The Company will promptly comply and will
cause each Subsidiary to comply with all laws, ordinances or governmental
rules and regulations to which it is subject including, without limitation,
the Occupational Safety and Health Act of 1970, as amended, ERISA and all
laws, ordinances, governmental rules and regulations relating to
environmental protection in all applicable jurisdictions, the violation of
which could have a material adverse effect on the financial position or
results of future operations of the Company and its Restricted Subsidiaries,
taken as a whole, or would result in any Lien not permitted under Section
5.8.
Section 5.4. Maintenance, Etc. The Company will maintain, preserve
and keep, and will cause each Restricted Subsidiary to maintain, preserve and
keep, its properties which are used or useful in the conduct of its business
(whether owned in fee or a leasehold interest) in good repair and working
order and from time to time will make all necessary repairs, replacements,
renewals and additions so that at all times the efficiency thereof shall be
maintained.
Section 5.5. Nature of Business. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a result, the
general nature of the business, taken on a consolidated basis, which would
then be engaged in by the Company and its Restricted Subsidiaries would be
substantially changed from the general nature of the business engaged in by
the Company and its Restricted Subsidiaries on the date of this Agreement.
Section 5.6. Adjusted Consolidated Net Worth. The Company will at all
times keep and maintain Adjusted Consolidated Net Worth at an amount not less
than $105,000,000.
Section 5.7. Limitations on Current Debt and Funded Debt. (a) The
Company will not, and will not permit any Restricted Subsidiary to, create,
assume or incur or in any manner be or become liable in respect of any
Current Debt or Funded Debt, except:
(1) Funded Debt evidenced by the Notes;
(2) Funded Debt of the Company and its Restricted Subsidiaries
outstanding as of the date of this Agreement and reflected on Annex B to
Exhibit B hereto;
(3) unsecured Funded Debt of the Company and its Restricted
Subsidiaries and Funded Debt of the Company and its Restricted
Subsidiaries secured by Liens permitted by Sections 5.8(g) and (h),
provided that at the time of issuance thereof and after giving effect
thereto and to the application of the proceeds thereof:
(i) Consolidated Funded Debt shall not exceed 55% of Total
Capitalization, and
(ii) in the case of the issuance of any Funded Debt of the Company
or a Restricted Subsidiary secured by Liens described in Section 5.8(h),
the aggregate amount of all such secured Funded Debt shall not exceed
10% of Consolidated Net Worth;
(4) unsecured Current Debt of the Company and its Restricted
Subsidiaries, provided that no such Current Debt will be outstanding on
any date unless during the period of 12 consecutive months immediately
preceding such date, there shall have been a period of 28 consecutive
days on each day of which either (i) no such Current Debt was
outstanding (excluding Current Debt described in Section 5.7(a)(5)), or
(ii) the average aggregate principal amount of such Current Debt of the
Company and its Restricted Subsidiaries (excluding Current Debt
described in Section 5.7(a)(5)) outstanding during such 28 consecutive
day period did not exceed the amount of additional unsecured Funded Debt
which could have been incurred by the Company and its Restricted
Subsidiaries pursuant to Section 5.7(a)(3) on each such day of such
period, provided further that if at any time the Company elects to rely
on the provisions of clause (ii) above in order to comply with the
requirements of this Section 5.7(a)(4), then the principal amount of
such Current Debt outstanding during such 28-day period shall be deemed
to be Funded Debt for all purposes of this Agreement so long as and to
the extent that such Current Debt (including any renewals, extensions or
replacements thereof which constitute Current Debt) remains outstanding;
and
(5) Current Debt or Funded Debt of a Restricted Subsidiary to the
Company or to a Wholly-owned Restricted Subsidiary.
(b) Any corporation which becomes a Restricted Subsidiary after the
date hereof shall for all purposes of this Section 5.7 be deemed to have
created, assumed or incurred at the time it becomes a Restricted Subsidiary
all Funded Debt of such corporation existing immediately after it becomes a
Restricted Subsidiary.
Section 5.8. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create or incur, or suffer to be
incurred or to exist, any Lien on its or their property or assets, whether
now owned or hereafter acquired, or upon any income or profits therefrom, or
transfer any property for the purpose of subjecting the same to the payment
of obligations in priority to the payment of its or their general creditors,
or acquire or agree to acquire, or permit any Restricted Subsidiary to
acquire, any property or assets upon conditional sales agreements or other
title retention devices, except:
(a) Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics and
materialmen, provided payment thereof is not at the time required by
Section 5.3;
(b) Liens of or resulting from any judgment or award, the time for
the appeal or petition for rehearing of which shall not have expired, or
in respect of which the Company or a Restricted Subsidiary shall at any
time in good faith be prosecuting an appeal or proceeding for a review
and in respect of which (i) a stay of execution pending such appeal or
proceeding for review shall have been secured, and (ii) the Company or
such Restricted Subsidiary shall set aside on its books, reserves deemed
by it to be adequate with respect thereto;
(c) Liens incidental to the conduct of business or the ownership
of properties and assets (including Liens in connection with worker's
compensation, unemployment insurance and other like laws, warehousemen's
and attorneys' liens and statutory landlords' liens) and Liens to secure
the performance of bids, tenders or trade contracts, or to secure
statutory obligations, surety or appeal bonds or other Liens of like
general nature incurred in the ordinary course of business and not in
connection with the borrowing of money; provided in each case, the
obligation secured is not overdue or, if overdue, is being contested in
good faith by appropriate actions or proceedings;
(d) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of the
Company and its Restricted Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and similarly
situated and which do not in any event materially impair their use in
the operation of the business of the Company and its Restricted
Subsidiaries;
(e) Liens securing Indebtedness of a Restricted Subsidiary to the
Company or to another Restricted Subsidiary;
(f) Liens existing as of the Closing Date and reflected in
Schedule II hereto;
(g) Liens incurred after the Closing Date given to secure the
payment of the purchase price incurred in connection with the
acquisition of fixed assets useful and intended to be used in carrying
on the business of the Company or a Restricted Subsidiary, including
Liens existing on such fixed assets at the time of acquisition thereof
or at the time of acquisition by the Company or a Restricted Subsidiary
of any business entity then owning such fixed assets, whether or not
such existing Liens were given to secure the payment of the purchase
price of the fixed assets to which they attach so long as they were not
incurred, extended or renewed in contemplation of such acquisition,
provided that (i) the Lien shall attach solely to the fixed assets
acquired or purchased, (ii) at the time of acquisition of such fixed
assets, the aggregate amount remaining unpaid on all Indebtedness
secured by Liens on such fixed assets whether or not assumed by the
Company or a Restricted Subsidiary shall not exceed the total purchase
price of such fixed assets, and (iii) all such Indebtedness shall have
been incurred within the applicable limitations provided in Section
5.7(a)(3); and
(h) in addition to the Liens permitted by the preceding paragraphs
(a) through (g) of this Section 5.8, Liens securing Funded Debt of the
Company or any Restricted Subsidiary; provided that such Funded Debt
shall be permitted by the applicable limitations of Section 5.7(a)(3).
Section 5.9. Limitation on Sale and Leasebacks. The Company will not,
and will not permit any Restricted Subsidiary to, enter into any arrangement
whereby the Company or any Restricted Subsidiary shall sell or transfer any
property owned by the Company or any Restricted Subsidiary to any Person
(other than the Company or a Restricted Subsidiary) and thereupon the Company
or any Restricted Subsidiary shall lease or intend to lease, as lessee, the
same property (a "sale and leaseback transaction"); provided, however, that
the Company or a Restricted Subsidiary may enter into a sale and leaseback
transaction with respect to property newly acquired or constructed after the
Closing Date so long as (i) such lease is a Capitalized Lease incurred within
the limitations of Section 5.7(a)(3), and (ii) such lease is entered into
within 90 days following the acquisition or construction of such property.
Section 5.10. Mergers, Consolidations and Sales of Assets. (a) The
Company will not, and will not permit any Restricted Subsidiary to, (i)
consolidate with or be a party to a merger with any other corporation or (ii)
sell, lease or otherwise dispose of all or any substantial part (as defined
in paragraph (d) of this Section 5.10) of the assets of the Company and its
Restricted Subsidiaries; provided, however, that:
(1) any Restricted Subsidiary may merge or consolidate with or
into the Company or any Wholly-owned Restricted Subsidiary so long as in
any merger or consolidation involving the Company, the Company shall be
the surviving or continuing corporation;
(2) the Company may consolidate or merge with any other
corporation if (i) either (x) the Company shall be the surviving or
continuing corporation, or, (y) if the surviving or continuing entity is
other than the Company, such entity is organized under the laws of the
United States, Canada or any jurisdiction thereof and such entity
expressly assumes, by written agreement satisfactory in scope and form
to the Holders of 51% in aggregate principal amount of the outstanding
Notes, all obligations of the Company under the Notes and this
Agreement, (ii) at the time of such consolidation or merger and after
giving effect thereto no Default or Event of Default shall have occurred
and be continuing, and (iii) after giving effect to such consolidation
or merger the Company or surviving entity would be permitted to incur at
least $1.00 of additional Funded Debt under the provisions of Section
5.7(a)(3); and
(3) any Restricted Subsidiary may sell, lease or otherwise dispose
of all or any substantial part of its assets to the Company or any
Wholly-owned Restricted Subsidiary.
(b) The Company will not permit any Restricted Subsidiary to issue or
sell any shares of stock of any class (including as "stock" for the purposes
of this Section 5.10, any warrants, rights or options to purchase or
otherwise acquire stock or other Securities exchangeable for or convertible
into stock) of such Restricted Subsidiary to any Person other than the
Company or a Wholly-owned Restricted Subsidiary, except for the purpose of
qualifying directors, or except in satisfaction of the validly pre-existing
preemptive rights of minority shareholders in connection with the
simultaneous issuance of stock to the Company and/or a Restricted Subsidiary
whereby the Company and/or such Restricted Subsidiary maintain their same
proportionate interest in such Restricted Subsidiary.
(c) The Company will not sell, transfer or otherwise dispose of any
shares of stock of any Restricted Subsidiary (except to qualify directors) or
any Indebtedness of any Restricted Subsidiary, and will not permit any
Restricted Subsidiary to sell, transfer or otherwise dispose of (except to
the Company or a Wholly-owned Restricted Subsidiary) any shares of stock or
any Indebtedness of any other Restricted Subsidiary, unless:
(1) simultaneously with such sale, transfer, or disposition, all
shares of stock and all Indebtedness of such Restricted Subsidiary at
the time owned by the Company and by every other Restricted Subsidiary
shall be sold, transferred or disposed of as an entirety;
(2) the Board of Directors of the Company shall have determined,
as evidenced by a resolution thereof, that the proposed sale, transfer
or disposition of said shares of stock and Indebtedness is in the best
interests of the Company;
(3) said shares of stock and Indebtedness are sold, transferred or
otherwise disposed of to a Person, for a cash consideration and on terms
reasonably deemed by the Board of Directors to be adequate and
satisfactory;
(4) the Restricted Subsidiary being disposed of shall not have any
continuing investment in the Company or any other Restricted Subsidiary
not being simultaneously disposed of; and
(5) such sale or other disposition does not involve a substantial
part (as hereinafter defined) of the assets of the Company and its
Restricted Subsidiaries.
(d) As used in this Section 5.10, a sale, lease or other disposition of
assets shall be deemed to be a "substantial part" of the assets of the
Company and its Restricted Subsidiaries if the book value of such assets,
when added to the book value of all other assets sold, leased or otherwise
disposed of by the Company and its Restricted Subsidiaries (other than in the
ordinary course of business) during the 12-month period ending with the date
of such sale, lease or other disposition, exceeds 15% of the book value of
the consolidated assets of the Company and its Restricted Subsidiaries,
determined in accordance with GAAP as of the end of the immediately preceding
fiscal year.
Notwithstanding the foregoing provisions of this Section 5.10, (A) the
Company or any Restricted Subsidiary may sell assets constituting a
substantial part of its assets if (i) such disposition shall be for an amount
not less than the fair market value of such assets as determined in good
faith by the board of directors of the Company, (ii) after giving effect to
such disposition, no Default or Event of Default shall have occurred and be
continuing, and (iii) within 180 days of such disposition an amount equal to
the net proceeds received from such sale shall be used to (x) acquire
operating assets used or useful in carrying on the business of the Company,
or (y) retire Funded Debt of the Company ratably in accordance with the
unpaid principal amounts thereof, and (B) the Company or any Restricted
Subsidiary may sell assets in a sale and leaseback transaction permitted by
Section 5.9. For purposes of the immediately preceding sentence, (i) in the
case of an offer by the Company to prepay the Notes (or any portion thereof),
such offer may be declined by any Holder of Notes, provided that if any
Holder so declines an offer to have its Notes prepaid, the Company shall not
be restricted by this Section 5.10 in the manner in which such net proceeds
are used, and (ii) any prepayment of the Notes shall be made at par, together
with accrued interest thereon to the date of such prepayment and a premium,
if any, equal to the Make-Whole Amount, and otherwise in compliance with
Section 2.3.
Section 5.11. Repurchase of Notes. Neither the Company nor any
Restricted Subsidiary or Affiliate, directly or indirectly, may repurchase or
make any offer to repurchase any Notes unless an offer has been made to
repurchase Notes, pro rata, from all Holders at the same time and upon the
same terms. In case the Company repurchases or otherwise acquires any Notes,
such Notes shall immediately thereafter be canceled and no Notes shall be
issued in substitution therefor. Without limiting the foregoing, upon the
repurchase or other acquisition of any Notes by the Company, any Restricted
Subsidiary or any Affiliate (or upon the agreement of Company, any Restricted
Subsidiary or any Affiliate to purchase or otherwise acquire any Notes), such
Notes shall no longer be outstanding for purposes of any section of this
Agreement relating to the taking by the Holders of any actions with respect
hereto, including, without limitation, Section 6.3, Section 6.4 and Section
7.1.
Section 5.12. Transactions with Affiliates. The Company will not, and
will not permit any Restricted Subsidiary to, enter into or be a party to any
transaction or arrangement with any Affiliate (including, without limitation,
the purchase from, sale to or exchange of property with, or the rendering of
any service by or for, any Affiliate), except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or such Restricted
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Restricted Subsidiary than would obtain in a comparable
arm's-length transaction with a Person other than an Affiliate.
Section 5.13. Termination of Pension Plans. The Company will not and
will not permit any Subsidiary to withdraw from any Multiemployer Plan or
permit any employee benefit plan maintained by it to be terminated if such
withdrawal or termination could result in withdrawal liability (as described
in Part 1 of Subtitle E of Title IV of ERISA) or the imposition of a Lien on
any property of the Company or any Subsidiary pursuant to Section 4068 of
ERISA.
Section 5.14. Reports and Rights of Inspection. The Company will keep,
and will cause each Restricted Subsidiary to keep, proper books of record and
account in which full 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 GAAP consistently applied
(except for changes disclosed in the financial statements furnished to the
Holders pursuant to this Section 5.14 and concurred in by the independent
public accountants referred to in Section 5.14(b) hereof), and will furnish
to each Institutional Holder (in duplicate if so specified below or otherwise
requested):
(a) Quarterly Statements. As soon as available and in any event
within 90 days after the end of each quarterly fiscal period (except the
last) of each fiscal year, copies of:
(1) consolidated and consolidating balance sheets of the Company
and its Restricted Subsidiaries as of the close of such quarterly fiscal
period, setting forth in comparative form the consolidated figures for
the fiscal year then most recently ended,
(2) consolidated and consolidating statements of income of the
Company and its Restricted Subsidiaries for such quarterly fiscal period
and for the portion of the fiscal year ending with such quarterly fiscal
period, in each case setting forth in comparative form the consolidated
figures for the corresponding periods of the preceding fiscal year, and
(3) consolidated and consolidating statements of cash flows of the
Company and its Restricted Subsidiaries for the portion of the fiscal
year ending with such quarterly fiscal period, setting forth in
comparative form the consolidated figures for the corresponding period
of the preceding fiscal year,
all in reasonable detail and certified as complete and correct by an
authorized financial officer of the Company; provided that delivery
within the period specified above of copies of the Quarterly Report of
the Company on Form 10-Q filed with the Commission shall be deemed to
satisfy the requirements of this Section 5.14(a);
(b) Annual Statements. As soon as available and in any event
within 120 days after the close of each fiscal year of the Company,
copies of:
(1) consolidated and consolidating balance sheets of the Company
and its Restricted Subsidiaries as of the close of such fiscal year, and
(2) consolidated and consolidating statements of income and
retained earnings and cash flows of the Company and its Restricted
Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated figures
for the preceding fiscal year, all in reasonable detail and accompanied
by a report thereon of a firm of independent public accountants of
recognized national standing selected by the Company to the effect that
the consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Company and its
Restricted Subsidiaries as of the end of the fiscal year being reported
on and the consolidated results of the operations and cash flows for
said year in conformity with GAAP and that the examination of such
accountants in connection with such financial statements has been
conducted in accordance with generally accepted auditing standards and
included such tests of the accounting records and such other auditing
procedures as said accountants deemed necessary in the circumstances;
provided that delivery within the period specified above of copies of
the Annual Report of the Company on Form 10-K for such fiscal year filed
with the Commission shall be deemed to satisfy the requirements of this
Section 5.14(b);
(c) Audit Reports. Promptly upon receipt thereof, one copy of
each interim or special audit made by independent accountants of the
books of the Company or any Restricted Subsidiary and any management
letter received from such accountants;
(d) SEC and Other Reports. Promptly upon their becoming available
and in any event not later than 15 days of being filed with the
Commission, one copy of each financial statement, report, notice or
proxy statement sent by the Company to stockholders generally and of
each regular or periodic report, and any registration statement or
prospectus filed by the Company or any Subsidiary with any securities
exchange or the Commission, and copies of any orders in any 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;
(e) ERISA Reports. Promptly upon the occurrence thereof, written
notice of (i) a Reportable Event with respect to any Plan; (ii) the
institution of any steps by the Company, any ERISA Affiliate, the PBGC
or any other person to terminate any Plan; (iii) the institution of any
steps by the Company or any ERISA Affiliate to withdraw from any Plan;
(iv) a non-exempt "prohibited transaction" within the meaning of Section
406 of ERISA 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, or the threatening of the taking of any action
by, the Internal Revenue Service, the Department of Labor or the PBGC
with respect to any of the foregoing;
(f) Officer's Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of an authorized financial
officer of the Company stating that such officer has reviewed the
provisions of this Agreement and setting forth: (i) the information and
computations (in sufficient detail) required in order to establish
whether the Company was in compliance with the requirements of Section
5.6 through Section 5.10 at the end of the period covered by the
financial statements then being furnished, and (ii) whether there
existed as of the date of such financial statements and whether, to the
best of such officer's knowledge, there exists on the date of the
certificate or existed at any time during the period covered by such
financial statements any Default or Event of Default and, if any such
condition or event exists on the date of the certificate, specifying the
nature and period of existence thereof and the action the Company is
taking and proposes to take with respect thereto;
(g) Accountant's Certificates. Within the period provided in
paragraph (b) above, a certificate of the accountants who render an
opinion with respect to such financial statements, stating that they
have reviewed this Agreement and stating further whether, in making
their audit, such accountants have become aware of any Default or Event
of Default under any of the terms or provisions of this Agreement
insofar as any such terms or provisions pertain to or involve accounting
matters or determinations, and if any such condition or event then
exists, specifying the nature and period of existence thereof;
(h) Unrestricted Subsidiaries. Within the respective periods
provided in paragraphs (a) and (b) above, financial statements of the
character and for the dates and periods as in said paragraphs (a) and
(b) provided covering each Unrestricted Subsidiary (or groups of
Unrestricted Subsidiaries on a consolidated basis); and
(i) Requested Information. With reasonable promptness, such other
data and information as such Institutional Holder may reasonably
request.
Without limiting the foregoing, the Company will permit each Institutional
Holder (or such Persons as such Institutional Holder may designate), to visit
and inspect, under the Company's guidance, any of the properties of the
Company or any Restricted Subsidiary, to examine all of their books of
account, records, reports and other papers, to make copies and extracts
therefrom and to discuss their respective affairs, finances and accounts with
their respective officers, employees, and, in the presence of an officer of
the Company, the Company's independent public accountants (and by this
provision the Company agrees to make an officer available to discuss with any
Institutional Holder the finances and affairs of the Company and its
Restricted Subsidiaries with said accountants) all at such reasonable times
and as often as may be reasonably requested. The Company shall not be
required to pay or reimburse any Holder for expenses which such Holder may
incur in connection with any such visitation or inspection, except that if
such visitation or inspection is made during any period when a Default or an
Event of Default shall have occurred and be continuing, the Company agrees to
reimburse such Holder for all such expenses promptly upon demand.
Each Holder exercising such visitation and inspection rights pursuant to
the immediately preceding paragraph hereby agrees that it will not disclose
without the prior written consent of the Company (other than to its
directors, officers, employees, auditors, agents, professional consultants,
advisors, counsel or affiliates or to another Holder of the Notes who shall
be bound by the provisions of this Section 5.14) any information with respect
to the Company or any Restricted Subsidiary which is furnished pursuant to
such visitation and inspection, provided that such Holder may disclose any
such information (i) as has become generally available to the public or is
readily ascertainable from public sources or which becomes available from
another person, (ii) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state, provincial or
federal regulatory body or self regulatory body having or claiming to have
jurisdiction over such Holder or to the United States National Association of
Insurance Commissioners or similar organizations or their successors, (iii)
as may be required or appropriate in response to any summons or subpoena or
in connection with any litigation, proceeding, case or matter pending (or on
its face purported to be pending) before any court, tribunal or governmental
agency, commission, authority, board or similar entity, (iv) in order to
comply with any law, order, regulation or ruling applicable to such Holder,
(v) to any entity utilizing such information to rate such Holder's claims
paying ability or to classify the Notes purchased by such Holder, (vi) if a
Default or Event of Default has occurred and be continuing, to the extent
that such Holder believes it necessary or appropriate in order to protect its
investment in the Notes or the enforcement of its rights and remedies under
its Notes or this Agreement, or (vii) to a prospective transferee in
connection with any contemplated transfer of any of the Notes by such Holder,
which prospective transferee shall be deemed to be bound by this Section
5.14. Any transferee of any Note by its acceptance of the transfer of such
Note shall be deemed to have agreed to the foregoing provisions of this
Section 5.14.
Section 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue for
more than five business days; or
(b) Default shall occur in the making of any required prepayment
on any of the Notes as provided in Section 2.1; or
(c) Default shall occur in the making of any other payment of the
principal of any Note or premium, if any, thereon at the expressed or
any accelerated maturity date or at any date fixed for prepayment; or
(d) Default shall be made in the payment when due (whether by
lapse of time, by declaration, by call for redemption or otherwise) of
the principal of or interest on any Funded Debt or Current Debt (other
than the Notes) of the Company or any Restricted Subsidiary having an
unpaid principal amount exceeding $10,000,000 which results in the
acceleration of the maturity of any Funded Debt or Current Debt of the
Company or any Restricted Subsidiary outstanding thereunder; or
(e) Default or the happening of any other event shall occur under
any indenture, agreement or other instrument under which any Funded Debt
or Current Debt of the Company or any Restricted Subsidiary may be
issued having an unpaid principal amount exceeding $10,000,000 which
results in the acceleration of the maturity of any Funded Debt or
Current Debt of the Company or any Restricted Subsidiary outstanding
thereunder; or
(f) Default shall occur in the observance or performance of any
covenant or agreement contained in Section 5.6 through Section 5.13; or
(g) Default shall occur in the observance or performance of any
other provision of this Agreement which is not remedied within 30 days
after the earlier of (i) the day on which the Company first obtains
knowledge of such default, or (ii) the day on which written notice
thereof is given to the Company by any Holder; or
(h) Any representation or warranty made by the Company herein, or
made by the Company in any statement or certificate furnished by the
Company in connection with the consummation of the issuance and delivery
of the Notes or furnished by the Company pursuant hereto, is untrue in
any material respect as of the date of the issuance or making thereof;
or
(i) Final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 is or are outstanding against the
Company or any Restricted Subsidiary or against any property or assets
of either and any one of such judgments has remained unpaid, unvacated,
unbonded or unstayed by appeal or otherwise for a period of 30 days from
the date of its entry; or
(j) A custodian, liquidator, trustee or receiver is appointed for
the Company or any Significant Subsidiary or for the major part of the
property of either and is not discharged within 60 days after such
appointment; or
(k) The Company or any Significant Subsidiary becomes insolvent or
bankrupt, is generally not paying its debts as they become due or makes
an assignment for the benefit of creditors, or the Company or any
Significant Subsidiary applies for or consents to the appointment of a
custodian, liquidator, trustee or receiver for the Company or such
Significant Subsidiary or for the major part of the property of either;
or
(l) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company or any Significant Subsidiary and, if instituted
against the Company or any Significant Subsidiary, are consented to or
are not dismissed within 60 days after such institution.
Section 6.2. Notice to Holders. When any Event of Default described
in the foregoing Section 6.1 has occurred, or if any Holder or the holder of
any other evidence of Funded Debt or Current Debt of the Company gives any
notice or takes any other action with respect to a claimed default, the
Company agrees to give notice within three business days of an officer of the
Company becoming aware of such event to all Holders.
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of Section 6.1 has happened and is
continuing, any Holder may, and when any Event of Default described in
paragraphs (d) through (i), inclusive, of said Section 6.1 has happened and
is continuing, any Holder or Holders holding 33% or more of the principal
amount of Notes at the time outstanding may, by notice to the Company,
declare the entire principal and all interest accrued on all Notes to be, and
all Notes shall thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived. When any Event of Default described in paragraph
(j), (k) or (l) of Section 6.1 has occurred, then all outstanding Notes shall
immediately become due and payable without presentment, demand or notice of
any kind. Upon the Notes becoming due and payable as a result of any Event
of Default as aforesaid, the Company will forthwith pay to the Holders, the
entire principal and interest accrued on the Notes and, to the extent not
prohibited by applicable law, an amount as liquidated damages for the loss of
the bargain evidenced hereby (and not as a penalty) equal to the Make-Whole
Amount, determined as of the date on which the Notes shall so become due and
payable. No course of dealing on the part of the Holder or Holders nor any
delay or failure on the part of any Holder to exercise any right shall
operate as a waiver of such right or otherwise prejudice such Holder's
rights, powers and remedies. The Company further agrees, to the extent
permitted by law, to pay to the Holder or Holders all costs and expenses
incurred by them in the collection of any Notes upon any default hereunder or
thereon, including reasonable compensation to such Holder's or Holders'
attorneys for all services rendered in connection therewith.
Section 6.4. Rescission of Acceleration. The provisions of Section
6.3 are subject to the condition that if the principal of and accrued
interest on all or any outstanding Notes have been declared immediately due
and payable by reason of the occurrence of any Event of Default described in
paragraphs (d) through (l), inclusive, of Section 6.1, the Holders holding
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 at the time such declaration is
annulled and rescinded:
(a) no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Agreement (except any principal,
interest or premium on the Notes which has become due and payable solely
by reason of such declaration under Section 6.3) shall have been duly
paid; and
(c) each and every other Default and Event of Default shall have
been made good, cured or waived pursuant to Section 7.1;
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.
Section 7. AMENDMENTS, WAIVERS AND CONSENTS.
Section 7.1. Consent Required. 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 Holders holding at least 51% in
aggregate principal amount of outstanding Notes; provided, however, that
without the written consent of all of the Holders, no such amendment or
waiver shall be effective (i) which will change the time of payment
(including any prepayment required by Section 2.1) of the principal of or the
interest on any Note or change the principal amount thereof or change the
rate of interest thereon, or (ii) which will change any of the provisions
with respect to optional prepayments, or (iii) which will change the
percentage of Holders required to consent to any such amendment or waiver of
any of the provisions of this Section 7 or Section 6.
Section 7.2. Solicitation of Holders. So long as there are any Notes
outstanding, the Company will not 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 (irrespective of the amount of
Notes then owned by it) shall 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. The Company will not, directly or indirectly, pay or
cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, to any Holder as consideration for or
as an inducement to entering into by any Holder of any waiver or amendment of
any of the terms and provisions of this Agreement or the Notes unless such
remuneration is concurrently offered, on the same terms, ratably to all
Holders.
Section 7.3. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the Holders and shall be binding upon
them, upon each future Holder and upon the Company, whether or not any 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 consequent thereon.
Section 8.1. Definitions. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to both
the singular and plural forms of any of the terms herein defined:
"Adjusted Consolidated Net Worth" shall mean, as of the date of any
determination thereof, Consolidated Net Worth but excluding the cumulative
foreign currency translation adjustment reported separately in Stockholders'
Equity as of such date of determination, all in accordance with GAAP.
"Affiliate" shall mean any Person (other than a Restricted Subsidiary)
(i) which directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, the Company, (ii) which
beneficially owns or holds 5% or more of any class of the Voting Stock of the
Company or (iii) 5% or more of the Voting Stock (or in the case of a Person
which is not a corporation, 5% or more of the equity interest) of which is
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 Stock, by contract or otherwise.
"Agreement" shall mean this Note Agreement.
"Capitalized Lease" shall mean any lease the obligation for Rentals with
respect to which is required to be capitalized on a consolidated balance
sheet of the lessee and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet of such
Person.
"Closing Date" shall have the meaning set forth in Section 1.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the Securities and Exchange Commission or any
successor Federal agency.
"Company" shall mean The Cherry Corporation, a Delaware corporation, and
any Person who succeeds to all, or substantially all, of the assets and
business of The Cherry Corporation.
"Consolidated Funded Debt" shall mean all Funded Debt of the Company and
its Restricted Subsidiaries, determined on a consolidated basis eliminating
intercompany items.
"Consolidated Net Worth" shall mean, as of the date of any determination
thereof, Stockholders' Equity less the total amount of all Restricted
Investments in excess of 10% of Stockholders' Equity as of such date of
determination.
"Current Debt" of any Person shall mean as of the date of any
determination thereof (without duplication) (i) all Indebtedness of such
Person for borrowed money other than Funded Debt of such Person and (ii)
Guaranties by such Person of Current Debt of others.
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that is,
along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in Sections 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in Section 6.1.
"Funded Debt" of any Person shall mean (without duplication) (i) all
Indebtedness of such Person for borrowed money or which has been incurred in
connection with the acquisition of assets in each case having a final
maturity of one or more than one year 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 all payments
in respect thereof that are required to be made within one year from the date
of any determination of Funded Debt, whether or not the obligation to make
such payments shall constitute a current liability of the obligor under GAAP,
(ii) all Capitalized Rentals of such Person, and (iii) all Guaranties by such
Person of Funded Debt of others.
"GAAP" shall mean generally accepted accounting principles at the time
in the United States.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect
guaranteeing, any Indebtedness, dividend or other obligation of any other
Person (the "primary obligor") 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 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 of
the ability of the primary obligor to make payment of the Indebtedness or
obligation, or (iv) otherwise to assure the owner of the Indebtedness or
obligation of the primary obligor against loss in respect thereof. For the
purposes of all computations made under this Agreement, a Guaranty 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 a Guaranty 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.
"Holder" shall mean any Person which is, at the time of reference, the
registered Holder of any Note.
"Indebtedness" of any Person shall mean and include all obligations of
such Person which in accordance with GAAP shall be classified upon a balance
sheet of such Person as liabilities of such Person, and in any event shall
include all (i) obligations of such Person for borrowed money or which has
been incurred in connection with the acquisition of property or assets, (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 by
such Person, 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 Rentals and (v)
Guaranties of obligations of others of the character referred to in this
definition.
"Institutional Holder" shall mean any Holder which is a Purchaser or an
insurance company, bank, savings and loan association, trust company,
investment company, charitable foundation, employee benefit plan (as defined
in ERISA) or other institutional investor or financial institution and, for
purposes of the direct payment provisions of this Agreement, shall include
any nominee of any such Holder.
"Investments" shall mean all investments, in cash or by delivery of
property made, 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 routine investments in property
to be used or consumed in the ordinary course of business.
"Lien" shall mean any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether
such interest is based on the common law, statute or contract, and including
but not limited to the security interest lien arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
(including, with respect to stock, stockholder agreements, voting trust
agreements, buy-back agreements and all similar arrangements) affecting
property. For the purposes of this Agreement, the Company or a Restricted
Subsidiary shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, Capitalized Lease
or other arrangement pursuant to which title to the property has been
retained by or vested in some other Person for security purposes and such
retention or vesting shall constitute a Lien.
"Long-Term Lease" shall mean any lease of real or personal property
(other than a Capitalized Lease) having an original term, including any
period for which the lease may be renewed or extended at the option of the
lessor, of more than three years.
"Make-Whole Amount" shall mean in connection with any prepayment or
acceleration of the Notes the excess, if any, of (i) the aggregate present
value as of the date of such prepayment of each dollar of principal being
prepaid (taking into account the application of such prepayment required by
Section 2.1) and the amount of interest (exclusive of interest accrued to the
date of prepayment) that would have been payable in respect of such dollar if
such prepayment had not been made, determined by discounting such amounts at
the Reinvestment Rate from the respective dates on which they would have been
payable, over (ii) 100% of the principal amount of the outstanding Notes
being prepaid. If the Reinvestment Rate is equal to or higher than 6.99%,
the Make-Whole Amount shall be zero. For purposes of any determination of
the Make-Whole Amount:
"Reinvestment Rate" shall mean .50%, plus the arithmetic mean of
the yields for the two columns under the heading "Week Ending" published
in the Statistical Release under the caption "Treasury Constant
Maturities" for the maturity (rounded to the nearest month)
corresponding to the Weighted Average Life to Maturity of the principal
being prepaid (taking into account the application of such prepayment
required by Section 2.1). If no maturity exactly corresponds to such
Weighted Average Life to Maturity, yields for the published maturity
next longer than the Weighted Average Life to Maturity and for the
published maturity next shorter than the Weighted Average Life to
Maturity shall be calculated pursuant to the immediately preceding
sentence and the Reinvestment Rate shall be interpolated from such
yields on a straight-line basis, rounding in each of such relevant
periods to the nearest month. For the purposes of calculating the
Reinvestment Rate, the most recent Statistical Release published prior
to the date of determination of the Make-Whole Amount shall be used.
"Statistical Release" shall mean the then most recently published
statistical release designated "H.15(519)" or any successor publication
which is published weekly by the Federal Reserve System and which
establishes yields on actively traded U.S. Government Securities
adjusted to constant maturities or, if such statistical release is not
published at the time of any determination hereunder, then such other
reasonably comparable index which shall be designated by the Holders
holding 66-2/3% in aggregate principal amount of the outstanding Notes.
"Weighted Average Life to Maturity" of the principal amount of the
Notes being prepaid shall mean, as of the time of any determination
thereof, the number of years obtained by dividing the then Remaining
Dollar-Years of such principal by the aggregate amount of such
principal. The term "Remaining Dollar-Years" of such principal shall
mean the amount obtained by (i) multiplying (x) the remainder of (1) the
amount of principal that would have become due on each scheduled payment
date if such prepayment had not been made, less (2) the amount of
principal on the Notes scheduled to become due on such date after giving
effect to such prepayment and the application thereof in accordance with
the provisions of Section 2.1, by (y) the number of years (calculated to
the nearest one-twelfth) which will elapse between the date of
determination and such scheduled payment date, and (ii) totalling the
products obtained in (i).
"Multiemployer Plan" shall have the same meaning as in ERISA.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof.
"Plan" means a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate or as to
which the Company or any ERISA Affiliate contributed or is a member or
otherwise may have any liability.
"Purchasers" shall have the meaning set forth in Section 1.1.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such 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 shall be
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 and similar charges. Fixed
rents under any so-called "percentage leases" shall be computed solely on the
basis of the minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"Restricted Investments" shall mean all Investments, other than the
following:
(a) Investments by the Company and its Restricted Subsidiaries in
and to Restricted Subsidiaries, including any Investment in a
corporation which, after giving effect to such Investment, will become a
Restricted Subsidiary;
(b) Investments in commercial paper maturing in 270 days or less
from the date of issuance which, at the time of acquisition by the
Company or any Restricted Subsidiary, is accorded a rating no lower than
"A-2" by Standard & Poor's Corporation or "Prime-2" by Moody's Investors
Service, Inc.;
(c) Investments in direct obligations of the United States of
America or any agency or instrumentality of the United States of
America, the payment or guarantee of which constitutes a full faith and
credit obligation of the United States of America, in either case,
maturing in three years or less from the date of acquisition thereof;
(d) Investments in certificates of deposit and bankers acceptances
maturing within one year from the date of acquisition, issued by a
commercial bank organized under the laws of the United States or any
state thereof, having capital, surplus and undivided profits aggregating
at least $250,000,000 and whose long-term certificates of deposit are,
at the time of acquisition thereof by the Company or a Restricted
Subsidiary, rated "Aa" or better by Moody's Investors Services, Inc. or
"AA" or better by Standard and Poor's Corporation;
(e) Investments in municipal securities maturing in three years or
less from the date of acquisition, which, at the time of acquisition by
the Company or any Restricted Subsidiary, are accorded a rating no lower
than "Aa" by Moody's Investors Services, Inc. or "AA" by Standard and
Poor's Corporation or the equivalent short-term rating in the case of
short-term municipal securities;
(f) Investments in money market investment programs which are
classified as current assets of the Company or any Restricted Subsidiary
in accordance with GAAP and which money market investment programs have
total assets in excess of $1,000,000,000 under administration;
(g) loans or advances in the usual and ordinary course of business
to officers and employees for expenses (including moving expenses
related to a transfer) incidental to carrying on the business of the
Company or any Restricted Subsidiary;
(h) receivables arising from the sale of goods and services in the
ordinary course of business of the Company and its Restricted
Subsidiaries; and
(i) other Investments existing at the Closing Date and described
in Schedule III hereto in the amount set forth therein.
In valuing any Investments for the purpose of applying the limitations
set forth in this Agreement, such Investments shall be taken at the original
cost thereof, without allowance for any subsequent write-offs or appreciation
or depreciation therein, but less any amount repaid or recovered on account
of capital or principal.
"Restricted Subsidiary" shall mean any Subsidiary (i) of which more than
80% (by number of votes) of the Voting Stock is beneficially owned, directly
or indirectly, by the Company; and (ii) which is designated as a Restricted
Subsidiary in Annex A to Exhibit B attached hereto or, which is designated
after the date hereof as a Restricted Subsidiary by written notice delivered
to each Holder at such time.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Significant Subsidiary" shall mean any Restricted Subsidiary which,
individually or together with all other subsidiaries of such Restricted
Subsidiary, contributes more than 5% to either (i) Stockholders' Equity or
(ii) consolidated net income of the Company (determined in accordance with
GAAP).
"Stockholders' Equity" shall mean, as of the date of any determination
thereof, stockholders' equity of the Company and its Restricted Subsidiaries
as shown on a consolidated balance sheet of the Company as of such date of
determination, determined in accordance with GAAP.
The term "subsidiary" shall mean as to any particular parent corporation
any corporation of which more than 50% (by number of votes) of the Voting
Stock shall be beneficially owned, directly or indirectly, by such parent
corporation. The term "Subsidiary" shall mean a subsidiary of the Company.
"Total Capitalization" shall mean, as of the date of any determination
thereof, the sum of Consolidated Net Worth and Consolidated Funded Debt, as
of such date of determination.
"Unrestricted Subsidiary" shall mean any Subsidiary which is not a
Restricted Subsidiary.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) and all Funded Debt and
Current Debt shall be owned by the Company and/or one or more of its Wholly-
owned Subsidiaries.
Section 8.2. 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 GAAP, to the extent applicable, except where such principles
are inconsistent with the requirements of this Agreement.
Section 8.3. Directly or Indirectly. 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 9. MISCELLANEOUS.
Section 9.1. Registered Notes. The Company shall cause to be kept at
its principal office a register for the registration and transfer of the
Notes (hereinafter called the "Note Register"), and the Company will register
or transfer or cause to be registered or transferred as hereinafter provided
any Note issued pursuant to this Agreement.
At any time and from time to time any Holder of a Note which has been
duly registered as hereinabove provided may transfer such Note upon surrender
thereof at the principal office of the Company duly endorsed or accompanied
by a written instrument of transfer duly executed by the Holder or its
attorney duly authorized in writing.
The Person in whose name any registered Note shall be registered shall
be deemed and treated as the owner and holder thereof and a Holder for all
purposes of this Agreement. Payment of or on account of the principal,
premium, if any, and interest on any registered Note shall be made to or upon
the written order of such Holder.
No Holder of any Note may, without the prior written consent of the
Company, offer to sell, sell, assign, grant participations in, or otherwise
transfer its Notes to any Person other than an Institutional Holder.
Section 9.2. Exchange of Notes. At any time and from time to time, upon
not less than ten days' notice to that effect given by the Holder of any Note
initially delivered or of any Note substituted therefor pursuant to Section
9.1, this Section 9.2 or Section 9.3, and, upon surrender of such Note at its
office, the Company will deliver in exchange therefor, without expense to
such Holder, except as set forth below, a Note for the same aggregate
principal amount as the then unpaid principal amount of the Note so
surrendered, or Notes in the denomination of $100,000 or any amount in excess
thereof as such Holder shall specify, dated as of the date to which interest
has been paid on the Note so surrendered or, if such surrender is prior to
the payment of any interest thereon, then dated as of the date of issue,
registered in the name of such Person or Persons as may be designated by such
Holder, and otherwise of the same form and tenor as the Notes so surrendered
for exchange. The Company may require the payment of a sum sufficient to
cover any stamp tax or governmental charge imposed upon such exchange or
transfer.
Any transferee of a Note, or purchaser of a participation therein,
shall, by its acceptance of such Note be deemed to make the same
representations to the Company regarding the Note or participation as the
Purchaser made pursuant to Section 3.2, provided that such entity may (in
reliance upon information provided by the Company, which shall not be
unreasonably withheld) make a representation to the effect that the purchase
by such entity of any Note will not constitute a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code.
Section 9.3. Loss, Theft, Etc. 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 the Note, the Company will make and
deliver without expense to the Holder thereof, a new Note, of like tenor, in
lieu of such lost, stolen, destroyed or mutilated Note. If an Institutional
Holder is the owner of any such lost, stolen or destroyed Note, then the
affidavit of an authorized officer of such owner, setting forth the fact of
loss, theft or destruction and of its ownership of such 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 the written agreement of such
owner to indemnify the Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to
pay directly all of the Purchasers' out-of-pocket expenses in connection with
the preparation, execution and delivery of this Agreement and the
transactions contemplated hereby, including but not limited to the reasonable
charges and disbursements of Chapman and Cutler, special counsel to the
Purchasers, duplicating and printing costs and charges for shipping the
Notes, adequately insured to each Purchaser's home office or at such other
place as such Purchaser may designate, and all such expenses of the Holders
relating to any amendment, waivers or consents pursuant to the provisions
hereof, including, without limitation, any 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 each Purchaser
harmless against any and all liability with respect to stamp and other 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,
whether or not any Notes are then outstanding. The Company agrees to protect
and indemnify each Purchaser against any liability for any and all brokerage
fees and commissions payable or claimed to be payable to any Person in
connection with the transactions contemplated by this Agreement.
. No delay or failure on the part of any Holder in the exercise of any power or
right shall operate as a waiver thereof; nor shall any single or partial
exercise of the same preclude any other or further exercise thereof, or the
exercise of any other power or right, and the rights and remedies of each
Holder are cumulative to, and are not exclusive of, any rights or remedies
any such Holder would otherwise have.
Section 9.6. Notices. All communications provided for hereunder shall be
in writing and, if to a Holder, delivered or mailed prepaid by registered or
certified mail or overnight air courier, or by facsimile communication, in
each case addressed to such Holder at its address appearing beneath its
signature at the foot of this Agreement or such other address as any Holder
may designate to the Company in writing, and if to the Company, delivered or
mailed by registered or certified mail or overnight air courier, or by
facsimile communication, to the Company at the address beneath its signature
at the foot of this Agreement or to such other address as the Company may in
writing designate to the Holders; provided, however, that a notice to a
Holder by overnight air courier shall only be effective if delivered to such
Holder at a street address designated for such purpose in accordance with
this section9.6, and a notice to such Holder by facsimile communication shall
only be effective if made by confirmed transmission to such Holder at a
telephone number designated for such purpose in accordance with this
section9.6 and promptly followed by the delivery of such notice by registered
or certified mail or overnight air courier, as set forth above.
Section 9.7. Successors and Assigns. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to the benefit of
each Purchaser and its successor and assigns, including each successive
Holder.
Section 9.8. Survival of Covenants and Representations. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
Closing Date, shall survive the closing and the delivery of this Agreement
and the Notes.
Section 9.9. Severability. Should any part of this Agreement for any
reason be declared invalid or unenforceable, such decision shall not affect
the validity or enforceability of any remaining portion, which remaining
portion shall remain in force and effect as if this Agreement had been
executed with the invalid or unenforceable portion thereof eliminated and it
is hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including therein
any such part, parts or portion which may, for any reason, be hereafter
declared invalid or unenforceable.
Section 9.10. Governing Law. This Agreement and the Notes issued and sold
hereunder shall be governed by and construed in accordance with Illinois law.
Section 9.11. Captions. The descriptive headings of the various Sections
or parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
The execution hereof by the Purchasers shall constitute a contract among
the Company and the Purchasers for the uses and purposes hereinabove set
forth. This Agreement may be executed in any number of counterparts, each
executed counterpart constituting an original but all together only one
agreement.
THE CHERRY CORPORATION
By . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . Its
THE CHERRY CORPORATION
3600 Sunset Avenue
Waukegan, Illinois 60087
Attention: Vice President-Finance
Telefacsimile: (708) 360-3508
Confirmation: (708) 360-3541
Accepted as of the first date written above:
NATIONWIDE LIFE INSURANCE COMPANY
By . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . Its
NATIONWIDE LIFE INSURANCE COMPANY
One Nationwide Plaza
Columbus, Ohio 43215-2220
Telecopier Number: (614) 249-4698
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as The
Cherry Corporation 6.99% Senior Notes due 2007, PPN 164541 A@ 3, principal or
interest") to:
Morgan Guaranty Trust Company of New York (ABA #021-000-238)
JOURNAL #999-99-024
For the account of Nationwide Life Insurance Company Custody Account
#71615
Attention: Custody Service Department
Notices
All notices of payment on or in respect of the Notes and written confirmation
of each such payment to:
Nationwide Life Insurance Company
One Nationwide Plaza-1-32-09
Columbus, Ohio 43215-2220
Attention: Corporate Money Management
All notices and communications other than those in respect to payments to be
addressed:
Nationwide Life Insurance Company
One Nationwide Plaza-1-33-07
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Telecopier Number: (614) 249-4553
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 31-4156830
Accepted as of the first date written above:
EMPLOYERS LIFE INSURANCE COMPANY OF WAUSAU
By . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . Its
EMPLOYERS LIFE INSURANCE COMPANY OF WAUSAU
2000 Westwood Avenue
Wausau, Wisconsin 54401
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"The Cherry Corporation 6.99% Senior Notes due 2007, PPN 164541 A@ 3,
principal or interest") to:
Morgan Guaranty Trust Company of New York (ABA #021-000-238)
JOURNAL #999-99-024
F/A/O Employers Life Custody
Account Number 50135
Attention: Custody Service Department
Notices
All notices of payment, on or in respect of the Notes, and written
confirmation of each such payment to be addressed as first provided above.
All notices and communications other than those in respect to payments to be
addressed:
Employers Life Insurance Company of Wausau
One Nationwide Plaza-1-33-07
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 39-1049873
PRINCIPAL AMOUNT
NAMES OF PURCHASERS OF
NOTES TO BE
PURCHASED
NATIONWIDE LIFE INSURANCE COMPANY $22,000,000
EMPLOYERS LIFE INSURANCE COMPANY OF WAUSAU $3,000,000
Total $25,000,000
SCHEDULE I
(to Note Agreement)
LIENS SECURING FUNDED DEBT
(INCLUDING CAPITALIZED LEASES)
AS OF THE CLOSING DATE
Amount
The Cherry Corporation:
$62,000
Liens on computer equipment under Capitalized
Leases
up to
$25,000,000
Contingent pledge of 65% of the capital stock of
Cherry Mikroschalter GmbH in favor of the banks
in connection with the Multicurrency Credit
Agreement
Cherry Mikroschalter GmbH:
Liens on real estate securing construction,
mortgage and equipment loans in the Federal
Republic of Germany which are due through $11,962,000
December 31, 2000
Liens on real estate and equipment to secure a 0
revolving credit facility which has not yet been
completed
Capitalized Leases $2,158,000
SCHEDULE II
(to Note Agreement)
INVESTMENTS
AS OF THE CLOSING DATE
Amount
Cherry Australia Pty Ltd. $18,000
Hirose Cherry Precision Company Limited $217,632
TVS Cherry Private Limited $160,580
SCHEDULE III
(to Note Agreement)
THE CHERRY CORPORATION
6.99% Senior Note
Due July 15, 2007
PPN: 164541 A@ 3
No. ____________, 19__
$
The Cherry Corporation, a Delaware corporation (the "Company"), for
value received, hereby promises to pay to
or registered assigns
on the fifteenth day of July, 2007
the principal amount of
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 6.99% per annum from the date hereof until maturity, payable
semiannually on the fifteenth day of each January and July in each year
(commencing on the first of such dates after the date hereof) and at
maturity. The Company agrees to pay interest on overdue principal (including
any overdue required or optional prepayment of principal) and premium, if
any, and (to the extent legally enforceable) on any overdue installment of
interest, at the rate of 8.99% per annum after the due date, whether by
acceleration or otherwise, until paid. Both the principal hereof and
interest hereon are payable at the principal office of the Company in
Waukegan, Illinois in coin or currency of the United States of America which
at the time of payment shall be legal tender for the payment of public and
private debts.
This Note is one of the 6.99% Senior Notes due July 15, 2007 (the
"Notes") of the Company in the aggregate principal amount of $25,000,000
issued or to be issued under and pursuant to the terms and provisions of the
Note Agreement dated as of July 15, 1995 (the "Note Agreement"), entered into
by the Company with the original Purchasers therein referred to, and this
Note and the holder hereof are entitled equally and ratably with the holders
of all other Notes outstanding under the Note Agreement to all the benefits
provided for thereby or referred to therein. Reference is hereby made to the
Note Agreement for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreement may
be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the terms
and in the manner and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreement.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly
endorsed or accompanied by a written instrument of transfer duly executed by
the registered holder of this Note or its attorney duly authorized in
writing. Payment of or on account of principal, premium, if any, and
interest on this Note shall be made only to or upon the order in writing of
the registered holder.
THE CHERRY CORPORATION
By . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . Its
EXHIBIT A
(to Note Agreement)
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to each Purchaser as of the date of
the Note Agreement and the Closing Date as follows:
1. Subsidiaries. Annex A attached hereto states the name of each of
the Company's Subsidiaries, its jurisdiction of incorporation and the
percentage of its Voting Stock owned by the Company and/or its Subsidiaries.
Those Subsidiaries listed in Section 1 of said Annex A constitute Restricted
Subsidiaries. The Company and each Subsidiary has good and marketable title
to all of the shares it purports to own of the stock of each Subsidiary, free
and clear in each case of any Lien. All such shares have been duly issued
and are fully paid and non-assessable.
2. Corporate Organization and Authority. The Company, and each
Restricted Subsidiary,
(a) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) has all requisite legal and corporate power and authority and
all necessary material licenses, certificates and permits to own and
operate its properties and to carry on its business as now conducted and
as presently proposed to be conducted; and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction wherein the nature of the
business transacted by it or the nature of the property owned or leased
by it makes such licensing or qualification necessary, except where the
failure to so qualify could have a material adverse effect on the
financial position or results of future operations of the Company and
its Restricted Subsidiaries, taken as a whole.
3. Financial Statements. (a) The consolidated balance sheets of the
Company and its consolidated Subsidiaries as of the last day of February in
each of the years 1991 to 1995, both inclusive, and the statements of income
and retained earnings and changes in financial position or cash flows for the
fiscal years ended on said dates, each accompanied by a report thereon
containing an opinion unqualified as to scope limitations imposed by the
Company and otherwise without qualification except as therein noted, by
Arthur Andersen LLP (or its predecessors), have been prepared in accordance
with GAAP consistently applied except as therein noted, are correct and
complete and present fairly the financial position of the Company and its
Subsidiaries as of such dates and the results of their operations and changes
in their financial position or cash flows for such periods. The unaudited
consolidated balance sheets of the Company and its consolidated Subsidiaries
as of May 31, 1995, and the unaudited statements of income and retained
earnings and cash flows for the three-month period ended on said date
prepared by the Company have been prepared in accordance with GAAP
consistently applied, are correct and complete and present fairly the
financial position of the Company and its consolidated Subsidiaries as of
said date and the results of their operations and changes in their financial
position or cash flows for such period.
(b) Since February 28, 1995, there has been no change in the condition,
financial or otherwise, of the Company and its consolidated Subsidiaries as
shown on the consolidated balance sheet as of such date except changes in the
ordinary course of business, none of which individually or in the aggregate
has been materially adverse.
4. Indebtedness. Annex B attached hereto correctly describes all
Current Debt, Funded Debt, Capitalized Leases and Long-Term Leases of the
Company and its Restricted Subsidiaries outstanding on May 31, 1995.
5. Full Disclosure. Neither the financial statements referred to in
paragraph 3 hereof nor the Agreement or any other written statement furnished
by the Company to such Purchaser in connection with the negotiation of the
sale of the Notes, contains any untrue statement of a material fact or omits
a material fact necessary to make the statements contained therein or herein
not misleading. There is no fact peculiar to the Company or its Subsidiaries
which the Company has not disclosed to such Purchaser in writing which
materially affects adversely nor, so far as the Company can now foresee, will
materially affect adversely the properties, business, prospects, profits or
condition (financial or otherwise) of the Company and its Restricted
Subsidiaries, taken as a whole.
6. Pending Litigation. There are no proceedings pending or, to the
knowledge of the Company or any member of its management, threatened against
or affecting the Company or any Restricted Subsidiary in any court or before
any governmental authority or arbitration board or tribunal which,
individually or in the aggregate, involve the possibility of materially and
adversely affecting the properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Restricted Subsidiaries,
taken as a whole.
Neither the Company nor any Restricted Subsidiary has received notice in
respect of, nor does it have any knowledge of, any default with respect to
any judgment, order, writ, injunction, or decree of any court, governmental
authority or arbitration board or tribunal that, in the aggregate, could have
a material adverse effect on the financial position or results of future
operations of the Company and its Restricted Subsidiaries, taken as a whole.
7. Title to Properties. The Company and each Restricted Subsidiary
has good and marketable title in fee simple (or its equivalent under
applicable law) to all parcels of real property and has good title to all the
other items of property it purports to own, including that reflected in the
most recent balance sheet referred to in paragraph 3 hereof, except as sold
or otherwise disposed of in the ordinary course of business and except for
Liens permitted by the Agreement.
8. Patents and Trademarks. The Company and each Restricted Subsidiary
owns or possesses all the material patents, trademarks, trade names, service
marks, copyright, licenses and rights with respect to the foregoing necessary
for the present and planned future conduct of its business, without any known
material conflict with the rights of others.
9. Sale is Legal and Authorized. The sale of the Notes and compliance
by the Company with all of the provisions of the Agreement and the Notes -
(a) are within the corporate powers of the Company;
(b) will not violate any provisions of any law or any order of any
court or governmental authority or agency and will not conflict with or
result in any breach of any of the terms, conditions or provisions of,
or constitute a default under the Certificate of Incorporation or By-
laws of the Company or any indenture or other agreement or instrument to
which the Company is a party or by which it may be bound or result in
the imposition of any Liens or encumbrances on any property of the
Company; and
(c) have been duly authorized by proper corporate action on the
part of the Company (no action by the stockholders of the Company being
required by law, by the Certificate of Incorporation or By-laws of the
Company or otherwise), executed and delivered by the Company and the
Agreement and the Notes constitute the legal, valid and binding
obligations, contracts and agreements of the Company enforceable in
accordance with their respective terms.
10. No Defaults. No Default or Event of Default has occurred and is
continuing. Neither the Company nor any Restricted Subsidiary is in default
in the payment of principal or interest on any Funded Debt or Current Debt or
is in default under any instrument or instruments or agreements under and
subject to which any Funded Debt or Current Debt has been issued, and no
event has occurred and is continuing under the provisions of any such
instrument or agreement which with the lapse of time or the giving of notice,
or both, would constitute an event of default thereunder.
11. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of the
Agreement or the Notes or compliance by the Company with any of the
provisions of the Agreement or the Notes.
12. Taxes. All tax returns required to be filed by the Company, any
Restricted Subsidiary and any other Person with which the Company or any
Restricted Subsidiary files or has filed a consolidated tax return in any
jurisdiction have, in fact, been filed on a timely basis (which timely filing
shall include any instance in which the time for such filing has itself been
timely and properly extended) and all taxes, assessments, fees and other
governmental charges upon the Company or any Restricted Subsidiary or upon
any of their respective properties, income or franchises, which are shown to
be due and payable in such returns have been paid, except to the extent being
contested in good faith. For all taxable years ending on or before February
28, 1980, the Federal income tax liability of the Company and its Restricted
Subsidiaries has been satisfied and either the period of limitations on
assessment of additional Federal income tax has expired or the Company and
its Restricted Subsidiaries have entered into an agreement with the Internal
Revenue Service closing conclusively the total tax liability for the taxable
year. The Company does not know of any proposed additional tax assessment
against it, any Restricted Subsidiary or any other Person with which the
Company or any Restricted Subsidiary files or has filed a consolidated tax
return, for which adequate provision has not been made on its accounts, and
no material controversy in respect of additional Federal or state income
taxes due since said date is pending or to the knowledge of the Company
threatened. The provisions for taxes on the books of the Company and each
Restricted Subsidiary are adequate for all open years, and for its current
fiscal period.
13. Use of Proceeds. The net proceeds from the sale of the Notes will
be used for general corporate purposes. None of the transactions
contemplated in the Agreement (including, without limitation thereof, the use
of proceeds from the issuance of the Notes) will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended, or
any regulation issued pursuant thereto, including, without limitation,
Regulations G, T and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II. None of the proceeds from the sale of the
Notes will be used to purchase, or refinance any borrowing the proceeds of
which were used to purchase, any "security" within the meaning of the
Securities Exchange Act of 1934, as amended.
14. Private Offering. Neither the Company, directly or indirectly, nor
any agent on its behalf has offered or will offer the Notes or any similar
Security or has solicited or will solicit an offer to acquire the Notes or
any similar Security from or has otherwise approached or negotiated or will
approach or negotiate in respect of the Notes or any similar Security with
any Person other than the Purchasers and not more than 9 other institutional
investors, each of whom was offered a portion of the Notes at private sale
for investment. Neither the Company, directly or indirectly, nor any agent
on its behalf has offered or will offer the Notes or any similar Security or
has solicited or will solicit an offer to acquire the Notes or any similar
Security from any Person so as to bring the issuance and sale of the Notes
within the provisions of Section 5 of the Securities Act of 1933, as amended.
15. ERISA. The Company (i) has fulfilled all obligations under the
minimum funding standards of ERISA and the Code with respect to each Pension
Plan that is not a Multiemployer, (ii) has satisfied all respective
contribution obligations in respect of each Multiemployer Plan, (iii) is in
compliance in all material respects with all other applicable provisions of
ERISA and the Code with respect to each Pension Plan and each Multiemployer
Plan, and (iv) has not incurred any liability under the Title IV of ERISA to
the PBGC with respect to any Pension Plan, any Multiemployer Plan or any
trust established thereunder.
No Pension Plan or trust created thereunder has been terminated, and
there have been no "reportable events" (as such term is defined in section
4043 of ERISA), with respect to any Pension Plan or trust created thereunder
or with respect to any Multiemployer Plan, which reportable event or events
will or could result in the termination of such Pension Plan or Multiemployer
Plan and give rise to a material liability of the Company or any ERISA
Affiliate in respect thereof.
Neither the Company nor any ERISA Affiliate is or has ever been an
employee required to contribute to any Multiemployer Plan.
Neither the Company nor any ERISA Affiliate is or has ever been a
"contributing sponsor" (as defined in Section 4001 of ERISA) in any Multiple
Employer Pension Plan.
16. Compliance with Law. Neither the Company nor any Restricted
Subsidiary has received notice nor does it have any knowledge that it (a) is
in violation of any law, ordinance, franchise, governmental rule or
regulation to which it is subject; or (b) has failed to obtain any license,
permit, franchise or other governmental authorization necessary to the
ownership of its property or to the conduct of its business, which violation
or failure to obtain, individually or in the aggregate, could have a material
adverse effect on the financial position or results of future operations of
the Company and its Restricted Subsidiaries, taken as a whole, or impair the
ability of the Company to perform its obligations contained in the Agreement
or the Notes. Neither the Company nor any Restricted Subsidiary is in
default with respect to any order of any court or governmental authority or
arbitration board or tribunal which could have a material adverse effect on
the financial position or results of future operations of the Company and its
Restricted Subsidiaries, taken as a whole.
17. Compliance with Environmental Laws. To the best of the Company's
knowledge, each of the Company and its Restricted Subsidiaries organized
under the laws of the United States or any jurisdiction thereof is in
substantial compliance with all environmental protection laws in effect in
each jurisdiction where it is presently doing business expect where the
failure to comply could reasonably be expected not to have a material adverse
effect on the financial position or results of future operations of the
Company and its Restricted Subsidiaries, taken as a whole.
To the best of the Company's knowledge, neither the Company nor any
Restricted Subsidiary organized under the laws of the United States or any
jurisdiction therein is subject to any liability under any environmental
protection laws that, in the aggregate, could be reasonably expected to have
a material adverse effect on the financial position or results of future
operations of the Company and its Restricted Subsidiaries, taken as a whole.
Neither the Company nor any Restricted Subsidiary organized under the
laws of the United States or any jurisdiction therein has received a:
(i) Notice from any governmental authority by which any of their
respective present or previously-owned or leased Properties has been
designated listed, or identified in any manner by any governmental
authority charged with administering or enforcing any environmental
protection law as hazardous substance disposal or removal site, "Super
Fund" clean-up site, or candidate for removal or closure pursuant to any
environmental protection law;
(ii) Notice of any Lien arising under or in connection with any
environmental protection law that has attached to any revenues of, or
to, any of their respective owned or leased properties; or
(iii) Summons, citation, notice, directive, letter, or other
communication, written or oral, from any governmental authority
concerning any intentional or unintentional action or omission by the
Company or such Restricted Subsidiary in connection with their
respective ownership or leasing of any property resulting in the
releasing, spilling, leaking, pumping, pouring, emitting, emptying,
dumping, or otherwise disposing of any hazardous substance into the
environment resulting in any material violation of any environmental
protection law.
18. Status. (a) Neither the Company nor any Subsidiary is, or is
directly or indirectly controlled by, or acting on behalf of any Person that
is, an "investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(b) Neither the Company nor any Subsidiary is a "holding company" or an
"affiliate" of a "holding company," or a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of
1935, as amended.
EXHIBIT B
(to Note Agreement)
SUBSIDIARIES OF THE COMPANY
1. RESTRICTED SUBSIDIARIES:
PERCENTAGE OF VOTING
JURISDICTION OF STOCK OWNED BY COMPANY
NAME OF SUBSIDIARY INCORPORATION AND EACH OTHER
SUBSIDIARY
Cherry Semiconductor Rhode Island 100%
Corporation
Cherry Mikroschalter GmbH Federal Republic 100%
of Germany
Cherry Electrical Products United Kingdom 100%
Limited
Cherry SARL France 100%
Cherasia Limited Hong Kong 100%
2. SUBSIDIARIES (OTHER THAN RESTRICTED SUBSIDIARIES):
PERCENTAGE OF VOTING
JURISDICTION OF STOCK OWNED BY COMPANY
NAME OF SUBSIDIARY INCORPORATION AND EACH OTHER
SUBSIDIARY
Cherry Australia Pty Ltd. Australia 100%
ANNEX A
(to Exhibit B)
DESCRIPTION OF DEBT AND LEASES
1. Current Debt of the Company and its Restricted Subsidiaries outstanding
on May 31, 1995 is as follows:
Uncommitted bank lines of Cherry Mikroschalter GmbH
with German banks $18,385,000
2. Funded Debt (other than Capitalized Rentals) of the Company and its
Restricted Subsidiaries outstanding on May 31, 1995 is as follows:
Multicurrency Credit Agreement of the Company $19,200,000
Various installment loans of Cherry Mikroschalter GmbH $11,962,000
3. Long-Term Leases of the Company and its Restricted Subsidiaries
outstanding on May 31, 1995 are as follows:
Various office equipment and a few facilities, most of which are three
years or less. Offices are leased in Japan, Australia, Hong Kong and
France. Total operating lease commitments for all future years are
$4,700,000 Only a small portion would be long-term leases.
4. Capitalized Leases of the Company and its Restricted Subsidiaries
outstanding on May 31, 1995 are as follows:
Siemens computer $1,865,000
All others $355,000
ANNEX B
(to Exhibit B)
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of Chapman and Cutler, special counsel to the
Purchasers, called for by section4.1 of the Note Agreement, shall be dated
the Closing Date and addressed to the Purchasers, shall be satisfactory in
form and substance to the Purchasers and shall be to the effect that:
1. The Company is a corporation, validly existing and in good
standing under the laws of the State of Delaware and has the corporate
power and the corporate authority to execute and deliver the Note
Agreement and to issue the Notes.
2. The Note Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed and
delivered by the Company and constitutes the legal, valid and binding
contract of the Company enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance and similar
laws affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, and the Notes being delivered on the
date hereof have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding
in equity or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreement do not, under existing
law, 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.
The opinion of Chapman and Cutler shall also state that the opinion of
McDermott, Will & Emery is satisfactory in scope and form to Chapman and
Cutler and that, in their opinion, the Purchasers are justified in relying
thereon.
In rendering the opinion set forth in paragraph 1 above, Chapman and
Cutler may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Certificate of Incorporation certified by, and a
certificate of good standing of the Company from, the Secretary of State of
the State of Delaware, the By-laws of the Company and the general business
corporation law of the State of Delaware. The opinion of Chapman and Cutler
is limited to the laws of the State of Illinois, the general business
corporation law of the State of Delaware and the Federal laws of the United
States.
With respect to matters of fact upon which such opinion is based,
Chapman and Cutler may rely on appropriate certificates of public officials
and officers of the Company and upon representations of the Company and the
Purchasers delivered in connection with the issuance and sale of the Notes.
EXHIBIT C
(to Note Agreement)
DESCRIPTION OF CLOSING OPINION
OF COUNSEL TO THE COMPANY
The closing opinion of McDermott, Will & Emery, counsel for the Company,
which is called for by section4.1 of the Note Agreement, shall be dated the
Closing Date and addressed to the Purchasers, shall be satisfactory in scope
and form to the Purchasers and shall be to the effect that:
1. The Company is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Delaware,
has the corporate power and the corporate authority to execute and
perform the Note Agreement and to issue the Notes and has the full
corporate power and the corporate authority to conduct the activities in
which it is now engaged and is duly licensed or qualified and is in good
standing as a foreign corporation in each jurisdiction in which the
character of the properties owned or leased by it or the nature of the
business transacted by it makes such licensing or qualification
necessary.
2. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is duly licensed or qualified and is in good standing
in each jurisdiction in which the character of the properties owned or
leased by it or the nature of the business transacted by it makes such
licensing or qualification necessary and all of the issued and
outstanding shares of capital stock of each such Subsidiary have been
duly issued, are fully paid and non-assessable and are owned by the
Company, by one or more Subsidiaries, or by the Company and one or more
Subsidiaries.
3. The Note Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed and
delivered by the Company and constitutes the legal, valid and binding
contract of the Company enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance and similar
laws affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
4. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, have been duly executed and delivered
by the Company and constitute the legal, valid and binding obligations
of the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance and similar laws affecting
creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered
in a proceeding in equity or at law).
5. No approval, consent or withholding of objection on the part
of, or filing, registration or qualification with, any governmental
body, Federal or state, is necessary in connection with the execution
and delivery of the Note Agreement or the Notes.
6. The issuance and sale of the Notes and the execution, delivery
and performance by the Company of the Note Agreement do not conflict
with or result in any breach of any of the provisions of or constitute a
default under or result in the creation or imposition of any Lien upon
any of the property of the Company pursuant to the provisions of the
Certificate of Incorporation or By-laws of the Company or any agreement
or other instrument known to such counsel to which the Company is a
party or by which the Company may be bound.
7. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreement do not, under existing
law, 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.
The opinion of McDermott, Will & Emery 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. The opinion of McDermott, Will & Emery may be
relied upon by each Purchaser and subsequent transferees of the Notes.
EXHIBIT D
(to Note Agreement)
