FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 001-08772
HUGHES SUPPLY, INC.
(Exact name of registrant as specified in its charter)
Florida 59-0559446
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 North Orange Avenue, Suite 200, Orlando, Florida 32801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 407/841-4755
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock Outstanding as of August 31, 1997
$1 Par Value 18,306,585
Page 1
HUGHES SUPPLY, INC.
FORM 10-Q
Index
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of
July 31, 1997 and January 31, 1997 ............ 3 - 4
Consolidated Statements of Income for the
Three Months Ended July 31, 1997 and 1996 ..... 5
Consolidated Statements of Income for the
Six Months Ended July 31, 1997 and 1996 ....... 6
Consolidated Statements of Cash Flows for the
Six Months Ended July 31, 1997 and 1996 ....... 7
Notes to Consolidated Financial Statements .... 8 - 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations ................................. 11 - 14
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security
Holders ....................................... 15
Item 5. Other Information ............................. 16
Item 6. Exhibits and Reports on Form 8-K .............. 16 - 21
Signatures .................................... 22
Index of Exhibits Filed with This Report ...... 23
Page 2
HUGHES SUPPLY, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets (unaudited)
(in thousands, except share data)
July 31, January 31,
1997 1997
---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 10,712 $ 6,329
Accounts receivable, less allowance for
losses of $5,259 and $3,809 246,336 195,200
Inventories 265,458 250,113
Deferred income taxes 13,619 12,761
Other current assets 12,487 12,366
--------- ---------
Total current assets 548,612 476,769
Property and Equipment, net 87,654 73,038
Excess of Cost over Net Assets Acquired 97,655 89,755
Deferred Income Taxes 2,460 2,204
Other Assets 12,095 7,736
--------- ---------
$ 748,476 $ 649,502
========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
Page 3
HUGHES SUPPLY, INC.
Consolidated Balance Sheets (unaudited) - continued
(in thousands, except share data)
July 31, January 31,
1997 1997
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 5,375 $ 3,108
Accounts payable 135,721 111,997
Accrued compensation and benefits 14,070 16,508
Other current liabilities 21,142 14,768
--------- ---------
Total current liabilities 176,308 146,381
Long-Term Debt 262,096 221,988
Other Noncurrent Liabilities 2,480 2,199
--------- ---------
Total liabilities 440,884 370,568
--------- ---------
Commitments and Contingencies
Shareholders' Equity:
Preferred stock - -
Common stock-17,915,866 and
17,277,169 shares issued and outstanding 17,916 17,277
Capital in excess of par value 119,189 109,168
Retained earnings 170,487 152,489
--------- ---------
Total shareholders' equity 307,592 278,934
--------- ---------
$ 748,476 $ 649,502
========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
Page 4
HUGHES SUPPLY, INC.
Consolidated Statements of Income (unaudited)
(in thousands, except per share data)
Three months ended July 31,
1997 1996
---------- ----------
Net Sales $ 461,394 $ 395,817
Cost of Sales 361,528 314,221
---------- ----------
Gross Profit 99,866 81,596
---------- ----------
Operating Expenses:
Selling, general and administrative 71,905 60,422
Depreciation and amortization 4,308 3,789
Provision for doubtful accounts 163 832
---------- ----------
Total operating expenses 76,376 65,043
---------- ----------
Operating Income 23,490 16,553
---------- ----------
Non-Operating Income and (Expenses):
Interest and other income 1,246 2,013
Interest expense (4,433) (3,465)
---------- ----------
(3,187) (1,452)
---------- ----------
Income Before Income Taxes 20,303 15,101
Income Taxes 8,020 5,903
---------- ----------
Net Income $ 12,283 $ 9,198
========== ==========
Earnings Per Share:
Primary $ .68 $ .58
========== ==========
Fully diluted $ .68 $ .58
========== ==========
Average Shares Outstanding:
Primary 18,068 15,971
========== ==========
Fully diluted 18,078 15,975
========== ==========
Dividends Per Share $ .075 $ .06
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
Page 5
HUGHES SUPPLY, INC.
Consolidated Statements of Income (unaudited)
(in thousands, except per share data)
Six months ended July 31,
1997 1996
---------- ----------
Net Sales $ 882,779 $ 745,317
Cost of Sales 693,752 594,378
---------- ----------
Gross Profit 189,027 150,939
---------- ----------
Operating Expenses:
Selling, general and administrative 140,579 116,661
Depreciation and amortization 8,848 6,532
Provision for doubtful accounts 507 1,683
---------- ----------
Total operating expenses 149,934 124,876
---------- ----------
Operating Income 39,093 26,063
---------- ----------
Non-Operating Income and (Expenses):
Interest and other income 2,480 3,608
Interest expense (8,414) (5,926)
---------- ----------
(5,934) (2,318)
---------- ----------
Income Before Income Taxes 33,159 23,745
Income Taxes 13,099 9,024
---------- ----------
Net Income $ 20,060 $ 14,721
========== ==========
Earnings Per Share:
Primary $ 1.12 $ 1.01
========== ==========
Fully diluted $ 1.12 $ 1.01
========== ==========
Average Shares Outstanding:
Primary 17,949 14,504
========== ==========
Fully diluted 17,991 14,522
========== ==========
Dividends Per Share $ .148 $ .12
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
Page 6
HUGHES SUPPLY, INC.
Consolidated Statements of Cash Flows (unaudited)
(in thousands)
Six months ended July 31,
1997 1996
---------- ----------
Increase (Decrease) in Cash and Cash
Equivalents:
Cash flows from operating activities:
Cash received from customers $ 836,871 $ 714,190
Cash paid to suppliers and employees (828,893) (704,717)
Interest received 1,751 1,980
Interest paid (8,215) (4,835)
Income taxes paid (10,527) (7,587)
---------- ----------
Net cash used in
operating activities (9,013) (969)
---------- ----------
Cash flows from investing activities:
Capital expenditures (18,725) (8,269)
Proceeds from sale of
property and equipment 249 1,552
Business acquisitions, net of cash (5,158) (81,393)
---------- ----------
Net cash used in
investing activities (23,634) (88,110)
---------- ----------
Cash flows from financing activities:
Net borrowings (payments) under
short-term debt arrangements 44,378 (43,635)
Principal payments on:
Long-term notes (4,826) (13,210)
Capital lease obligations (461) (428)
Proceeds from issuance of long-term debt - 98,000
Net proceeds from sale of common stock - 48,201
Proceeds from stock options exercised 651 710
Purchase of common shares (195) (301)
Dividends paid (2,517) (3,250)
---------- ----------
Net cash provided by
financing activities 37,030 86,087
---------- ----------
Net Increase (Decrease) in Cash and
Cash Equivalents 4,383 (2,992)
Cash and Cash Equivalents:
Beginning of period 6,329 3,644
---------- ----------
End of period $ 10,712 $ 652
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
Page 7
HUGHES SUPPLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) (dollars in thousands, except per share data)
1. In the opinion of Hughes Supply, Inc. (the "Company"), the
accompanying unaudited consolidated financial statements contain
all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the financial position as of July 31,
1997, the results of operations for the three months and six months
ended July 31, 1997 and 1996, and cash flows for the six months
then ended.
The fiscal year of the Company is a 52- or 53-week period ending on
the last Friday in January. Fiscal year 1998 will be a 52-week
period while fiscal year 1997 was a 53-week period. The six months
ended July 31, 1997 and 1996 contained 26 weeks and 27 weeks,
respectively and the quarters ended July 31, 1997 and 1996 each
contained 13 weeks.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings per
Share ("SFAS 128"). SFAS 128, which supersedes Accounting
Principles Board Opinion No. 15, establishes standards for
computing and presenting earnings per share. SFAS 128 is effective
for financial statements issued for periods ending after December
15, 1997 and, accordingly, will be adopted by the Company
commencing with its period ending January 30, 1998. When adopted,
all prior-period earnings per share data are required to be
restated. The Company does not expect the adoption of SFAS 128 to
have a material effect on the calculation of its earnings per
share.
2. During the six months ended July 31, 1997, the Company acquired
five wholesale distributors of materials to the construction
industry for cash and stock. These acquisitions have been
accounted for as purchases or immaterial poolings and did not have
a material effect on the consolidated financial statements of the
Company. Results of operations of these companies from their
respective dates of acquisition have been included in the
consolidated financial statements.
3. On May 20, 1997, the Company's Board of Directors declared a three-
for-two stock split to shareholders of record as of July 10, 1997.
The date of issuance for the additional shares was July 17, 1997.
Accordingly, all share and per share data have been restated for
periods prior to the stock split.
Page 8
HUGHES SUPPLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited) (dollars in thousands, except per share data)
On May 20, 1997, the Company's Board of Directors increased the
regular quarterly cash dividend from $.073 per share to $.075 per
share effective for the second quarter dividend which was payable
on August 15, 1997 to shareholders of record on August 1, 1997.
On May 20, 1997, the shareholders approved an amendment to the
Restated Articles of Incorporation of the Company increasing the
number of authorized shares of common stock from 20,000,000 to
100,000,000 shares, $1.00 par value per share.
4. The following is a reconciliation of net income to net cash
provided by (used in) operating activities:
Six months ended July 31,
1997 1996
---------- ----------
Net income $ 20,060 $ 14,721
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities:
Depreciation 5,788 4,493
Amortization 3,060 2,039
Provision for doubtful accounts 507 1,683
Gain on sale of property
and equipment (146) (1,013)
Undistributed earnings
of affiliate (156) (32)
Changes in assets and liabilities,
net of effects of acquisitions:
(Increase) decrease in:
Accounts receivable (46,335) (31,710)
Inventories (10,859) 11,510
Other current assets 548 6,851
Other assets (4,131) (1,204)
Increase (decrease) in:
Accounts payable and accrued
expenses 19,599 (11,083)
Accrued interest and income
taxes 3,865 4,378
Other noncurrent liabilities 281 248
Increase in deferred income taxes (1,094) (1,850)
---------- ----------
Net cash used in
operating activities $ (9,013) $ (969)
========== ==========
Page 9
HUGHES SUPPLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited) (dollars in thousands, except per share data)
5. Subsequent events:
On August 18, 1997, the Company's revolving credit and line of
credit agreement with a group of banks was amended. The agreement,
as amended, now permits the Company to borrow up to $180,000
(subject to borrowing limitations under the agreement) - $130,000
of which is long-term debt, expiring August 17, 2000, and $50,000
of which is a line of credit convertible to a term note due two
years from conversion date.
On August 28, 1997, the Company issued $80,000 of senior notes due
2012 in a private placement. The notes, of which $40,000 bear
interest at 7.14% and $40,000 bear interest at 7.19%, will be
payable in 21 and 13 equal semi-annual payments beginning in 2002
and 2006, respectively. Proceeds received by the Company from the
sale of the notes were used to reduce indebtedness outstanding
under the Company's revolving credit and line of credit agreement.
Page 10
HUGHES SUPPLY, INC.
PART I. FINANCIAL INFORMATION - Continued
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following is management's discussion and analysis of certain
significant factors which have affected the financial condition of the
Company as of July 31, 1997, and the results of operations for the three
and six months then ended.
As described in Note 3 of the Notes to Consolidated Financial
Statements, on May 20, 1997 the Company's Board of Directors declared a
three-for-two stock split to shareholders of record as of July 10, 1997.
Accordingly, all share and per share data have been restated for periods
prior to the stock split.
Certain statements set forth in Management's Discussion and Analysis of
Financial Condition and Results of Operations constitute "forward-
looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Act of 1934,
as amended, and are subject to the safe harbor created by such sections.
When used in this report, the words "believe", "anticipate", "estimate",
"expect", and similar expressions are intended to identify forward-
looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give
no assurance that such expectations will prove to be correct. The
Company's actual results may differ significantly from the results
discussed in such forward-looking statements. When appropriate, certain
factors that could cause results to differ materially from those
projected in the forward-looking statements are enumerated. This
Management's Discussion and Analysis of Financial Condition and Results
of Operations should be read in conjunction with the Company's
consolidated financial statements and the notes thereto.
Material Changes in Results of Operations
Net Sales
Net sales increased to $461 million for the quarter ended July 31, 1997,
17% over the prior year's second quarter. Net sales for the six months
were $883 million which was 18% ahead of last year. On a basis
comparable to the prior year, the Company experienced a same-store net
sales increase of 4% and 7% for the three and six months ended July 31,
1997, respectively. The remaining increase in net sales is attributable
to newly-opened and acquired wholesale outlets.
Page 11
The same-store sales increase of 4% for the second quarter was below the
high single-digit increases the Company has achieved in recent years.
This was primarily due to the impact the mild and wet weather had on air
conditioning and pool product sales. On the other hand, two of the
Company's newest product groups - water and sewer and industrial pipe,
valves and fittings - achieved double-digit same-store sales increases
which helped offset the decline in same-store sales growth.
Gross Profit
Gross profit and gross margin for the three and six months ended July
31, 1997 and 1996 were as follows (dollars in thousands):
<TABLE>
<CAPTION>
1997 1996
Gross Gross Gross Gross Variance
Profit Margin Profit Margin Amount %
<S> <C> <C> <C> <C> <C> <C>
Three months ended $ 99,866 21.6% $ 81,596 20.6% $ 18,270 22.4%
Six months ended $ 189,027 21.4% $ 150,939 20.3% $ 38,088 25.2%
</TABLE>
The improvement in gross margins has resulted from several factors,
including expansion of product offerings to lines with better margins,
efficiencies created with central distribution centers, increased
volume, and concentration of supply sources as part of the Company's
preferred vendor program.
Operating Expenses
Operating expenses for the three and six months ended July 31, 1997 and
1996 were as follows (dollars in thousands):
<TABLE>
<CAPTION>
1997 1996
% of % of Variance
Amount Net Sales Amount Net Sales Amount %
<S> <C> <C> <C> <C> <C> <C>
Three months ended $ 76,376 16.6% $ 65,043 16.4% $ 11,333 17.4%
Six months ended $ 149,934 17.0% $ 124,876 16.8% $ 25,058 20.1%
</TABLE>
Approximately 13 and 16 percentage points of the 17.4% and 20.1%
increases in operating expenses for the three and six months ended July
31, 1997, respectively, is attributable to newly-opened wholesale
outlets and recent acquisitions. The remainder of the increase is
primarily due to personnel and transportation costs associated with
same-store sales growth.
Non-Operating Income and Expenses
Interest and other income decreased $.8 million and $1.1 million for the
three and six months ended July 31, 1997, respectively, over the prior
year periods. The decreases are primarily attributable to non-recurring
gains recognized on the sale of property and equipment during the second
quarter of last year.
Page 12
Interest expense was $4.4 million and $8.4 million for the three and six
months ended July 31, 1997 compared to $3.5 million and $5.9 million for
the three and six months ended July 31, 1996, respectively. The
increases are primarily the result of higher borrowing levels as
interest rates remained essentially unchanged. Expansion through
business acquisitions has been partially funded by debt financing.
Income Taxes
The effective tax rates for the three and six months ended July 31, 1997
and 1996 were as follows:
1997 1996
Three months ended 39.5% 39.1%
Six months ended 39.5% 38.0%
Prior to the mergers on April 26, 1996 with ELASCO and January 24, 1997
with Metals, Incorporated and Stainless Tubular Products, Inc., all
three entities were Subchapter S corporations and, therefore, not
subject to corporate income tax. Each entity's Subchapter S corporation
status terminated upon the merger with the Company. As a result, the
Company's effective rate is higher for the three and six months ended
July 31, 1997 compared to the prior year periods. The Company's
effective tax rate for the three and six months ended July 31, 1996
would have been approximately 41% assuming ELASCO, Metals, Incorporated
and Stainless Tubular Products, Inc. were tax paying entities.
Net Income
Net income for the second quarter increased 34% to $12.3 million. Fully
diluted earnings per share for the second quarter were $.68 compared to
$.58 in the prior year, a 17% increase with 13% more shares outstanding.
For the six months ended July 31, 1997, net income reached $20.1
million, a 36% increase over the six months ended July 31, 1996. Fully
diluted earnings per share for the six months ended July 31, 1997 and
1996 were $1.12 and $1.01, respectively. This increase of 11% was on
24% more shares outstanding.
These improved results reflect operating leverage that has been achieved
through the Company's acquisition program and through internal growth.
Operating margins (operating income as a percentage of net sales) have
improved to 5.1% and 4.4% for the three and six months ended July 31,
1997, compared to 4.2% and 3.5% for the three and six months ended July
31, 1996, respectively.
Page 13
Liquidity and Capital Resources
Working capital at July 31, 1997 amounted to $372 million compared to
$330 million at January 31, 1997. The working capital ratio was 3.1 to
1 and 3.3 to 1 as of July 31, 1997 and January 31, 1997, respectively.
The Company typically becomes more leveraged in expansionary periods.
Consequently, higher levels of inventories and receivables, trade
payables and debt are required to support the growth.
Net cash used by operations was $9.0 million for the six months ended
July 31, 1997 compared to $1.0 million for the six months ended July 31,
1996. This change is primarily due to fluctuations in accounts
receivable and inventories resulting from the Company's growth.
Expenditures for property and equipment were $18.7 million for the six
months ended July 31, 1997 compared to $8.3 million for the six months
ended July 31, 1996. Capital expenditures for property and equipment,
not including amounts for business acquisitions, are expected to be
approximately $22 million for fiscal year 1998.
Cash payments for business acquisitions accounted for as purchases
totaled $5.2 million for the six months ended July 31, 1997. In
addition, the Company issued approximately 382,000 of its common shares
valued at approximately $9.4 million for such purchases.
Principal reductions on long-term debt were $4.8 million for the six
months ended July 31, 1997 compared to $13.2 million for the prior year
six months. These amounts are attributed primarily to the repayment of
debt assumed as a result of certain business acquisitions. Dividend
payments were $2.5 million during the six months ended July 31, 1997 and
$3.3 million (including $2.0 million in cash dividends of pooled
companies) during the six months ended July 31, 1996.
As discussed in Note 5 of the Notes to Consolidated Financial
Statements, in August 1997 the Company issued $80 million of senior
notes in a private placement. The proceeds of this offering were used
to reduce indebtedness outstanding under the Company's bank debt.
In August 1997, the Company's revolving credit and line of credit
agreement with a group of banks was amended. The agreement now permits
the Company to borrow up to $180 million ($150 million previously).
After giving effect to this amendment and the issuance of the $80
million of senior notes as set forth above, the Company would have had
$116 million of unused borrowing capacity (subject to borrowing
limitations under long-term debt covenants) as of July 31, 1997. With
this facility, the Company believes it has sufficient borrowing capacity
to take advantage of growth and business acquisition opportunities and
has the resources necessary to fund ongoing operating requirements and
anticipated capital expenditures. Future expansion will continue to be
financed on a project-by-project basis through additional borrowing, or,
as circumstances allow, through the issuance of common stock.
Page 14
HUGHES SUPPLY, INC.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The 1997 Annual Meeting of Shareholders (the "Annual Meeting") was held
on May 20, 1997. At the Annual Meeting, holders of 10,324,484 shares of
the Company's common stock were present in person or by proxy. At the
Annual Meeting, Messrs. Robert N. Blackford, A. Stewart Hall, Jr., H.
Corbin Day and Donald C. Martin were elected directors of the Company to
hold office until the 2000 Annual Meeting and until the election and
qualification of their respective successors or until the earlier of
their death, resignation or removal. The tabulation of the votes
present in person or by proxy at the Annual Meeting with respect to each
nominee for office are as follows:
Authority
For Withheld
Robert N. Blackford 10,097,396 227,088
A. Stewart Hall, Jr. 10,097,396 227,088
H. Corbin Day 10,097,396 227,088
Donald C. Martin 10,097,396 227,088
Messrs. David H. Hughes, Vincent S. Hughes, John D. Baker II, John B.
Ellis, Clifford M. Hames and Herman B. McManaway each continued their
term of office as a director of the Company after the Annual Meeting.
The shareholders of the Company also voted on proposals to: (i) amend
the Company's Restated Articles of Incorporation to increase the number
of authorized shares of common stock, $1.00 par value per share, from 20
million shares to 100 million shares ("Proposal 1"); and (ii) approve
the 1997 Executive Stock Plan ("Proposal 2").
The tabulation of votes with respect to the foregoing proposals are as
follows:
Authority
For Withheld Abstain
Proposal 1 7,030,655 3,273,515 20,314
Proposal 2 8,191,482 2,077,008 55,994
Page 15
Item 5. Other Information
The Company entered into an Amended and Restated Revolving Credit and
Line of Credit Agreement, dated as of August 18, 1997 (the "Amended
Credit Agreement"), with SunTrust Bank, Central Florida, National
Association, ("SunTrust"), individually, as Agent, SouthTrust Bank,
National Association ("SouthTrust"), NationsBank, N.A. ("NationsBank"),
First Union National Bank ("First Union"), Barnett Bank, N.A.
("Barnett") and PNC Bank, Kentucky, Inc. ("PNC") (SunTrust, SouthTrust,
NationsBank, First Union, Barnett and PNC are collectively referred to
herein as the "Lenders"). The Amended Credit Agreement provides for the
amendment and restatement of the Company's existing credit facility with
the Lenders (other than PNC and Barnett) and SunTrust Bank, Atlanta and
for a Revolving Loan Commitment and a Line of Credit Commitment of $130
million and $50 million, respectively.
Pursuant to the Note Purchase Agreement, dated as of August 28, 1997
(the "Note Purchase Agreement"), by and among the Company and certain
purchasers identified in Schedule A of the Note Purchase Agreement, the
Company issued $40 million of its 7.14% Senior Notes (the "Series A
Notes") and $40 million of its 7.19% Senior Notes (the "Series B
Notes"). Both the Series A Notes and the Series B Notes are due May 30,
2012.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Filed
(2) Plan of acquisition, reorganization, arrangement, liquidation
or succession. Not applicable.
(3) Articles of incorporation and by-laws.
3.1 Restated Articles of Incorporation, as amended, filed as
Exhibit 3.1 to Form 10-Q for the quarter ended April 30,
1997 (Commission File No. 001-08772).
3.2 Composite By-Laws, as amended, filed as Exhibit 3.2 to
Form 10-Q for the quarter ended July 31, 1994 (Commission
File No. 001-08772).
(4) Instruments defining the rights of security holders, including
indentures.
4.1 Specimen Stock Certificate representing shares of the
Registrant's common stock, $1.00 par value.
4.2 Resolution Approving and Implementing Shareholder Rights
Plan filed as Exhibit 4.4 to Form 8-K dated May 17, 1988
(Commission File No. 0-5235).
Page 16
(10) Material contracts.
10.1 Lease Agreements with Hughes, Inc.
(a) Orlando Trucking, Garage and Maintenance Operations
dated December 1, 1971, filed as Exhibit 13(n) to
Registration No. 2-43900 (Commission File No. 0-
5235). Letter dated April 15, 1992 extending lease
from month to month, filed as Exhibit 10.1(a) to
Form 10-K for the fiscal year ended January 31,
1992 (Commission File No. 0-5235).
(b) Leases effective March 31, 1988, filed as Exhibit
10.1(c) to Form 10-K for the fiscal year ended
January 27, 1989 (Commission File No. 0-5235).
Sub-Item Property
(1) Clearwater
(2) Daytona Beach
(3) Fort Pierce
(4) Lakeland
(6) Leesburg
(7) Orlando Electrical Operation
(8) Orlando Plumbing Operation
(9) Orlando Utility Warehouse
(11) Sarasota
(13) Winter Haven
(c) Lease amendment letter between Hughes, Inc. and the
Registrant, dated December 1, 1986, amending
Orlando Truck Operations Center and Maintenance
Garage lease, filed as Exhibit 10.1(i) to Form 10-K
for the fiscal year ended January 30, 1987
(Commission File No. 0-5235).
(d) Lease agreement dated June 1, 1987, between Hughes,
Inc. and the Registrant, for additional Sarasota
property, filed as Exhibit 10.1(j) to Form 10-K for
the fiscal year ended January 29, 1988 (Commission
File No. 0-5235).
(e) Leases dated March 11, 1992, filed as Exhibit
10.1(e) to Form 10-K for the fiscal year ended
January 31, 1992 (Commission File No. 0-5235).
Sub-Item Property
(2) Gainesville Electrical Operation
Page 17
10.2 Hughes Supply, Inc. 1988 Stock Option Plan as amended
March 12, 1996 filed as Exhibit 10.2 to Form 10-K for the
fiscal year ended January 26, 1996 (Commission File No.
001-08772).
10.3 Form of Supplemental Executive Retirement Plan Agreement
entered into between the Registrant and eight of its
executive officers, filed as Exhibit 10.6 to Form 10-K
for fiscal year ended January 30, 1987 (Commission File
No. 0-5235).
10.4 Directors' Stock Option Plan, as amended, filed as
Exhibit 10.4 to Form 10-Q for the quarter ended July 31,
1994 (Commission File No. 001-08772).
10.5 Asset Purchase Agreement with Accord Industries Company,
dated October 9, 1990, for sale of Registrant's
manufacturing operations, filed as Exhibit 10.7 to Form
10-K for the fiscal year ended January 25, 1991
(Commission File No. 0-5235).
10.6 Lease Agreement dated June 30, 1993 between Donald C.
Martin and Electrical Distributors, Inc., filed as
Exhibit 10.6 to Form 10-K for the fiscal year ended
January 28, 1994 (Commission File No. 001-08772).
10.7 Consulting Agreement dated June 30, 1993 between Hughes
Supply, Inc. and Donald C. Martin, filed as Exhibit 10.7
to Form 10-K for the fiscal year ended January 28, 1994
(Commission File No. 001-08772).
10.8 Written description of senior executives' long-term
incentive bonus plan for fiscal year 1996 incorporated by
reference to the description of the bonus plan set forth
under the caption "Approval of the Stock Award Provisions
of the Senior Executives' Long-Term Incentive Bonus Plan
for Fiscal Year 1996" on pages 26 and 27 of the
Registrant's Proxy Statement Annual Meeting of
Shareholders To Be Held May 24, 1994 (Commission File No.
001-08772).
10.9 Hughes Supply, Inc. Amended Senior Executives' Long-Term
Incentive Bonus Plan, adopted January 25, 1996, filed as
Exhibit 10.9 to Form 10-K for the fiscal year ended
January 26, 1996 (Commission File No. 001-08772).
10.10 Lease Agreement dated June 24, 1996 between Donald C.
Martin and Hughes Supply, Inc., filed as Exhibit 10.10 to
Form 10-Q for the quarter ended October 31, 1996
(Commission File No. 001-08772).
Page 18
10.11 Lease Agreements between Union Warehouse & Trucking
Company (d/b/a Union Warehouse & Realty Company) or
Monoco Realty and USCO Incorporated.
(a) Leases dated March 1, 1985 and amended December 23,
1986, filed as Exhibit 10.11(a) to Form 10-K for
the fiscal year ended January 26, 1996 (Commission
File No. 001-08772).
Sub-Item Property
(1) 610 East Windsor St., Monroe, NC
(2) 113-115 Henderson St., Monroe, NC
(3) Statesville, NC
(4) Charlotte, NC
(5) Durham, NC
(6) Pinehurst, NC
(7) West Columbia, SC
(b) Lease dated July 1, 1986 and amended December 23,
1986 for Aiken, South Carolina property, filed as
Exhibit 10.11(b) to Form 10-K for the fiscal year
ended January 26, 1996 (Commission File No. 001-
08772).
(c) Lease dated March 1, 1990 for Greenville, South
Carolina property, filed as Exhibit 10.11(c) to
Form 10-K for the fiscal year ended January 26,
1996 (Commission File No. 001-08772).
(d) Lease dated November 1, 1993 for Cheraw, South
Carolina property, filed as Exhibit 10.11(d) to
Form 10-K for the fiscal year ended January 26,
1996 (Commission File No. 001-08772).
(e) Lease dated March 1, 1985 and amended October 1,
1992 for 1515 Morgan Mill Road, Monroe, North
Carolina property, filed as Exhibit 10.11(e) to
Form 10-K for the fiscal year ended January 26,
1996 (Commission File No. 001-08772).
(f) Lease amendment letter between Union Warehouse &
Realty Company, Monoco Realty Company and Hughes
Supply, Inc., dated October 18, 1994, amending the
leases for the eleven properties listed in Exhibit
10.11(a) through (e), filed as Exhibit 10.11(f) to
Form 10-K for the fiscal year ended January 26,
1996 (Commission File No. 001-08772).
Page 19
(g) Lease effective February 1, 1996 for Pineville,
North Carolina property, filed as Exhibit 10.11(g)
to Form 10-K for the fiscal year ended January 26,
1996 (Commission File No. 001-08772).
10.12 Lease Agreement effective February 1, 1993 between Union
Warehouse & Realty Company and Moore Electric Supply,
Inc., filed as Exhibit 10.12 to Form 10-K for the fiscal
year ended January 26, 1996 (Commission File No. 001-
08772).
10.13 Lease Agreement dated April 14, 1997 between Union
Warehouse & Realty Co. and the Registrant, filed as
Exhibit 10.13 to Form 10-Q for the quarter ended April
30, 1997 (Commission File No. 001-08772).
10.14 Amended and Restated Revolving Credit Agreement and Line
of Credit Agreement, dated as of August 18, 1997, by and
among the Company, SunTrust, SouthTrust, NationsBank,
First Union, Barnett and PNC. The Amended Credit
Agreement contains a table of contents identifying the
contents of Schedules and Exhibits, all of which have
been omitted. The Company agrees to furnish a
supplemental copy of any omitted Schedule or Exhibit to
the Commission upon request.
10.15 Note Purchase Agreement, dated as of August 28, 1997, by
and among the Company and certain purchasers identified
in Schedule A of the Note Purchase Agreement.
(11) Statement re computation of per share earnings.
11.1 Summary schedule of earnings per share calculations.
(15) Letter re unaudited interim financial information. Not
applicable.
(18) Letter re change in accounting principles. Not applicable.
(19) Report furnished to security holders. Not applicable.
(22) Published report regarding matters submitted to vote of
security holders. Not applicable.
(23) Consents of experts and counsel. Not applicable.
(24) Power of attorney. Not applicable.
Page 20
(27) Financial data schedule.
27.1 Financial data schedule (filed electronically only).
27.2 Restated financial data schedule (filed electronically
only).
27.3 Restated financial data schedule (filed electronically
only).
(99) Additional exhibits. Not applicable.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter
ended July 31, 1997.
Page 21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HUGHES SUPPLY, INC.
Date: September 9, 1997 By: /s/ David H. Hughes
David H. Hughes, Chairman of
the Board and Chief Executive
Officer
Date: September 9, 1997 By: /s/ J. Stephen Zepf
J. Stephen Zepf, Treasurer,
Chief Financial Officer and
Chief Accounting Officer
Page 22
INDEX OF EXHIBITS FILED WITH THIS REPORT
4.1 Specimen Stock Certificate representing shares of the
Registrant's common stock, $1.00 par value.
10.14 Amended and Restated Revolving Credit Agreement and Line of
Credit Agreement, dated as of August 18, 1997, by and among
the Company, SunTrust, SouthTrust, NationsBank, First Union,
Barnett and PNC. The Amended Credit Agreement contains a
table of contents identifying the contents of Schedules and
Exhibits, all of which have been omitted. The Company agrees
to furnish a supplemental copy of any omitted Schedule or
Exhibit to the Commission upon request.
10.15 Note Purchase Agreement, dated as of August 28, 1997, by and
among the Company and certain purchasers identified in
Schedule A of the Note Purchase Agreement.
11.1 Summary schedule of earnings per share calculations.
27.1 Financial data schedule (filed electronically only).
27.2 Restated financial data schedule (filed electronically only).
27.3 Restated financial data schedule (filed electronically only).
Page 23
<TABLE>
<S><C>
<PG$PCN>
NUMBER COMMON STOCK COMMON STOCK
HS
[HUGHES SUPPLY, INC. LOGO]
INCORPORATED UNDER THE LAWS SHARES
OF THE STATE OF FLORIDA SEE REVERSE
FOR CERTAIN
ABBREVIATIONS
HUGHES SUPPLY, INC.
THIS CERTIFIES THAT CUSIP 444482 10 3
IS THE OWNER OF
FULL-PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, PAR VALUE ONE DOLLAR ($1.00) PER SHARE OF
Hughes Supply, Inc. transferable on the books of the Corporation by the holder hereof in person or by duly
authorized attorney upon the surrender of this Certificate properly endorsed. This Certificate and the
shares represented hereby are issued and shall be held subject to all of the provisions of the Certificate
of Incorporation, as amended, of the Corporation, to all of which the holder of this Certificate by
acceptance hereof assents. This Certificate is not valid until countersigned by the Transfer Agent
and Registrar.
In Witness Whereof the said Corporation has caused this Certificate to be signed by its duly
authorized officers and the Corporate Seal to be hereunto affixed.
Dated:
COUNTERSIGNED AND REGISTERED:
AMERICAN STOCK TRANSFER & TRUST COMPANY
AS TRANSFER AGENT
BY: AND REGISTRAR /s/ Benjamin P. Butterfield /s/ A. S. Hall, Jr.
SECRETARY PRESIDENT
[SEAL] AUTHORIZED SIGNATURE
<PG$PCN>
The corporation will furnish without charge to each stock holder who so
requests, the designations, preferences and relative, participating, optional
or other special rights of each class of stock or series thereof, and the
qualifications, limitations or restrictions of such preferences and/or rights.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -- Custodian
TEN ENT - as tenants by the entireties -------------------------
JT TEN - as joint tenants with right of (Cust) (Minor)
survivorship and not as tenants under Uniform Gifts to Minors
in common Act
-------------------------
(State)
Additional abbreviations may also be used though not in the above list.
For value received, _____________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________________ shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint ____________________________________ Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated__________________
_____________________________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURE(S) GUARANTEED:______________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND
LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in the Rights Agreement (the "Rights Agreement") dated as
of May 17, 1988, and amended as of June 5, 1997, between Hughes Supply, Inc.
(the "Company") and American Stock Transfer & Trust Company (the "Rights
Agent"), the terms of which are hereby incorporated herein by reference and a
copy of which is on file at the principal offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a copy of
the Rights Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or held by,
any Person who is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent holder, may
become null and void.
</TABLE>
AMENDED AND RESTATED
REVOLVING CREDIT AND LINE OF CREDIT AGREEMENT
Dated as of August 18, 1997
By And Among
HUGHES SUPPLY, INC.
AND
SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION,
individually and as Agent,
SOUTHTRUST BANK, NATIONAL ASSOCIATION,
NATIONSBANK, N.A.,
FIRST UNION NATIONAL BANK
BARNETT BANK, N.A., and
PNC BANK, KENTUCKY, INC.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; CONSTRUCTION 2
Section 1.01. Definitions 2
Section 1.02. Accounting Terms and Determination 18
Section 1.03. Other Definitional Terms 18
Section 1.04. Exhibits and Schedules 18
ARTICLE II REVOLVING LOANS 18
Section 2.01. Commitment; Use of Proceeds 18
Section 2.02. Notes; Repayment of Principal 19
Section 2.03. Voluntary Reduction of Revolving Loan 19
ARTICLE III LINE OF CREDIT LOANS; TERM LOANS 19
Section 3.01. Line of Credit Commitment; Use of Proceeds 19
Section 3.02. Notes; Repayment Principal 21
Section 3.03. Voluntary Reduction of Loan Commitments 21
Section 3.04. Term Loans 21
Section 3.05. Repayment of Principal of Term Loans 22
ARTICLE IV GENERAL LOAN TERMS 22
Section 4.01. Funding Notices 22
Section 4.02. Disbursement of Funds 24
Section 4.03. Interest 25
Section 4.04. Interest Periods 27
Section 4.05. Fees 27
Section 4.06. Voluntary Prepayments of Borrowings 28
Section 4.07. Payments, etc. 29
Section 4.08. Interest Rate Not Ascertainable, etc. 30
Section 4.09. Illegality 31
Section 4.10. Increased Costs 31
Section 4.11. Lending Offices 33
Section 4.12. Funding Losses 33
Section 4.13. Assumptions Concerning Funding of Eurodollar
Advances 33
Section 4.14. Apportionment of Payments 34
Section 4.15. Sharing of Payments, Etc. 34
Section 4.16. Capital Adequacy 34
Section 4.17. Benefits to Guarantors 35
Section 4.18. Limitation on Certain Payment Obligations 35
ARTICLE V CONDITIONS TO BORROWINGS 35
Section 5.01. Conditions Precedent to Initial Loans 36
Section 5.02. Conditions to All Loans 38
ARTICLE VI REPRESENTATIONS AND WARRANTIES 39
Section 6.01. Organization and Qualification 39
Section 6.02. Corporate Authority 39
Section 6.03. Financial Statements 39
Section 6.04. Tax Returns 40
Section 6.05. Actions Pending 40
Section 6.06. Representations; No Defaults 40
Section 6.07. Title to Properties 40
Section 6.08. Enforceability of Agreement 41
Section 6.09. Consent 41
Section 6.10. Use of Proceeds; Federal Reserve Regulations 41
Section 6.11. ERISA 41
Section 6.12. Subsidiaries 42
Section 6.13. Outstanding Indebtedness 42
Section 6.14. Conflicting Agreements 42
Section 6.15. Pollution and Other Regulations 43
Section 6.16. Possession of Franchises, Licenses, Etc. 44
Section 6.17. Patents, Etc. 44
Section 6.18. Governmental Consent 44
Section 6.19. Disclosure 44
Section 6.20. Insurance Coverage 45
Section 6.21. Labor Matters 45
Section 6.22. Intercompany Loans; Dividends 45
Section 6.23. Burdensome Restrictions 45
ARTICLE VII AFFIRMATIVE COVENANTS 45
Section 7.01. Corporate Existence, Etc. 46
Section 7.02. Compliance with Laws, Etc. 46
Section 7.03. Payment of Taxes and Claims, Etc. 46
Section 7.04. Keeping of Books 46
Section 7.05. Visitation, Inspection, Etc. 46
Section 7.06. Insurance; Maintenance of Properties 46
Section 7.07. Reporting Covenants 47
Section 7.08. Financial Covenants 50
Section 7.09. Notices Under Certain Other Indebtedness 51
Section 7.10. Additional Guarantors 51
Section 7.11. Financial Statements; Fiscal Year 51
Section 7.12. Ownership of Guarantors 51
ARTICLE VIII NEGATIVE COVENANTS 52
Section 8.01. Indebtedness 52
Section 8.02. Liens 53
Section 8.03. Mergers, Acquisitions, Sales, Etc. 53
Section 8.04. Investments, Loans, Etc. 54
Section 8.05. Sale and Leaseback Transactions 55
Section 8.06. Transactions with Affiliates 55
Section 8.07. Optional Prepayments 55
Section 8.08. Changes in Business 56
Section 8.09. ERISA 56
Section 8.10. Additional Negative Pledges 56
Section 8.11. Limitation on Payment Restrictions
Affecting Consolidated Companies 56
Section 8.12. Actions Under Certain Documents 56
ARTICLE IX EVENTS OF DEFAULT 57
Section 9.01. Payments 57
Section 9.02. Covenants Without Notice 57
Section 9.03. Other Covenants 57
Section 9.04. Representations 57
Section 9.05. Non-Payments of Other Indebtedness 57
Section 9.06. Defaults Under Other Agreements 57
Section 9.07. Bankruptcy 58
Section 9.08. ERISA 58
Section 9.09. Money Judgment 59
Section 9.10. Ownership of Credit Parties and Pledged Entities 59
Section 9.11. Change in Control of Borrower 59
Section 9.12. Default Under Other Credit Documents 59
Section 9.13. Attachments 59
ARTICLE X THE AGENT 60
Section 10.01. Appointment of Agent 60
Section 10.02. Nature of Duties of Agent 60
Section 10.03. Lack of Reliance on the Agent 61
Section 10.04. Certain Rights of the Agent 61
Section 10.05. Reliance by Agent 61
Section 10.06. Indemnification of Agent 61
Section 10.07. The Agent in its Individual Capacity 62
Section 10.08. Holders of Notes 62
Section 10.09. Successor Agent 62
ARTICLE XI MISCELLANEOUS 63
Section 11.01. Notices 63
Section 11.02. Amendments, Etc. 63
Section 11.03. No Waiver; Remedies Cumulative 64
Section 11.04. Payment of Expenses, Etc. 64
Section 11.05. Right of Setoff 65
Section 11.06. Benefit of Agreement 66
Section 11.07. Governing Law; Submission to Jurisdiction 68
Section 11.08. Independent Nature of Lenders' Rights 69
Section 11.09. Counterparts 69
Section 11.10. Effectiveness; Survival 69
Section 11.11. Severability 70
Section 11.12. Independence of Covenants 70
Section 11.13. Change in Accounting Principle
Fiscal Year or Tax Laws 70
Section 11.14. Headings Descriptive; Entire Agreement 70
Section 11.15. Time is of the Essence 70
Section 11.16. Usury 70
Section 11.17. Construction 71
Section 11.18. Effect of Amendment and Restatement 71
SCHEDULES
Schedule 6.01 Organization and Ownership of
Subsidiaries
Schedule 6.04 Tax Filings and Payments
Schedule 6.05 Certain Pending and Threatened
Litigation
Schedule 6.11 Employee Benefit Matters
Schedule 6.14 Conflicting Agreements
Schedule 6.15(a) Environmental Compliance
Schedule 6.15(b) Environmental Notices
Schedule 6.15(c) Environmental Permits
Schedule 6.17 Patent, Trademark, License, and
Other Intellectual Property
Matters
Schedule 6.21 Labor and Employment Matters
Schedule 6.22 Intercompany Loans
Schedule 6.23 Burdensome Restrictions
Schedule 8.01(b) Existing Indebtedness
Schedule 8.02 Existing Liens
EXHIBITS
Exhibit A Form of Syndicate Revolving Credit Note
Exhibit B Form of Competitive Bid Revolving
Credit Note
Exhibit C Form of Syndicate Line of Credit Note
Exhibit D Form of Competitive Bid Line of
Credit Note
Exhibit E Form of Syndicate Term Note
Exhibit F Form of Competitive Bid Term Note
Exhibit G Form of Subsidiary Guaranty Agreement
Exhibit H Form of Closing Certificate
Exhibit I Form of Assignment and Acceptance
Exhibit J Form of Opinion of Borrower's Counsel
Exhibit K Form of Contribution Agreement
AMENDED AND RESTATED
REVOLVING CREDIT AND LINE OF CREDIT AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AND LINE OF CREDIT
AGREEMENT, dated as of August 18, 1997 (the "Agreement") by and among
HUGHES SUPPLY, INC. ("Borrower"), a Florida corporation, SUNTRUST BANK,
CENTRAL FLORIDA, NATIONAL ASSOCIATION, ("SunTrust Bank, Central Florida") a
national banking association, SOUTHTRUST BANK, NATIONAL ASSOCIATION, a na
tional banking association, NATIONSBANK, N.A., a national banking
association, FIRST UNION NATIONAL BANK, a national banking association,
BARNETT BANK, N.A.,, a national banking association, and PNC BANK,
KENTUCKY, INC., a Kentucky banking corporation, (collectively, the
"Lenders" and, individually, a "Lender"), and SUNTRUST BANK, CENTRAL
FLORIDA, NATIONAL ASSOCIATION as Agent for the Lenders (the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders (other than PNC Bank,
Kentucky, Inc. and Barnett Bank, N.A.), SunTrust Bank, Atlanta
individually, as Agent and as Administrative Agent, and SunTrust Bank,
Central Florida as the Agent are parties to that certain Amended and
Restated Revolving Credit and Line of Credit Agreement, dated as of October
10, 1996, as heretofore amended or modified (the "Original Credit
Agreement");
WHEREAS, the Borrower, the Lenders, and the Agent desire to amend
the Original Credit Agreement to reflect certain changes requested by the
Borrower and agreed to by the Lenders, to reflect that PNC Bank, Kentucky,
Inc. and Barnett Bank, N.A. are becoming Lenders and SunTrust Bank, Atlanta
is no longer a Lender, to reflect that the role of Administrative Agent is
being replaced by the role of the Agent and SunTrust Bank, Central Florida
will be the sole Agent, to restate the Original Credit Agreement, as so
amended, in its entirety, in order to remove references to transactions
which have been completed, to set forth in a single agreement all of the
amendments to the Original Credit Agreement (including those effected
hereby), and for convenience of reference;
NOW, THEREFORE, in consideration of the mutual covenants made
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.01. Definitions. As used in this Agreement, and in
any instrument, certificate, document or report delivered pursuant hereto,
the following terms shall have the following meanings (to be equally
applicable to both the singular and plural forms of the term defined):
"Adjusted LIBO Rate" shall mean, with respect to each Interest
Period for a Eurodollar Advance, the rate obtained by dividing (A) LIBOR
for such Interest Period by (B) a percentage equal to 1 minus the then
stated maximum rate (stated as a decimal) of all reserves requirements
(including, without limitation, any marginal, emergency, supplemental,
special or other reserves) applicable to any member bank of the Federal
Reserve System in respect of Eurodollar liabilities as defined in
Regulation D (or against any successor category of liabilities as defined
in Regulation D).
"Advance" shall mean any principal amount advanced and remaining
outstanding at any time under the Revolving Loans, the Line of Credit
Loans, or the Term Loans which Advance shall be made or outstanding as a
Base Rate Advance or Eurodollar Advance, as the case may be.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by", and "under
common control with") as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of that Person.
"Agent" shall mean SunTrust Bank, Central Florida, a national
banking association, as agent for the Lenders hereunder and under the other
Credit Documents, and each successor Agent.
"Agreement" shall mean this Amended and Restated Revolving Credit
and Line of Credit Agreement, either as originally executed or as it may be
from time to time supplemented, amended, restated, renewed or extended and
in effect.
"Applicable Commitment Fee Percentage" shall mean the percentage
designated below based on Borrower's Senior Funded Debt to Total Capital
ratio for each fiscal quarter-end as indicated below:
Senior Funded Debt to Applicable Commitment Fee
Total Capital Percentage
55% or Greater 0.25%
Less than 55% to 50% 0.25%
Less than 50% to 30% 0.225%
Less than 30% 0.1875%
provided, however, that:
(a) The Applicable Commitment Fee Percentage in effect as
of the date of execution and delivery of this Agreement shall be
0.225% and shall remain in effect until such time as the
Applicable Commitment Fee Percentage may be adjusted as
hereinafter provided; and
(b) So long as no Default or Event of Default has occurred
and is continuing under this Agreement, adjustments, if any, to
the Applicable Commitment Fee Percentage based on changes in the
ratios set forth above shall be made and become effective on the
first day of the second fiscal quarter after such determination.
"Applicable Margin" shall mean the percentage designated below
based on Borrower's Senior Funded Debt to Total Capital ratio for each
fiscal quarter-end as indicated below:
Senior Funded Debt to Applicable Margin
Total Capital
55% or Greater 1.00%
Less than 55% to 50% 0.75%
Less than 50% to 30% 0.50%
Less than 30% 0.375%
provided, however, that:
(a) The Applicable Margin in effect as of the date of
execution and delivery of this Agreement shall be .50% and shall
remain in effect until such time as the Applicable Margin may be
adjusted as hereinafter provided; and
(b) So long as no Default or Event of Default has occurred
and is continuing under this Agreement, adjustments, if any, to
the Applicable Margin based on changes in the ratios set forth
above shall be made and become effective on the first day of the
second fiscal quarter after such determination.
"Asbestos Laws" means the common law in all federal, state and
local and foreign jurisdictions and other laws in such jurisdictions, and
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, now or hereafter in effect
relating to or concerning asbestos or asbestos-containing material,
including without limitation, exposure to asbestos or asbestos-containing
material.
"Asset Value" shall mean, with respect to any property or asset
of any Consolidated Company as of any particular date, an amount equal to
the greater of (i) the then book value of such property or asset as estab
lished in accordance with GAAP, and (ii) the then fair market value of such
property or asset as determined in good faith by the board of directors of
such Consolidated Company.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an Eligible Assignee in accordance
with the terms of this Agreement and substantially in the form of
Exhibit I.
"Bankruptcy Code" shall mean The Bankruptcy Code of 1978, as
amended and in effect from time to time (11 U.S.C. 101 et seq.).
"Base Rate" shall mean (with any change in the Base Rate to be
effective as of the date of change of either of the following rates), with
respect to the Revolving Loans, Line of Credit Loans and Term Loans, the
higher of (a) the rate which the Agent designates from time to time to be
its prime lending rate, as in effect from time to time, and (b) the Federal
Funds Rate, as in effect from time to time, plus one-half of one percent
(0.50%) per annum. The Agent's prime lending rate is a reference rate and
does not necessarily represent the lowest or best rate charged to
customers; the Agent may make commercial loans or other loans at rates of
interest at, above or below the Agent's prime lending rate.
"Base Rate Advance" shall mean an Advance made or outstanding as
a Revolving Loan, Line of Credit Loan or Term Loan, as the case may be,
bearing interest based on the Base Rate.
"Base Rate Loan" shall mean any Loan hereunder which bears
interest at the Base Rate.
"Borrowing" shall mean the incurrence by Borrower under any
Facility of Advances of one Type concurrently having the same Interest
Period or the continuation or conversion of an existing Borrowing or
Borrowings in whole or in part.
"Business Day" shall mean, with respect to Eurodollar Loans, any
day other than a day on which commercial banks are closed or required to be
closed for domestic and international business, including dealings in
Dollar deposits on the London interbank market, and with respect to all
other Loans and matters, any day other than Saturday, Sunday and a day on
which commercial banks are required to be closed for business in Atlanta,
Georgia, or Orlando, Florida.
"Capitalized Lease Obligations" shall mean all lease obligations
which have been or are required to be, in accordance with generally
accepted accounting principles, capitalized on the books of the lessee.
"Cash Flow Coverage Ratio" shall mean, as at the end of any
fiscal period of Borrower, the ratio of (A) the sum of Consolidated Net
Income plus, to the extent deducted in determining such Consolidated Net
Income, depreciation expense and amortization expense minus the change in
Working Capital to (B) the sum of Net Capital Expenditures, dividends, and
current maturities of long term debt.
"CERCLA" has the meaning set forth in Section 6.15(a) of this
Agreement.
"Change in Control Provision" shall mean any term or provision
contained in any indenture, debenture, note, or other agreement or document
evidencing or governing Indebtedness of Borrower evidencing debt or a
commitment to extend loans in excess of $5,000,000 which requires, or
permits the holder(s) of such Indebtedness of Borrower to require that such
Indebtedness of Borrower be redeemed, repurchased, defeased, prepaid or
repaid, either in whole or in part, or the maturity of such Indebtedness of
Borrower to be accelerated in any respect, as a result of a change in
ownership of the capital stock of Borrower or voting rights with respect
thereto.
"Closing Date" shall mean the date on or before August 18, 1997,
on which the initial Loans are made and the conditions set forth in Section
5.01 are satisfied or waived in accordance with Section 11.02.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Commitment" shall mean, for any Lender at any time, any of its
Revolving Loan Commitment or Line of Credit Commitment, as the case may be.
"Competitive Bid Line of Credit Loan" shall mean a Line of Credit
Loan made by a Lender on a competitive bid basis as provided in Article IV.
"Competitive Bid Line of Credit Note" shall mean a promissory
note evidencing Competitive Bid Line of Credit Loans in the form attached
hereto as Exhibit D.
"Competitive Bid Loans" shall mean, collectively, Competitive Bid
Revolving Loans, Competitive Bid Line of Credit Loans, and Competitive Bid
Term Loans.
"Competitive Bid Rate" shall mean the interest rate charged by a
Lender on a Competitive Bid Line of Credit Loan or a Competitive Bid
Revolving Loan.
"Competitive Bid Revolving Credit Note" shall mean a promissory
note evidencing Competitive Bid Revolving Loans in the form attached hereto
as Exhibit B.
"Competitive Bid Revolving Loan" shall mean a Revolving Loan made
by a Lender on a competitive bid basis as provided in Article IV.
"Competitive Bid Term Loan" shall mean a Term Loan made by a
Lender on a competitive bid basis as provided in Article IV.
"Competitive Bid Term Note" shall mean a promissory note
evidencing Competitive Bid Term Loans in the form attached hereto as
Exhibit F.
"Consolidated Companies" shall mean, collectively, Borrower and
all of its Subsidiaries.
"Consolidated EBITR" shall mean, for any fiscal period of the
Borrower, an amount equal to (A) the sum of its Consolidated Net Income
(Loss), plus, to the extent deducted in determining Consolidated Net Income
(Loss), (i) provisions for taxes based on income, (ii) Consolidated
Interest Expense, and (iii) Consolidated Rental Expense.
"Consolidated Interest Expense" shall mean, for any fiscal period
of Borrower, total interest expense (including without limitation, interest
expense attributable to capitalized leases in accordance with the generally
accepted accounting principles and any program costs incurred by Borrower
in connection with sales of accounts receivable pursuant to a
securitization program) of Borrower and its subsidiaries on a consolidated
basis.
"Consolidated Net Income (Loss)" shall mean, for any fiscal
period of Borrower, the net income (or loss) of Borrower and it
subsidiaries on a consolidated basis for such period (taken as a single
accounting period) determined in conformity with generally accepted
accounting principles; provided that there shall be excluded therefrom (i)
any items of gain or loss which were included in determining such
consolidated net income and were not realized in the ordinary course of
business or the result of a sale of assets other than in the ordinary
course of business; and (ii) the income (or loss) of any party accrued
prior to the date such becomes a subsidiary of Borrower or is merged into
or consolidated with Borrower or any of its subsidiaries, or such party's
assets are required by the Borrower or any of its subsidiaries.
"Consolidated Net Worth" shall mean as of the date of
determination, the Borrower's total shareholder's equity as determined in
accordance with generally accepted accounting principles.
"Consolidated Rental Expense" shall mean for any fiscal period of
Borrower, total operating lease expense of Borrower and its subsidiaries on
a consolidated basis.
"Consolidated Subsidiary" shall mean, as at any particular time,
any corporation included as a consolidated Subsidiary of Borrower in
Borrower's most recent financial statements furnished to its stockholders
and certified by Borrower's independent public accountants, provided that
under then generally accepted accounting principles approved by such
independent public accountants, such corporation may continue to be so
included as a consolidated Subsidiary of Borrower in any financial
statements thereafter certified by such accountants.
"Contractual Obligation" of any Person shall mean any provision
of any security issued by such Person or of any agreement, instrument or
undertaking under which such Person is obligated or by which it or any of
the property owned by it is bound.
"Conversion Date" shall mean, with respect to a Line of Credit
Loan, the date on which such Line of Credit Loan shall come due within the
period (a) 90 days prior to the termination of the Line of Credit
Commitment, and (b) the termination date of the Line of Credit Commitment,
which termination date is initially 364 days after the Closing Date, but
which is subject to extension pursuant to the terms of this Agreement.
Line of Credit Loans shall be paid, renewed or converted to Term Loans on a
Conversion Date.
"Credit Documents" shall mean, collectively, this Agreement, the
Notes, the Guaranty Agreements, and all other Guaranty Documents, if any.
"Credit Parties" shall mean, collectively, each of Borrower, the
Guarantors, and every other Person who from time to time executes a Credit
Document with respect to all or any portion of the Obligations.
"Default" shall mean any condition or event which, with notice or
lapse of time or both, would constitute an Event of Default.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful
money of the United States of America.
"Eligible Assignee" shall mean (i) a commercial bank organized
under the laws of the United States, or any state thereof, having total
assets in excess of $1,000,000,000 or any commercial finance or asset based
lending Affiliate of any such commercial bank and (ii) any Lender or any
Affiliate of any Lender.
"Environmental Laws" shall mean all federal, state, local and
foreign statutes and codes or regulations, rules or ordinances issued,
promulgated, or approved thereunder, now or hereafter in effect (including,
without limitation, those with respect to asbestos or asbestos containing
material or exposure to asbestos or asbestos containing material), relating
to pollution or protection of the environment and relating to public health
and safety, relating to (i) emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial toxic or
hazardous constituents, substances or wastes, including without limitation,
any Hazardous Substance, petroleum including crude oil or any fraction
thereof, any petroleum product or other waste, chemicals or substances
regulated by any Environmental Law into the environment (including without
limitation, ambient air, surface water, ground water, land surface or
subsurface strata), or (ii) the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport or handling of any
Hazardous Substance, petroleum including crude oil or any fraction thereof,
any petroleum product or other waste, chemicals or substances regulated by
any Environmental Law, and (iii) underground storage tanks and related
piping, and emissions, discharges and releases or threatened releases
therefrom, such Environmental Laws to include, without limitation (i) the
Clean Air Act (42 U.S.C. 7401 et seq.), (ii) the Clean Water Act (33
U.S.C. 1251 et seq.), (iii) the Resource Conservation and Recovery Act
(42 U.S.C. 6901 et seq.), (iv) the Toxic Substances Control Act (15
U.S.C. 2601 et seq.) and (v) the Comprehensive Environmental Response
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act (42 U.S.C. 9601 et seq.).
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended and in effect from time to time.
"ERISA Affiliate" shall mean, with respect to any Person, each
trade or business (whether or not incorporated) which is a member of a
group of which that Person is a member and which is under common control
within the meaning of the regulations promulgated under Section 414 of the
Tax Code.
"Eurodollar Advance" shall mean an Advance made or outstanding as
a Revolving Loan, a Line of Credit Loan, or a Term Loan, as the case may
be, bearing interest based on the Adjusted LIBO Rate.
"Eurodollar Loan" shall mean any Loan hereunder which bears
interest based on the Adjusted LIBO Rate.
"Event of Default" shall have the meaning set forth in Article
IX.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute thereto.
"Executive Officer" shall mean with respect to any Person (other
than a Guarantor), the President, Vice Presidents, Chief Financial Officer,
Treasurer, Secretary and any Person holding comparable offices or duties,
and with respect to a Guarantor, the President.
"Extension of Credit" shall mean the making of a Loan or the
conversion of a Loan of one Type into a Loan of another Type.
"Facility" or "Facilities" shall mean the Revolving Loan
Commitments and Revolving Loans, the Line of Credit Commitment and Line of
Credit Loans, or the Term Loans as the context may indicate.
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions with
member banks of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of
Atlanta, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"Final Maturity Date" shall mean the date on which all
commitments have been terminated and all amounts outstanding under this
Agreement have been declared or have automatically become due and payable
pursuant to the provisions of Article IX.
"Fixed Charge Coverage Ratio" shall mean, as at the end of any
fiscal year period of Borrower, the ratio of (A) Consolidated EBITR to (B)
the sum of (i) Consolidated Interest Expense plus (ii) Consolidated Rental
Expense.
"Funded Debt" shall mean all indebtedness for money borrowed,
purchase money mortgages, capitalized leases, amounts of any outstanding
accounts receivable sold pursuant to a securitization program, conditional
sales contracts and similar retention debt instruments, including any
current maturities of such indebtedness, which by its terms matures more
than one year from the date of any calculation thereof and/or which is
renewable or extendable at the option of the obligor to a date beyond one
year from such date. The calculation of Funded Debt shall include all
Funded Debt of the Borrower and its Subsidiaries, plus all Funded Debt of
other entities or persons, other than Subsidiaries, which has been
guaranteed by the Borrower or any Subsidiary or which is supported by a
letter of credit issued for the account of the Borrower or any Subsidiary.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as may be approved by a significant
segment of the accounting profession, which are applicable to the
circumstances as of the date of determination.
"Guaranteed Indebtedness" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease, dividend,
or other obligation ("primary obligation") of any other Person (the
"primary obligor") in any manner including, without limitation, any
obligation or arrangement of such Person (a) to purchase or repurchase any
such primary obligation, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation,
or (d) to indemnify the owner of such primary obligation against loss in
respect thereof.
"Guarantors" shall mean, collectively, each Subsidiary of the
Borrower that has executed a Guaranty Agreement as of the Closing Date,
together with all other Material Subsidiaries that hereafter execute a
Guaranty Agreement, and their respective successors and permitted assigns.
"Guaranty Agreements" shall mean, collectively, the Guaranty
Agreement executed by each of the Guarantors in favor of the Lenders and
the Agent, substantially in the form of Exhibit G as the same may be
amended, restated or supplemented from time to time, and the Contribution
Agreement executed by each of the Guarantors, substantially in the form of
Exhibit K as the same may be amended, restated or supplemented from time to
time.
"Guaranty Documents" shall mean, collectively, the Guaranty
Agreements, and each other guaranty agreement, mortgage, deed of trust,
security agreement, pledge agreement, or other security or collateral
document guaranteeing or securing the Obligations, as the same may be
amended, restated, or supplemented from time to time, and the Contribution
Agreements executed by each of the Guarantors, as the same may be amended,
restated or supplemented from time to time.
"Hazardous Materials" shall mean oil, petroleum or chemical
liquids or solids, liquid or gaseous products, asbestos, or any other
hazardous waste or hazardous substances, including, without limitation,
hazardous medical waste or any other substance described in any Hazardous
Materials Law.
"Hazardous Materials Law" shall mean the Comprehensive Envi
ronmental Response Compensation and Liability Act as amended by the Super
Fund Amendments and Reauthorization Act, 42 U.S.C. 9601, the Resource
Conservation and Recovery Act, 42 U.S.C. 6901, the state hazardous waste
laws, as such laws may from time to time be in effect, and related
regulations, and all similar laws and regulations.
"Hazardous Substances" has the meaning assigned to that term in
CERCLA.
"Hughes Family" shall mean (i) David H. Hughes, Vincent S.
Hughes, Russell S. Hughes, (ii) any of their direct family members
(including, without limitation, lineal ancestors and descendants, siblings,
and lineal descendants of siblings), (iii) any trusts and profit sharing
plans and stock option plans established for the sole benefit of the
foregoing, and (iv) the heirs and personal representatives of the
foregoing.
"Indebtedness" of any Person shall mean, without duplication (i)
all obligations of such Person which in accordance with GAAP would be shown
on the balance sheet of such Person as a liability (including, without
limitation, obligations for borrowed money and for the deferred purchase
price of property or services, and obligations evidenced by bonds,
debentures, notes or other similar instruments); (ii) all rental
obligations under leases required to be capitalized under GAAP; (iii) all
Guaranteed Indebtedness of such Person (including contingent reimbursement
obligations under undrawn letters of credit); (iv) Indebtedness of others
secured by any Lien upon property owned by such Person, whether or not
assumed; and (v) obligations or other liabilities under currency contracts,
interest rate hedging contracts, or similar agreements or combinations
thereof.
"Intercompany Loan Documents" shall mean, collectively, the
promissory notes and all related loan, subordination, and other agreements,
to the extent that they exist, relating in any manner to the Intercompany
Loans.
"Intercompany Loans" shall mean, collectively, (i) the loans more
particularly described on Schedule 6.22 and (ii) those loans or other
extensions of credit made by any Consolidated Company to another
Consolidated Company satisfying the terms and conditions set forth in
Section 8.01 or as may otherwise be approved in writing by the Agent and
the Required Lenders.
"Interest Period" shall mean (i) with respect to Competitive Rate
Loans, such periods agreed upon between Borrower and Lenders, and (ii) with
respect to LIBOR Advances, the period of 1, 2, 3 or 6 months selected by
the Borrower, in case of clause (ii) pursuant to the terms of the credit
facility and subject to customary adjustments in duration; provided, that
(a) the first day of an Interest Period must be a Business Day, (b) any
Interest Period that would otherwise end on a day that is not a Business
Day for Eurodollar Loans shall be extended to the next succeeding Business
Day for Eurodollar Loans, unless such Business Day falls in the next
calendar month, in which case the Interest Period shall end on the next
preceding Business Day for Eurodollar Loans, and (c) Borrower may not elect
an Interest Period for Line of Credit Loans that would extend beyond the
Line of Credit Maturity Date or an Interest Period for Revolving Loans or
Term Loans that would extend beyond the Final Maturity Date.
"Investment" shall mean, when used with respect to any Person,
any direct or indirect advance, loan or other extension of credit (other
than the creation of receivables in the ordinary course of business) or
capital contribution by such Person (by means of transfers of property to
others or payments for property or services for the account or use of
others, or otherwise) to any Person, or any direct or indirect purchase or
other acquisition by such Person of, or of a beneficial interest in,
capital stock, partnership interests, bonds, notes, debentures or other
securities issued by any other Person.
"Lender" or "Lenders" shall mean the banks and lending
institutions listed on the signature pages hereof, and each assignee
thereof, if any, pursuant to Section 11.06.
"Lending Installation" shall mean any office, branch, subsidiary
or affiliate of any Lender.
"Lending Office" shall mean for each Lender the office such
Lender may designate in writing from time to time to Borrower and the Agent
with respect to each Type of Loan.
"Leverage Ratio" shall mean the ratio, expressed as a percentage,
of Senior Funded Debt to Total Capital for the Consolidated Companies.
"LIBOR" shall mean, for any Interest Period, the offered rates
for deposits in U.S. dollars for a period comparable to the Interest Period
appearing on the Reuters Screen LIBOR Page as of 11:00 a.m., London time,
on the day that is two London banking days prior to the first day of the
Interest Period. If at least two such rates appear on the Reuters Screen
LIBOR Page, the rate for that Interest Period will be the arithmetic mean
of such rates, rounded, if necessary, to the next higher 1/16 of 1.0%; and
in either case as such rates may be adjusted for any applicable reserve
requirements. If the foregoing rate is unavailable from the Reuters Screen
for any reason, then such rate shall be determined by the Agent from
Telerate Page 3750 or, if such rate is also unavailable on such service,
then on any other interest rate reporting service of recognized standing
designated in writing by the Agent to Borrower and the Lenders; in any such
case rounded, if necessary, to the next higher 1/16 of 1.0%, if the rate is
not such a multiple.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind or description and shall include,
without limitation, any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any capitalized lease
in the nature thereof including any lease or similar arrangement with a
public authority executed in connection with the issuance of industrial
development revenue bonds or pollution control revenue bonds, and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction.
"Line of Credit Commitment" shall mean at any time for any
Lender, the amount of such commitment set forth opposite such Lender's name
on the signature pages hereof or on any assignment hereafter executed by
any assignee of a Lender pursuant to Section 11.06, as the same may be
increased or decreased from time to time as a result of any reduction
thereof pursuant to Section 3.03, any assignment thereof pursuant to
Section 11.06, or any amendment thereof pursuant to Section 11.02.
"Line of Credit Commitment Period" shall have the meaning as
defined in Section 3.01(a).
"Line of Credit Loans" shall mean advances and Loans made under
the Line of Credit Commitment.
"Line of Credit Maturity Date" shall have the meaning as defined
in Section 3.01(a).
"Line of Credit Notes" shall mean, collectively, the Syndicate
Line of Credit Notes and the Competitive Bid Line of Credit Notes.
"Loans" shall mean, collectively, the Revolving Loans, the Line
of Credit Loans and the Term Loans.
"Margin Regulations" shall mean Regulation G, Regulation T,
Regulation U and Regulation X of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time.
"Materially Adverse Effect" shall mean the occurrence of an
event, which would (i) cause the recognition of a liability, as required by
Statement of Financial Accounting Standards No. 5, in the current quarter
financial statements in the amount of $5,000,000 or more, or (ii) cause an
auditor to have a substantial doubt about the ability of Borrower to
continue as a going concern after consideration of management's plans as
described in Statement of Auditing Standards, No. 59.
"Material Subsidiary" shall mean each Subsidiary of Borrower, now
existing or hereinafter established or acquired, that at any time prior to
the Final Maturity Date, has or acquires total assets in excess of
$1,000,000 or that accounted for or produced more than 5% of the
Consolidated EBITR of Borrower on a consolidated basis during any of the
three most recently completed fiscal years of Borrower.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Capital Expenditures" shall mean capital expenditures less
the proceeds of sales of property, plant, and equipment.
"Net Proceeds" shall mean, with respect to any asset sale, all
cash, including (i) cash proceeds collected pursuant to a promissory note,
a receivable or otherwise (other than interest payable thereon), and (ii)
with respect to asset sales resulting from the loss, damage, destruction or
taking of property, the proceeds of insurance settlements and condemnation
awards (other than the portion of the proceeds of such settlements and such
awards that are used to repair, replace, improve or restore the item of
property in respect of which such settlement or award was paid provided
that the recipient of such proceeds enters into a binding contractual
obligation to effect such repair, replacement, improvement or restoration
within six (6) months of such loss, damage or destruction and completes
such repair, replacement, improvement or restoration within twelve (12)
months of such loss, damage, destruction or taking) as and when received in
cash, in either case, received by any Consolidated Company as a result of
or in connection with such transaction, net of reasonable sale expenses,
fees and commissions incurred, and taxes paid or expected to be payable
within the succeeding 12-month period in connection therewith, and net of
any payment required to be made with respect to the outstanding principal
amount of, premium or penalty, if any, and interest on any Indebtedness
(other than the Loans) secured by a Lien (to the extent permitted by
Section 8.02) upon the asset sold in such asset sale.
"Note" shall mean any of the Revolving Credit Notes, Line of
Credit Notes or the Term Notes either as originally executed or as the same
may be from time to time supplemented, modified, amended, renewed or
extended.
"Notice of Borrowing" shall have the meaning provided in
Section 4.01.
"Notice of Continuation/Conversion" shall have the meaning
provided in Section 4.01.
"Obligations" shall mean all amounts owing to the Agent or any
Lender pursuant to the terms of this Agreement or any other Credit
Document, including without limitation, all Loans (including all principal
and interest payments due thereunder), fees, expenses, indemnification and
reimbursement payments, indebtedness, liabilities, and obligations of the
Credit Parties, direct or indirect, absolute or contingent, liquidated or
unliquidated, now existing or hereafter arising, together with all renew
als, extensions, modifications or refinancings thereof.
"Payment Office" shall mean, for any Lender, the "Payment Office"
listed on its signature page to this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, and
any successor thereto.
"Permitted Liens" shall mean those Liens expressly permitted by
Section 8.02.
"Person" shall mean and shall include an individual, a part
nership, a joint venture, a corporation, a trust, an unincorporated
association, a government or any department or agency thereof and any other
entity whatsoever.
"Plan" shall mean any employee benefit plan, program, ar
rangement, practice or contract, maintained by or on behalf of the Borrower
or an ERISA Affiliate, which provides benefits or compensation to or on
behalf of employees or former employees, whether formal or informal,
whether or not written, including but not limited to the following types of
plans:
(i) Executive Arrangements - any bonus, incentive
compensation, stock option, deferred compensation, commission, sever
ance, "golden parachute", "rabbi trust", or other executive
compensation plan, program, contract, arrangement or practice;
(ii) ERISA Plans - any "employee benefit plan" as
defined in Section 3(3) of ERISA), including, but not limited to, any
defined benefit pension plan, profit sharing plan, money purchase
pension plan, savings or thrift plan, stock bonus plan, employee stock
ownership plan, Multiemployer Plan, or any plan, fund, program,
arrangement or practice providing for medical (including post-
retirement medical), hospitalization, accident, sickness, disability,
or life insurance benefits;
(iii) Other Employee Fringe Benefits - any stock
purchase, vacation, scholarship, day care, prepaid legal services,
severance pay or other fringe benefit plan, program, arrangement,
contract or practice.
"Pro Rata Share" shall mean, with respect to each of the
Commitments of each Lender and each Loan to be made by and each payment
(including, without limitation, any payment of principal, interest or fees)
to be made to each Lender, the percentage designated as such Lender's Pro
Rata Share of such Commitments, such Loans or such payments, as applicable,
set forth under the name of such Lender on the respective signature page
for such Lender or in any assignment hereafter executed by an assignee of a
Lender pursuant to Section 11.06, in each case as such Pro Rata Share may
change from time to time as a result of assignments or amendments made
pursuant to this Agreement.
"Regulation D" shall mean Regulation D of the Board of Governors
of the Federal Reserve System, as the same may be in effect from time to
time.
"Required Lenders" shall mean, at any time, Lenders holding at
least sixty-six and two-thirds percent (66 _%) of the then aggregate amount
of the Revolving Loan Commitments, the Line of Credit Commitments and
aggregate outstanding Loans.
"Requirement of Law" for any Person shall mean the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation, or determination of an arbitrator or a court or other
governmental authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Reuters Screen" shall mean, when used in connection with any
designated page and LIBOR, the display page so designated on the Reuter
Monitor Money Rates Service (or such other page as may replace that page on
that service for the purpose of displaying rates comparable to LIBOR).
"Revolving Credit Note" shall mean, collectively, the Syndicate
Revolving Credit Notes and the Competitive Bid Revolving Credit Notes.
"Revolving Loan Commitment" shall mean, at any time for any
Lender, the amount of such commitment set forth opposite such Lender's name
on the signature pages hereof or in any assignment executed by an assignee
of a Lender pursuant to Section 11.06, as the same may be increased or
decreased from time to time as a result of any reduction thereof pursuant
to Section 2.03, any assignment thereof pursuant to Section 11.06, or any
amendment thereof pursuant to Section 11.02.
"Revolving Loans" shall mean, collectively, the revolving credit
loans made to Borrower by the Lenders pursuant to Section 2.01.
"Senior Funded Debt" shall mean an amount equal to Funded Debt
less Subordinated Debt.
"Shareholders' Equity" shall mean, with respect to any Person as
at any date of determination, shareholders' equity of such Person,
determined on a consolidated basis in conformity with GAAP.
"Subordinated Debt" shall mean all Indebtedness of Borrower and
its Subsidiaries subordinated to all obligations of Borrower and its
Subsidiaries or any other Credit Party arising under this Agreement, the
Notes and the Guaranty Agreements on terms and conditions satisfactory in
all respects to the Agent and the Required Lenders, including without
limitation, with respect to interest rates, payment terms, maturities,
amortization schedules, covenants, defaults, remedies, and subordination
provisions, as evidenced by the written approval of the Agent and Required
Lenders.
"Subsidiary" shall mean, with respect to any Person, any
corporation or other entity (including, without limitation, partnerships,
joint ventures, and associations) regardless of its jurisdiction of
organization or formation, at least a majority of the total combined voting
power of all classes of voting stock or other ownership interests of which
shall, at the time as of which any determination is being made, be owned by
such Person, either directly or indirectly through one or more other
Subsidiaries.
"Syndicate Line of Credit Loan" shall mean, collectively, the
Line of Credit Loans made to Borrower hereunder other than Competitive Bid
Line of Credit Loans.
"Syndicate Line of Credit Note" shall mean a promissory note
evidencing Syndicate Line of Credit Loans in the form attached hereto as
Exhibit C.
"Syndicate Loans" shall mean, collectively, the Syndicate
Revolving Loans, the Syndicate Line of Credit Loans, and the Syndicate Term
Loans.
"Syndicate Revolving Credit Note" shall mean a promissory note
evidencing Syndicate Revolving Loans in the form attached hereto as Exhibit
A.
"Syndicate Revolving Loan" shall mean, collectively, the
Revolving Loans made to Borrower hereunder other than Competitive Bid
Revolving Loans.
"Syndicate Term Loans" shall mean, collectively, the Term Loans
made to Borrower hereunder other than the Competitive Bid Term Loans.
"Syndicate Term Note" shall mean a promissory note evidencing
Syndicate Term Loans in the form attached hereto as Exhibit E
"Tax Code" shall mean the Internal Revenue Code of 1986, as
amended and in effect from time to time.
"Taxes" shall mean any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other charges of
whatever nature, including without limitation, income, receipts, excise,
property, sales, transfer, license, payroll, withholding, social security
and franchise taxes now or hereafter imposed or levied by the United
States, or any state, local or foreign government or by any department,
agency or other political subdivision or taxing authority thereof or
therein and all interest, penalties, additions to tax and similar
liabilities with respect thereto.
"Telerate" shall mean, when used in connection with any
designated page and the "Certificate of Deposit Rate" or "LIBOR," the
display page so designated on the Dow Jones Telerate Service (or such other
page as may replace that page on that service for the purpose of displaying
rates comparable to the "Certificate of Deposit Rate" or "LIBOR").
"Termination Date" shall mean August 17, 2000.
"Term Loans" shall mean, collectively, the Syndicate Term Loans
and the Competitive Bid Term Loans made to Borrower by the Lenders on the
respective Conversion Dates pursuant to Section 3.04.
"Term Note" shall mean, collectively, the Syndicate Term Notes
and the Competitive Bid Term Notes.
"Total Capital" shall mean the sum of Funded Debt and Con
solidated Net Worth.
"Total Commitment" shall mean the sum of the Lenders' Commitments
as such Total Commitment may be reduced by voluntary reduction, prepayment
or nonrenewal of a Lender's Commitment as provided herein.
"Type" of Borrowing shall mean a Borrowing consisting of Base
Rate Advances or Eurodollar Advances, and any Advances made pursuant to the
Competitive Bid Facility.
"Wholly Owned Subsidiary" shall mean any Subsidiary, all the
stock or ownership interest of every class of which, except directors'
qualifying shares, shall, at the time as of which any determination is
being made, be owned by Borrower either directly or indirectly.
"Working Capital" shall mean, as the date of any determination
for Borrower and its subsidiaries (A) current assets, as determined in
accordance with generally accepted accounting principles, excluding cash
minus (b) current liabilities, as determined in accordance with generally
accepted accounting principles excluding the current portion of Funded
Debt, in each case determined on a consolidated basis.
Section 1.02. Accounting Terms and Determination. Unless
otherwise defined or specified herein, all accounting terms shall be
construed herein, all accounting determinations hereunder shall be made,
all financial statements required to be delivered hereunder shall be
prepared, and all financial records shall be maintained in accordance with,
GAAP.
Section 1.03. Other Definitional Terms. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Article, Section, Schedule,
Exhibit and like references are to this Agreement unless otherwise
specified.
Section 1.04. Exhibits and Schedules. All Exhibits and
Schedules attached hereto are by reference made a part hereof.
ARTICLE II
REVOLVING LOANS
Section 2.01. Revolving Loan Commitments; Use of Proceeds.
(a) Subject to and upon the terms and conditions herein set
forth, each Lender severally agrees to make to Borrower from time to time
on and after the Closing Date, but prior to the Termination Date, Revolving
Loans in an aggregate amount outstanding at any time not to exceed such
Lender's Revolving Loan Commitment. Borrower shall be entitled to repay
and reborrow Revolving Loans in accordance with the provisions hereof.
(b) Each Revolving Loan shall, at the option of Borrower, be
made or continued as, or converted into, part of one or more Borrowings
that shall consist entirely of Syndicate Revolving Loans (comprised of Base
Rate Advances or Eurodollar Advances) or Competitive Bid Revolving Loans.
The aggregate principal amount of each Borrowing of Revolving Loans shall
be not less than $2,000,000 or a greater integral multiple of $100,000,
provided that each Borrowing of Revolving Loans comprised of Base Rate Ad
vances shall be not less than $250,000 or a greater integral multiple of
$10,000. At no time shall the number of Borrowings outstanding under this
Article II exceed six; provided that, for the purpose of determining the
number of Borrowings outstanding and the minimum amount for Borrowings
resulting from conversions or continuations, all Borrowings of Base Rate
Advances under this Facility shall be considered as one Borrowing. The
parties hereto agree that (i) the aggregate principal balance of the
Revolving Loans (including the Competitive Bid Revolving Loans) of the
Lenders as a group shall not exceed the aggregate principal amount of all
Revolving Loan Commitments, (ii) no Lender shall be obligated to make
Syndicate Revolving Loans in excess of the Revolving Loan Commitment of
such Lender, (iii) no Lender shall be obligated hereunder to extend
Competitive Bid Revolving Loans or to make quotes for such Loans, (iv) a
Lender may elect, in its discretion, to extend Competitive Bid Revolving
Loans which, either alone or together with the Syndicate Revolving Loans of
such Lender, exceed the Revolving Loan Commitment of such Lender and (v)
the Competitive Bid Revolving Loans (if any) extended by a Lender shall
reduce the Revolving Loan Commitment of such Lender by the amount of such
Competitive Bid Revolving Loans so extended (but not below zero).
(c) The proceeds of Revolving Loans shall be used solely to
refinance existing indebtedness, to fund obligations under share repurchase
agreements, to fund the working capital needs of the Borrower and its
Subsidiaries, and for general corporate purposes.
Section 2.02. Notes; Repayment of Principal.
(a) Borrower's obligations to pay the principal of, and interest
on, the Syndicate Revolving Loans and the Competitive Bid Revolving Loans
to each Lender shall be evidenced by the records of the Agent and such
Lender and by the Syndicate Revolving Credit Note and the Competitive Bid
Revolving Credit Note, respectively, payable to such Lender (or the
assignor of such Lender) completed in conformity with this Agreement.
(b) All outstanding principal amounts under the Revolving Loans
shall be due and payable in full on the Termination Date.
Section 2.03. Voluntary Reduction of Revolving Loan Commitments.
Upon at least three (3) Business Days' prior telephonic notice (promptly
confirmed in writing) to the Agent, Borrower shall have the right, without
premium or penalty, to terminate the Revolving Loan Commitments, in part or
in whole, provided that (i) any such termination shall apply to
proportionately and permanently reduce the Revolving Loan Commitments of
each of the Lenders, (ii) any partial termination pursuant to this Section
2.03 shall be in an amount of at least $1,000,000 and integral multiples of
$100,000, and (iii) no such reduction shall be permitted if prohibited or
without payment of all costs required to be paid hereunder with respect to
a prepayment. If the aggregate outstanding amount of the Revolving Loans
exceeds the amount of the Revolving Loan Commitments as so reduced,
Borrower shall immediately repay the Revolving Loans by an amount equal to
such excess, together with all accrued but unpaid interest on such excess
amount and any amounts due under Section 4.12 hereof.
ARTICLE III
LINE OF CREDIT LOANS
Section 3.01. Line of Credit Commitment; Use of Proceeds.
(a) Subject to and upon the terms and conditions herein set
forth, each Lender severally agrees to make to Borrower from time to time
on and after the Closing Date, but prior to August 18, 1998 (the "Line of
Credit Maturity Date"), Line of Credit Loans in an aggregate amount
outstanding at any time not to exceed such Lender's Line of Credit
Commitment. The period between the Closing Date and the Line of Credit
Maturity Date shall be called the "Line of Credit Commitment Period."
Borrower may, on and before two hundred ten (210) days prior to the Line of
Credit Maturity Date, as it may from time to time exist, request in writing
an extension of the Line of Credit Maturity Date and Line of Credit
Commitment Period. The Lenders may, in the exercise of their sole
discretion, extend the Line of Credit Commitment Period and the Line of
Credit Maturity Date for an additional one hundred eighty (180) days. The
Lender shall notify the Borrower in writing of such election no later than
one hundred eighty (180) days prior to the Line of Credit Maturity Date.
In the event a Lender elects not to extend the Line of Credit Commitment
Period, the Total Commitment and the Line of Credit Commitment will be
reduced at the maturity thereof by the amount of the Line of Credit
Commitment of such Lender. Failure to respond by a Lender shall be deemed
to be an election not to extend the Line of Credit Commitment Period.
Borrower shall repay all Loans made by such Lender as and when due.
Neither the Commitment nor the Loans outstanding of Lenders other than such
Lender shall be reduced or in any other manner affected by such Lender's
decision not to extend the Line of Credit Commitment Period.
(b) Each Line of Credit Loan shall, at the option of Borrower,
be made or continued as, or converted into, part of one or more Borrowings
that shall consist entirely of Syndicate Line of Credit Loans (comprised of
Base Rate Advances or Eurodollar Advances) or Competitive Bid Line of
Credit Loans. The aggregate principal amount of each Borrowing of Line of
Credit Loans shall be not less than $2,000,000 or a greater integral
multiple of $100,000, provided that each Borrowing of Line of Credit Loans
comprised of Base Rate Advances shall be not less than $250,000 or a
greater integral multiple of $10,000. At no time shall the number of
Borrowings outstanding under this Article III exceed six; provided that,
for the purpose of determining the number of Borrowings outstanding and the
minimum amount for Borrowings resulting from conversions or continuations,
all Borrowings of Base Rate Advances under this Facility shall be
considered as one Borrowing. The parties hereto agree that (i) the
aggregate principal balance of the Line of Credit Loans (including the
Competitive Bid Line of Credit Loans) of the Lenders as a group shall not
exceed the aggregate principal amounts of all Line of Credit Commitments,
(ii) no Lender shall be obligated to make Syndicate Line of Credit Loans in
excess of the Line of Credit Commitment of such Lender, (iii) no Lender
shall be obligated hereunder to extend Competitive Bid Line of Credit Loans
or to make quotes for such Loans, (iv) a Lender may elect, in its
discretion, to extend Competitive Bid Line of Credit Loans which, either
alone or together with the Syndicate Line of Credit Loans of such Lender,
exceed the Line of Credit Commitment of such Lender and (v) the Competitive
Bid Line of Credit Loans (if any) extended by a Lender shall reduce the
Line of Credit Commitment of such Lender by the amount of such Competitive
Bid Line of Credit Loans so extended (but not below zero).
(c) The proceeds of Line of Credit Loans shall be used solely to
provide liquidity for the payment of commercial paper issued by Borrower
from time to time pursuant to the Borrower's unrated commercial paper
program at SunTrust Bank, Atlanta. Line of Credit Loans plus the amount of
all commercial paper issued by Borrower may not at any one time exceed
fifty million dollars ($50,000,000).
Section 3.02. Notes; Repayment of Principal.
(a) Borrower's obligations to pay the principal of, and interest
on, the Syndicate Line of Credit Loans and the Competitive Bid Line of
Credit Loans to each Lender shall be evidenced by the records of the Agent
and such Lender and by the Syndicate Line of Credit Note and the
Competitive Bid Line of Credit Note, respectively, payable to such Lender
(or the assignor of such Lender) completed in conformity with this
Agreement.
(b) All outstanding principal amounts under the Line of Credit
Loans shall be due and payable at the earlier of (i) Line of Credit
Maturity Date or (ii) acceleration of the indebtedness as provided in the
Line of Credit Notes.
Section 3.03. Voluntary Reduction of Loan Commitments. Upon at
least three (3) Business Days' prior telephonic notice (promptly confirmed
in writing) to the Agent, Borrower shall have the right, without premium or
penalty, to terminate the Line of Credit Commitments, in part or in whole,
provided that (i) any such termination shall apply to proportionately and
permanently reduce the Line of Credit Commitments of each of the Lenders,
(ii) any partial termination pursuant to this Section 3.03 shall be in an
amount of at least $1,000,000 and integral multiples of $100,000, and (iii)
no such reduction shall be permitted if prohibited or without payment of
all costs required to be paid hereunder with respect to a prepayment. If
the aggregate outstanding amount of the Line of Credit Loans exceeds the
amount of the Line of Credit Commitments as so reduced, Borrower shall
immediately repay the Line of Credit Loans by an amount equal to such
excess, together with all accrued but unpaid interest on such excess amount
and any amounts due under Section 4.12 hereof.
Section 3.04. Term Loans.
(a) The Borrower may, on or before sixty (60) days prior to any
Conversion Date of a Line of Credit Loan, request that the Borrower be
permitted to satisfy its obligation to repay the then outstanding principal
amount of such Line of Credit Loan by executing and delivering to the
respective Lenders who are owed such Line of Credit Loan a Syndicate Term
Note or Competitive Bid Term Note, as the case may be. Such Lenders shall
decide in their sole discretion whether to accept a Syndicate Term Note or
Competitive Bid Term Note in payment of such Line of Credit Loan and shall
notify the Agent of such decision no later than forty-five (45) days prior
to such Conversion Date.
(b) If the Lenders agree to accept a Syndicate Term Note or
Competitive Bid Term Note, as the case may be, then, subject to and upon
the terms and conditions herein set forth, on the Conversion Date of such
Line of Credit Loan, provided that there exists no Default or Event of
Default, Borrower shall satisfy its obligation to repay the then
outstanding principal amount of such Line of Credit Loan by executing and
delivering to the respective Lenders who are owed such Line of Credit Loan
a Syndicate Term Note or a Competitive Bid Term Note, dated the applicable
Conversion Date and payable to the applicable Lender in a principal amount
equal to such Lender's portion of the outstanding principal amount of the
Line of Credit Loan being repaid on such Conversion Date.
(c) Upon at least three (3) Business Days' prior telephonic
notice (promptly confirmed in writing) to the Agent, Borrower shall have
the right, without premium or penalty, to prepay the Term Loans, in part or
in whole, provided that (i) any such prepayment shall proportionately and
permanently reduce the Term Loans of each of the Lenders, (ii) any partial
prepayment pursuant to this Section 3.04 shall be in an amount of at least
$1,000,000 and integral multiples of $100,000, (iii) any such prepayments
shall be applied to installments of principal in inverse order of maturity,
and (iv) no such reduction shall be permitted if prohibited or without
payment of all costs required to be paid hereunder with respect to a
prepayment.
Section 3.05. Repayment of Principal of Term Loans. Borrower
shall repay each respective Term Loan two (2) years from the applicable
Conversion Date.
ARTICLE IV
GENERAL LOAN TERMS
Section 4.01. Funding Notices.
(a) (i) Whenever Borrower desires to make a Borrowing of
Syndicate Revolving Loans under its Revolving Loan Commitments or Syndicate
Line of Credit Loans under its Syndicate Line of Credit Commitments (other
than one resulting from a conversion or continuation pursuant to Section
4.01(b)(i)), it shall give the Agent prior written notice (or telephonic
notice promptly confirmed in writing) of such Borrowing (a "Notice of
Borrowing"), such Notice of Borrowing to be given prior to 11:00 A.M.
(local time for the Agent) at its Payment Office (x) one Business Day prior
to the requested date of such Borrowing in the case of Base Rate Advances,
and (y) three Business Days prior to the requested date of such Borrowing
in the case of Eurodollar Advances. Notices received after 11:00 A.M.
shall be deemed received on the next Business Day. Each Notice of Borrow
ing shall be irrevocable and shall specify the aggregate principal amount
of the Borrowing, the date of Borrowing (which shall be a Business Day),
and whether the Borrowing is to consist of Base Rate Advances or Eurodollar
Advances and (in the case of Eurodollar Advances) the Interest Period to be
applicable thereto.
(ii) Whenever Borrower desires to make a Borrowing of Competitive
Bid Revolving Loans under its Revolving Loan Commitments or Competitive Bid
Line of Credit Loans under its Line of Credit Commitments (other than one
resulting from a conversion or continuation pursuant to Section
4.01(b)(ii)), it shall give the Lenders notice that the Lenders are
requested to provide Competitive Bid Rates for Interest Periods identified
by Borrower. Notices must comply with notice requirements of each
respective Lender, which shall be communicated by Lenders to Borrower from
time to time. Each Lender in its discretion may, but shall not be
obligated to, submit a quote to the Borrower in connection with such
request. The Borrower shall then be entitled, in its sole discretion, to
elect to incur all or any part of the Competitive Bid Revolving Loan or
Competitive Bid Line of Credit Loan, as the case may be, offered by one or
more of the Lenders that have elected to provide quotes for any of the
Interest Periods and at the rate(s) quoted by such Lender(s). The
Competitive Bid Revolving Loans and Competitive Bid Line of Credit Loans
incurred by the Borrower in connection with such a request for quotes shall
not exceed (i) with respect to all Lenders then providing quotes, the then
unutilized Revolving Loan Commitments or Line of Credit Commitments, as the
case may be, of all Lenders as a group, and (ii) with respect to each
Lender providing a quote, the amount bid by such Lender in connection with
such Lender's quote. The Borrower shall notify the Agent and such Lender
or Lenders of its election in accordance with the procedures established
with such Lender or Lenders, having no obligation to report the terms
thereof.
(b) (i) Whenever Borrower desires to convert all or a portion
of an outstanding Borrowing of Syndicate Revolving Loans under its
Revolving Loan Commitments or Syndicate Line of Credit Loans under its Line
of Credit Commitments, or constituting a portion of a Syndicate Term Loan,
which Borrowing consists of Base Rate Advances into one or more Borrowings
consisting of Eurodollar Advances or to continue outstanding a Borrowing
consisting of Eurodollar Advances for a new Interest Period, it shall give
the Agent at least three Business Days' prior written notice (or telephonic
notice promptly confirmed in writing) of each such Borrowing to be
converted into or continued as Eurodollar Advances. Such notice (a "Notice
of Continuation/Conversion") shall be given prior to 11:00 A.M. (local time
for the Agent) on the date specified at the Payment Office of the Agent.
Each such Notice of Continuation/Conversion shall be irrevocable and shall
specify the aggregate principal amount of the Advances to be converted or
continued, the date of such conversion or continuation and the Interest
Period applicable thereto. If, upon the expiration of any Interest Period
in respect of any Borrowing, Borrower shall have failed to deliver the
Notice of Continuation/Conversion, Borrower shall be deemed to have elected
to convert or continue such Borrowing to a Borrowing consisting of Base
Rate Advances. So long as any Executive Officer of Borrower has knowledge
that any Default or Event of Default shall have occurred and be continuing,
no Borrowing may be converted into or continued as (upon expiration of the
current Interest Period) Eurodollar Advances unless the Agent and each of
the Lenders shall have otherwise consented in writing. No conversion of any
Borrowing of Eurodollar Advances shall be permitted except on the last day
of the Interest Period in respect thereof.
(ii) Whenever Borrower desires to continue all or a portion of an
outstanding Borrowing of Competitive Bid Revolving Loans under its
Revolving Loan Commitments or Competitive Bid Line of Credit Loans under
its Line of Credit Commitments, or constituting a portion of Competitive
Bid Term Loan, for a new Interest Period, it may request that the Lenders
provide quotes for Competitive Bid Rates in the same manner prescribed in
Section 4.01(a)(i) for funding. Whenever Borrower desires to convert all
or a portion of an outstanding Borrowing of Competitive Bid Revolving Loans
under its Revolving Loan Commitments or Competitive Bid Line of Credit
Loans under its Line of Credit Commitments, or constituting a portion of
Competitive Bid Term Loan, into a Borrowing of Syndicate Revolving Loans,
Syndicate Line of Credit Loans or Syndicate Term Loans, as the case may be,
it shall comply with the provisions prescribed in Section 4.01(b)(i) for
conversion of Syndicate Revolving Loans, Syndicate Line of Credit Loans or
Syndicate Term Loans. If, upon the expiration of any Interest Period in
respect of any Competitive Bid Borrowing, Borrower shall have failed to
deliver the Notice of Continuation/Conversion, or Lenders fail to provide
such quotes, Borrower shall be deemed to have elected to convert or
continue such Borrowing to a Borrowing of a Syndicate Revolving Loan, a
Syndicate Line of Credit Loan or a Syndicate Term Loan consisting of Base
Rate Advances. So long as any Default or Event of Default shall have
occurred and be continuing, no Borrowing may be converted into (upon
expiration of the current Interest Period) Eurodollar Advances. No
conversion of any Borrowing into Eurodollar Advances shall be permitted
except on the last day of the Interest Period in respect thereof.
(c) Without in any way limiting Borrower's obligation to confirm
in writing any telephonic notice, the Agent and the Lenders may act without
liability upon the basis of telephonic notice believed by the Agent or the
Lender in good faith to be from Borrower prior to receipt of written
confirmation. In each such case, Borrower hereby waives the right to
dispute the Agent's and the Lender's record of the terms of such telephonic
notice.
(d) The Agent shall promptly give each Lender notice by tele
phone (confirmed in writing) or by telex, telecopy or facsimile
transmission of the matters covered by the notices given to the Agent
pursuant to this Section 4.01 with respect to the Revolving Loan
Commitments, the Line of Credit Commitments, and Term Loans.
Section 4.02. Disbursement of Funds.
(a) No later than 11:00 A.M. (local time for the Agent) on the
date of each Borrowing pursuant to the Revolving Loan Commitments or the
Line of Credit Commitments (other than one resulting from a conversion or
continuation pursuant to Section 4.01(b)(i)), each Lender will make
available its Pro Rata Share of the amount of such Borrowing in immediately
available funds at the Payment Office of the Agent. The Agent will make
available to Borrower the aggregate of the amounts (if any) so made
available by the Lenders to the Agent in a timely manner by crediting such
amounts to Borrower's demand deposit account maintained with the Agent or
at Borrower's option, to effect a wire transfer of such amounts to
Borrower's account specified by the Borrower, by the close of business on
such Business Day. In the event that the Lenders do not make such amounts
available to the Agent by the time prescribed above, but such amount is
received later that day, such amount may be credited to Borrower in the man
ner described in the preceding sentence on the next Business Day (with
interest on such amount to begin accruing hereunder on such next Business
Day).
(b) No later than 1:00 P.M. (local time for the applicable
Lender) on the date of each Borrowing with respect to the Competitive Bid
Loan Commitments (other than one resulting from a conversion or
continuation pursuant to Section 4.01(b)(ii)), the Lender making any
Competitive Bid Loan will make available the amount of such Borrowing in
immediately available funds at its Payment Office on the date of each
Borrowing pursuant to the Revolving Loan Commitments or Line of Credit
Commitments (other than one resulting from a conversion or continuation
pursuant to Section 4.01(b)(ii)).
(c) Unless the Agent shall have been notified by the Lender
making any Syndicate Loan prior to the date of a Borrowing that such Lender
does not intend to make available to the Agent such Lender's portion of the
Borrowing to be made on such date, the Agent may assume that such Lender
has made such amount available to the Agent on such date and the Agent may
make available to Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Agent by such Lender on the
date of Borrowing, the Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest at
the Federal Funds Rate. If such Lender does not pay such corresponding
amount forthwith upon the Agent's demand therefor, the Agent shall promptly
notify Borrower, and Borrower shall immediately pay such corresponding
amount to the Agent together with interest at the rate specified for the
Borrowing. Nothing in this subsection shall be deemed to relieve any
Lender from its obligation to fund its Commitments hereunder or to
prejudice any rights which Borrower may have against any Lender as a result
of any default by such Lender hereunder.
(d) All Borrowings under the Syndicate Revolving Loan and Line
of Credit Commitments shall be loaned by the Lenders on the basis of their
Pro Rata Share of the Revolving Loan Commitments. All Borrowings of
Competitive Bid Loans under the Commitments shall be loaned by the Lenders
whose quotes were accepted by the Borrower. No Lender shall be responsible
for any default by any other Lender in its obligations hereunder, and each
Lender shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fund its Commit
ments hereunder.
Section 4.03. Interest.
(a) Borrower agrees to pay interest in respect of all unpaid
principal amounts of the Revolving Loans, Line of Credit Loans and Term
Loans from the respective dates such principal amounts were advanced to
maturity (whether by acceleration, notice of prepayment or otherwise) at
rates per annum (on the basis of a 360-day year) equal to the applicable
rates indicated below:
(i) For Base Rate Advances--The Base Rate in effect from
time to time; and
(ii) For Eurodollar Advances--The relevant Adjusted LIBO
Rate plus the Applicable Margin.
(b) Borrower agrees to pay interest in respect of all unpaid
principal amounts of the Competitive Bid Loans made to Borrower from the
respective dates such principal amounts were advanced to maturity (whether
by acceleration, notice of prepayment or otherwise) at times and at rates
per annum equal to the applicable rates agreed upon between Borrower and
the Lender making such Competitive Bid Loans.
(c) Overdue principal and, to the extent not prohibited by
applicable law, overdue interest, in respect of the Revolving Loans, Line
of Credit Loans and Term Loans, whether Syndicate Loans or Competitive Bid
Loans, and all other overdue amounts owing hereunder, shall bear interest
from each date that such amounts are overdue:
(i) in the case of overdue principal and interest with
respect to all Loans outstanding as Eurodollar Advances, at the
rate otherwise applicable for the then-current Interest Period
plus an additional two percent (2.0%) per annum; thereafter at
the rate in effect for Base Rate Advances plus an additional two
percent (2.0%) per annum; and
(ii) in the case of overdue principal and interest with
respect to all other Loans outstanding as Base Rate Advances, and
all other Obligations hereunder (other than Loans), at a rate
equal to the applicable Base Rate plus an additional two percent
(2.0%) per annum;
provided that no Loan shall bear interest after maturity, whether by non-
payment at scheduled due date, acceleration, notice of prepayment or
otherwise at a rate per annum less than two percent (2.0%) per annum in
excess of the rate of interest applicable thereto at maturity.
(d) Interest on each Loan shall accrue from and including the
date of such Loan to but excluding the date of any repayment thereof;
provided that, if a Loan is repaid on the same day made, one day's interest
shall be paid on such Loan. Interest on all outstanding Base Rate Advances
shall be payable quarterly in arrears on the last calendar day of each
calendar quarter of Borrower in each year. Interest on all outstanding
Eurodollar Advances shall be payable on the last day of each Interest
Period applicable thereto, and, in the case of Eurodollar Advances having
an Interest Period in excess of three months, on each day which occurs
every three months, as the case may be, after the initial date of such
Interest Period. Interest on all Loans shall be payable on any conversion
of any Advances comprising such Loans into Advances of another Type,
prepayment (on the amount prepaid), at maturity (whether by acceleration,
notice of prepayment or otherwise) and, after maturity, on demand.
(e) The Agent, upon determining the Adjusted LIBO Rate for any
Interest Period, shall promptly notify by telephone (confirmed in writing)
or in writing Borrower and the other Lenders. Any such determination
shall, absent manifest error, be final, conclusive and binding for all
purposes. A Lender making a Competitive Bid Loan has no obligation to
notify any other Lender of the interest rates charged to Borrower.
Section 4.04. Interest Periods. (a) In connection with the
making or continuation of, or conversion into, each Borrowing of Syndicate
Loans comprised of Eurodollar Advances, Borrower shall select an interest
period (each an "Interest Period") to be applicable to such Fixed
Eurodollar Advances, which Interest Period shall be either a 1, 2, 3 or 6
month period; provided that:
(i) The initial Interest Period for any Borrowing of
Eurodollar Advances shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing consisting
of Advances of another Type) and each Interest Period occurring
thereafter in respect of such Borrowing shall commence on the day
on which the next preceding Interest Period expires;
(ii) If any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day, provided that if any Interest
Period in respect of Eurodollar Advances would otherwise expire
on a day that is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iii) Any Interest Period in respect of Eurodollar Advances
which begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period shall, subject to part (iv) below, expire on the
last Business Day of such calendar month;
(iv) No Interest Period shall extend beyond any date upon
which any principal payment is due with respect to the Revolving
Loans, Line of Credit Loans, or Term Loans.
(b) When it requests a Lender to make a quote for a Competitive
Bid Loan, the Borrower shall specify to such Lender the Interest Period to
be applicable to such Loan, which Interest Period shall be as agreed upon
by the Borrower and such Lender; provided, however, that (i) no Interest
Period shall extend beyond the maturity date of the Revolving Loan
Commitment or the Line of Credit Commitment and (ii) if any Interest Period
would otherwise expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day. Interest shall be
payable in respect of each Competitive Bid Loan on the last day of each
Interest Period applicable to such Competitive Bid Loan, and at maturity
(whether by acceleration or otherwise).
Section 4.05. Fees.
(a) Borrower shall pay to the Agent, for the account of and
distribution of the respective Pro Rata Share to each Lender, a commitment
fee for the period commencing on the Closing Date to and including the
Termination Date, computed at a rate equal to the Applicable Commitment Fee
Percentage per annum on the average daily unused portion of the Revolving
Loan Commitments of such Lenders, such fee being payable quarterly in
arrears on the last calendar day of each fiscal quarter of Borrower and on
the Termination Date.
(b) Borrower shall pay to the Agent, for the account of and
distribution of the respective Pro Rata Share to each Lender, a commitment
fee for the period commencing on the Closing Date to and including the
sooner of the Line of Credit Maturity Date, computed at a rate equal to one-
eighth of one percent (0.125%) per annum on the average daily unused
portion of the Line of Credit Commitment of such Lender, such fee being
payable quarterly in arrears on the last calendar day of each fiscal
quarter of Borrower, and on the Line of Credit Maturity Date.
(c) Borrower shall pay to the Agent an annual administrative
fee, in advance, in the respective amount and on the dates previously
agreed in writing by Borrower with the Agent.
Section 4.06. Voluntary Prepayments of Borrowings.
(a) Borrower may, at its option, prepay Borrowings consisting of
Base Rate Advances at any time in whole, or from time to time in part, in
amounts aggregating $250,000 or any greater integral multiple of $10,000,
by paying the principal amount to be prepaid together with interest accrued
and unpaid thereon to the date of prepayment. Those Borrowings consisting
of Eurodollar Advances may be prepaid, at Borrower's option, in whole, or
from time to time in part, in the respective minimum amounts and multiples
set forth in Section 2.01(b) with respect to the Revolving Loans and
Section 3.01(b) with respect to the Line of Credit Loans, which shall apply
also to Term Loans, by paying the principal amount to be prepaid, together
with interest accrued and unpaid thereon to the date of prepayment, and all
compensation payments pursuant to Section 4.12 if such prepayment is made
on a date other than the last day of an Interest Period applicable thereto.
Each such optional prepayment shall be applied in accordance with
Section 4.06(c) below.
(b) Borrower shall give written notice (or telephonic notice
confirmed in writing) to the Agent of any intended prepayment of the
Revolving Loans, Line of Credit Loans, or Term Loans (i) not less than one
Business Day prior to any prepayment of Base Rate Advances and (ii) not
less than three Business Days prior to any prepayment of Eurodollar
Advances. Borrower shall give written notice (or telephonic notice
confirmed in writing) to the respective Lender who made any Competitive Bid
Loan of any intended prepayment of such Competitive Bid Loan not less than
one Business Day prior to any prepayment of such Competitive Bid Loan.
Such notice, once given, shall be irrevocable. Upon receipt of such notice
of prepayment pursuant to the first sentence of this paragraph (b), the
Agent shall promptly notify each Lender of the contents of such notice and
of such Lender's share of such prepayment.
(c) Borrower, when providing notice of prepayment pursuant to
Section 4.06(b) may designate the Types of Advances and the specific
Borrowing or Borrowings which are to be prepaid, provided that (i) if any
prepayment of Eurodollar Advances made pursuant to a single Borrowing of
the Revolving Loans, Line of Credit Loans, or Term Loans shall reduce the
outstanding Advances made pursuant to such Borrowing to an amount less than
$1,000,000, such Borrowing shall immediately be converted into Base Rate
Advances; and (ii) each prepayment made pursuant to a single Borrowing
shall be applied pro rata among the Loans comprising such Borrowing, if
such prepayment is not a prepayment of a Competitive Bid Loan. All
voluntary prepayments shall be applied to the payment of any unpaid
interest before application to principal.
Section 4.07. Payments, etc.
(a) (i) Except as otherwise specifically provided herein, all
payments under this Agreement and the other Credit Documents, other than
the payments specified in clause (ii) below, shall be made without defense,
set-off or counterclaim to the Agent, not later than 1:00 P.M. (local time
for the Agent) on the date when due and shall be made in Dollars in
immediately available funds at the respective Payment Office.
(ii) Except as otherwise specifically provided herein, all
payments under this Agreement with respect to the Lenders making any
Competitive Bid Loan shall be made without defense, set-off or counterclaim
to such Lender at its Payment Office not later than 11:00 A.M. (local time
for such Lender) on the date when due and in immediately available funds,
or at any other location of the Lender as such Lender may specify in
writing to Borrower not later than Noon (local time for the Lender) on the
Business Day such payment is due.
(b) (i) All such payments shall be made free and clear of and
without deduction or withholding for any Taxes in respect of this
Agreement, the Notes or other Credit Documents, or any payments of
principal, interest, fees or other amounts payable hereunder or thereunder
(but excluding any Taxes imposed on the overall net income of the Lenders
pursuant to the laws of the jurisdiction in which the principal executive
office or appropriate Lending Office of such Lender is located). If any
Taxes are so levied or imposed, Borrower agrees (A) to pay the full amount
of such Taxes, and such additional amounts as may be necessary so that
every net payment of all amounts due hereunder and under the Notes and
other Credit Documents, after withholding or deduction for or on account of
any such Taxes (including additional sums payable under this Section 4.07),
will not be less than the full amount provided for herein had no such
deduction or withholding been required, (B) to make such withholding or
deduction and (C) to pay the full amount deducted to the relevant authority
in accordance with applicable law. Borrower will furnish to the Agent and
each Lender, within 30 days after the date the payment of any Taxes is due
pursuant to applicable law, certified copies of tax receipts evidencing
such payment by Borrower. Borrower will indemnify and hold harmless the
Agent and each Lender and reimburse the Agent and each Lender upon written
request for the amount of any Taxes so levied or imposed and paid by the
Agent or Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such
Taxes were correctly or illegally asserted. A certificate as to the amount
of such payment by such Lender or the Agent, absent manifest error, shall
be final, conclusive and binding for all purposes.
(ii) Each Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) agrees to furnish to Borrower and the
Agent, prior to the time it becomes a Lender hereunder, two copies of
either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 or any successor forms thereto (wherein such Lender
claims entitlement to complete exemption from or reduced rate of U.S.
Federal withholding tax on interest paid by Borrower hereunder) and to
provide to Borrower and the Agent a new Form 4224 or Form 1001 or any
successor forms thereto if any previously delivered form is found to be
incomplete or incorrect in any material respect or upon the obsolescence of
any previously delivered form; provided, however, that no Lender shall be
required to furnish a form under this paragraph (ii) if it is not entitled
to claim an exemption from or a reduced rate of withholding under
applicable law. A Lender that is not entitled to claim an exemption from
or a reduced rate of withholding under applicable law, promptly upon
written request of Borrower, shall so inform Borrower in writing.
(c) Subject to Section 4.04(a)(ii), whenever any payment to be
made hereunder or under any Note shall be stated to be due on a day which
is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the applicable rate during such
extension.
(d) On other than Competitive Bid Loans, which shall be
negotiated from time to time, all computations of interest and fees shall
be made on the basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day) occurring in the
period for which such interest or fees are payable (to the extent computed
on the basis of days elapsed), except that interest on Base Rate Advances
shall be computed on the basis of a year of 360 days for the actual number
of days. Interest on Base Rate Advances shall be calculated based on the
Base Rate from and including the date of such Loan to but excluding the
date of the repayment or conversion thereof. Interest on Eurodollar
Advances shall be calculated as to each Interest Period from and including
the first day thereof to but excluding the last day thereof. Each
determination by the Agent or the Lender making any Competitive Bid Loan of
an interest rate or fee hereunder shall be made in good faith and, except
for manifest error, shall be final, conclusive and binding for all
purposes.
(e) Payment by Borrower to the Agent in accordance with the
terms of this Agreement shall, as to Borrower, constitute payment to the
Lenders under this Agreement.
Section 4.08. Interest Rate Not Ascertainable, etc. In the
event that the Agent, in the case of the Adjusted LIBO Rate, shall have
determined (which determination shall be made in good faith and, absent
manifest error, shall be final, conclusive and binding upon all parties)
that on any date for determining the Adjusted LIBO Rate for any Interest
Period, by reason of any changes arising after the date of this Agreement
affecting the London interbank market or the Agent's position in such
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of Ad
justed LIBO Rate then, and in any such event, the Agent shall forthwith
give notice (by telephone confirmed in writing) to Borrower and to the
Lenders of such determination and a summary of the basis for such
determination. Until the Agent notifies Borrower that the circumstances
giving rise to the suspension described herein no longer exist, the
obligations of the Lenders to make or permit portions of the Revolving
Loans, Line of Credit Loans, or Term Loans to remain outstanding past the
last day of the then current Interest Periods as Eurodollar Advances shall
be suspended, and such affected Advances shall bear the same interest as
Base Rate Advances.
Section 4.09. Illegality.
(a) In the event that any Lender shall have determined (which
determination shall be made in good faith and, absent manifest error, shall
be final, conclusive and binding upon all parties) at any time that the
making or continuance of any Eurodollar Advance has become unlawful by
compliance by such Lender in good faith with any applicable law,
governmental rule, regulation, guideline or order (whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful), then, in any such event, the Lender shall give prompt notice (by
telephone confirmed in writing) to Borrower and to the Agent of such
determination and a summary of the basis for such determination (which
notice the Agent shall promptly transmit to the other Lenders).
(b) Upon the giving of the notice to Borrower referred to in
subsection (a) above, (i) Borrower's right to request and such Lender's
obligation to make Eurodollar Advances shall be immediately suspended, and
such Lender shall make an Advance as part of the requested Borrowing of
Eurodollar Advances as a Base Rate Advance, provided, Borrower does not
negotiate a Competitive Bid Loan, which Base Rate Advance shall, for all
other purposes, be considered part of such Borrowing, and (ii) if the
affected Eurodollar Advance or Advances are then outstanding, Borrower
shall immediately, or if permitted by applicable law, no later than the
date permitted thereby, upon at least one Business Day's written notice to
the Agent and the affected Lender, convert each such Advance into an
Advance or Advances of a different Type with an Interest Period ending on
the date on which the Interest Period applicable to the affected Eurodollar
Advances expires, provided that if more than one Lender is affected at any
time, then all affected Lenders must be treated the same pursuant to this
Section 4.09(b).
Section 4.10. Increased Costs.
(a) If, by reason of (x) after the date hereof, the introduction
of or any change (including, without limitation, any change by way of
imposition or increase of reserve requirements) in or in the interpretation
of any law or regulation, or (y) the compliance with any guideline or
request from any central bank or other governmental authority or quasi-
governmental authority exercising control over banks or financial
institutions generally (whether or not having the force of law):
(i) any Lender (or its applicable Lending Office) shall be
subject to any tax, duty or other charge with respect to its
Eurodollar Advances or its obligation to make Eurodollar Advances, or
the basis of taxation of payments to any Lender of the principal of or
interest on its Eurodollar Advances or its obligation to make
Eurodollar Advances shall have changed (except for changes in the tax
on the overall net income of such Lender or its applicable Lending
Office imposed by the jurisdiction in which such Lender's principal
executive office or applicable Lending Office is located); or
(ii) any reserve (including, without limitation, any imposed by
the Board of Governors of the Federal Reserve System), special deposit
or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender's applicable Lending
Office shall be imposed or deemed applicable or any other condition
affecting its Eurodollar Advances or its obligation to make Eurodollar
Advances shall be imposed on any Lender or its applicable Lending
Office or the London interbank market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Advances
(except to the extent already included in the determination of the applicable
Adjusted LIBO Rate for Eurodollar Advances), or there shall be a reduction in
the amount received or receivable by such Lender or its applicable Lending
Office, then Borrower shall from time to time (subject, in the case of certain
Taxes, to the applicable provisions of Section 4.07(b)), upon written notice
from and demand by such Lender on Borrower (with a copy of such notice and
demand to the Agent), pay to the Agent for the account of such Lender within
five Business Days after the date of such notice and demand, additional amounts
sufficient to indemnify such Lender against such increased cost. A certificate
as to the amount of such increased cost, submitted to Borrower and the Agent by
such Lender in good faith and accompanied by a statement prepared by such Lender
describing in reasonable detail the basis for and calculation of such increased
cost, shall, except for manifest error, be final, conclusive and binding for all
purposes.
(b) If any Lender shall advise the Agent that at any time, because of
the circumstances described in clauses (x) or (y) in Section 4.10(a) or any
other circumstances beyond such Lender's reasonable control arising after the
date of this Agreement affecting such Lender or the London interbank market or
the United States secondary certificate of deposit market or such Lender's
position in such markets, the Adjusted LIBO Rate, as determined by the Agent,
will not adequately and fairly reflect the cost to such Lender of funding its
Eurodollar Advances, then, and in any such event:
(i) the Agent shall forthwith give notice (by telephone confirmed in
writing) to Borrower and to the other Lenders of such advice;
(ii) Borrower's right to request and such Lender's obligation to make
or permit portions of the Loans to remain outstanding past the last day of
the then current Interest Periods as Eurodollar Advances shall be
immediately suspended; and
(iii) such Lender shall make a Loan as part of the requested
Borrowing of Eurodollar Advances, as the case may be, as a Base Rate
Advance, which such Base Rate Advance shall, for all other purposes,
be considered part of such Borrowing.
Section 4.11. Lending Offices.
(a) Each Lender agrees that, if requested by Borrower, it will
use reasonable efforts (subject to overall policy considerations of such
Lender) to designate an alternate Lending Office with respect to any of its
Eurodollar Advances affected by the matters or circumstances described in
Sections 4.07(b), 4.08, 4.09 or 4.10 to reduce the liability of Borrower or
avoid the results provided thereunder, so long as such designation is not
disadvantageous to such Lender as determined by such Lender, which
determination if made in good faith, shall be conclusive and binding on all
parties hereto. Nothing in this Section 4.11 shall affect or postpone any
of the obligations of Borrower or any right of any Lender provided
hereunder.
(b) If any Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) issues a public announcement with
respect to the closing of its lending offices in the United States such
that any withholdings or deductions and additional payments with respect to
Taxes may be required to be made by Borrower thereafter pursuant to Section
4.07(b), such Lender shall use reasonable efforts to furnish Borrower
notice thereof as soon as practicable thereafter; provided, however, that
no delay or failure to furnish such notice shall in any event release or
discharge Borrower from its obligations to such Lender pursuant to Section
4.07(b) or otherwise result in any liability of such Lender.
Section 4.12. Funding Losses. Borrower shall compensate each
Lender, upon its written request to Borrower (which request shall set forth
the basis for requesting such amounts in reasonable detail and which
request shall be made in good faith and, absent manifest error, shall be
final, conclusive and binding upon all of the parties hereto), for all
losses, expenses and liabilities (including, without limitation, any
interest paid by such Lender to lenders of funds borrowed by it to make or
carry its Eurodollar Advances, in either case to the extent not recovered
by such Lender in connection with the re-employment of such funds and
including loss of anticipated profits), which the Lender may sustain: (i)
if for any reason (other than a default by such Lender) a borrowing of, or
conversion to or continuation of, Eurodollar Advances to Borrower does not
occur on the date specified therefor in a Notice of Borrowing or Notice of
Continuation/Conversion (whether or not withdrawn), (ii) if any repayment
(including mandatory prepayments and any conversions pursuant to Section
4.09(b)) of any Eurodollar Advances to Borrower occurs on a date which is
not the last day of an Interest Period applicable thereto, or (iii), if,
for any reason, Borrower defaults in its obligation to repay its Eurodollar
Advances when required by the terms of this Agreement.
Section 4.13. Assumptions Concerning Funding of Eurodollar
Advances. Calculation of all amounts payable to a Lender under this
Article IV shall be made as though that Lender had actually funded its
relevant Eurodollar Advances through the purchase of deposits in the
relevant market bearing interest at the rate applicable to such Eurodollar
Advances in an amount equal to the amount of the Eurodollar Advances and
having a maturity comparable to the relevant Interest Period and through
the transfer of such Eurodollar Advances from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar
Advances in any manner it sees fit and the foregoing assumption shall be
used only for calculation of amounts payable under this Article IV.
Section 4.14. Apportionment of Payments. Aggregate principal
and interest payments in respect of Loans and payments in respect of
facility fees and commitment fees shall be apportioned among all
outstanding Commitments and Loans to which such payments relate,
proportionately to the Lenders' respective pro rata portions of such
Commitments and outstanding Loans. The Agent shall promptly distribute to
each Lender at its payment office set forth beside its name on the
appropriate signature page hereof or such other address as any Lender may
request its share of all such payments received by the Agent.
Section 4.15. Sharing of Payments, Etc. If any Lender shall
obtain any payment or reduction (including, without limitation, any amounts
received as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code) of the Obligations (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its pro rata portion of payments or reductions on account of such
obligations obtained by all the Lenders, such Lender shall forthwith (i)
notify each of the other Lenders and Agent of such receipt, and (ii)
purchase from the other Lenders such participations in the affected
obligations as shall be necessary to cause such purchasing Lender to share
the excess payment or reduction, net of costs incurred in connection
therewith, ratably with each of them, provided that if all or any portion
of such excess payment or reduction is thereafter recovered from such
purchasing Lender or additional costs are incurred, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery or
such additional costs, but without interest unless the Lender obligated to
return such funds is required to pay interest on such funds. Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 4.15 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation.
Section 4.16. Capital Adequacy. Without limiting any other
provision of this Agreement, in the event that any Lender shall have
determined that any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order regarding capital adequacy not currently in
effect or fully applicable as of the Closing Date, or any change therein or
in the interpretation or application thereof after the Closing Date, or
compliance by such Lender with any request or directive regarding capital
adequacy not currently in effect or fully applicable as of the Closing Date
(whether or not having the force of law and whether or not failure to
comply therewith would be unlawful) from a central bank or governmental
authority or body having jurisdiction, does or shall have the effect of
reducing the rate of return on such Lender's capital as a consequence of
its obligations hereunder to a level below that which such Lender could
have achieved but for such law, treaty, rule, regulation, guideline or
order, or such change or compliance (taking into consideration such
Lender's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then within ten (10) Business Days after
written notice and demand by such Lender (with copies thereof to the
Agent), Borrower shall from time to time pay to such Lender additional
amounts sufficient to compensate such Lender for such reduction (but, in
the case of outstanding Base Rate Advances, without duplication of any
amounts already recovered by such Lender by reason of an adjustment in the
applicable Base Rate). Each certificate as to the amount payable under
this Section 4.16 (which certificate shall set forth the basis for
requesting such amounts in reasonable detail), submitted to Borrower by any
Lender in good faith, shall, absent manifest error, be final, conclusive
and binding for all purposes.
Section 4.17. Benefits to Guarantors. In consideration for the
execution and delivery by the Guarantors of their Guaranty Agreement,
Borrower agrees to make the benefit of extensions of credit hereunder
available to the Guarantors.
Section 4.18. Limitation on Certain Payment Obligations. (a)
Each Lender or Agent shall make written demand on Borrower for
indemnification or compensation pursuant to Section 4.07 no later than 90
days after the earlier of (i) the date on which such Lender or the Agent
makes payment of such Taxes, and (ii) the date on which the relevant taxing
authority or other governmental authority makes written demand upon such
Lender or the Agent for payment of such Taxes.
(b) Each Lender or the Agent shall make written demand on
Borrower for indemnification or compensation pursuant to Sections 4.12 and
4.13 no later than 90 days after the event giving rise to the claim for
indemnification or compensation occurs.
(c) Each Lender or the Agent shall make written demand on
Borrower for indemnification or compensation pursuant to Sections 4.10 and
4.16 no later than 90 days after such Lender or the Agent receives actual
notice or obtains actual knowledge of the promulgation of a law, rule,
order or interpretation or occurrence of another event giving rise to a
claim pursuant to such sections.
(d) In the event that the Lenders or the Agent fail to give
Borrower notice within the time limitations prescribed in (a) or (b) above,
Borrower shall not have any obligation to pay such claim for compensation
or indemnification. In the event that the Lender or the Agent fail to give
Borrower notice within the time limitation prescribed in (c) above,
Borrower shall not have any obligation to pay any amount with respect to
claims accruing prior to the ninetieth day preceding such written demand.
ARTICLE V.
CONDITIONS TO BORROWINGS
The obligations of each Lender to make Advances to Borrower
hereunder and to accept a Term Note on a Conversion Date is subject to the
satisfaction of the following conditions:
Section 5.01. Conditions Precedent to Initial Loans. At the
time of the making of the initial Loans hereunder on the Closing Date, all
obligations of Borrower hereunder incurred prior to the initial Loans
(including, without limitation, Borrower's obligations to reimburse the
reasonable fees and expenses of counsel to the Agent and any fees and
expenses payable to the Agent and the Lenders as previously agreed with
Borrower), shall have been paid in full, and the Agent shall have received
the following, in form and substance reasonably satisfactory in all
respects to the Agent:
(a) the duly executed counterparts of this Agreement;
(b) the duly completed Revolving Credit Notes evidencing the
Revolving Loan Commitments and the duly executed Line of Credit Notes
evidencing the Line of Credit Commitment;
(c) the Guaranty Agreements;
(d) certificate of Borrower in substantially the form of Exhibit
H attached hereto and appropriately completed;
(e) certificates of the Secretary or Assistant Secretary of each
of the Credit Parties attaching and certifying copies of the
resolutions of the boards of directors of the Credit Parties,
authorizing as applicable the execution, delivery and performance of
the Credit Documents;
(f) certificates of the Secretary or an Assistant Secretary of
each of the Credit Parties certifying (i) the name, title and true
signature of each officer of such entities executing the Credit
Documents, (ii) the bylaws or comparable governing documents of such
entities; and (iii) the certificate or articles of incorporation of
each Credit Party;
(g) certificates of good standing or existence, as may be avail
able from the Secretary of State of the jurisdiction of incorporation
or organization of such Credit Party;
(h) copies of all documents and instruments, including all
consents, authorizations and filings, required or advisable under any
Requirement of Law or by any material Contractual Obligation of the
Credit Parties, in connection with the execution, delivery,
performance, validity and enforceability of the Credit Documents and
the other documents to be executed and delivered hereunder, and such
consents, authorizations, filings and orders shall be in full force
and effect and all applicable waiting periods shall have expired;
(i) certified copies of the Intercompany Loan Documents, to the
extent that they exist and have not previously been certified to the
Lenders;
(j) acknowledgment from CSC Network Corporation System, Inc. as
to its appointment as agent for service of process for the various
Credit Parties;
(k) certified copies of indentures, credit agreements, leases,
capital leases, instruments, and other documents evidencing or
securing Indebtedness of any Consolidated Company described on
Schedule 8.01(b), in any single case in an amount not less than
$500,000 and to the extent not previously certified to the Lenders;
(l) certificates, reports and other information as the Agent may
reasonably request from any Consolidated Company in order to satisfy
the Lenders as to the absence of any material liabilities or
obligations arising from matters relating to employees of the
Consolidated Companies, including employee relations, collective
bargaining agreements, Plans, and other compensation and employee
benefit plans;
(m) certificates, reports, environmental audits and
investigations, and other information as the Agent may reasonably
request from any Consolidated Company in order to satisfy the Lenders
as to the absence of any material liabilities or obligations arising
from environmental and employee health and safety exposures to which
the Consolidated Companies may be subject, and the plans of the
Consolidated Companies with respect thereto;
(n) certificates, reports and other information as the Agent may
reasonably request from any Consolidated Company in order to satisfy
the Lenders as to the absence of any material liabilities or
obligations arising from litigation (including without limitation,
products liability and patent infringement claims) pending or
threatened against the Consolidated Companies;
(o) a summary, set forth in format and detail reasonably accept
able to the Agent, of the types and amounts of insurance (property and
liability) maintained by the Consolidated Companies;
(p) the favorable opinion of counsel to the Credit Parties,
substantially in the form of Exhibit J, addressed to the Agent and
each of the Lenders; and
(q) financial statements of Borrower and its Subsidiaries,
audited on a consolidated basis for the fiscal year ended on the last
Friday in January, 1997 and unaudited on a consolidated basis for the
fiscal quarter ended on the last Friday in April, 1997.
In addition to the foregoing, the following conditions shall have been
satisfied or shall exist, all to the satisfaction of the Agent, as of the
time the initial Loans are made hereunder:
(x) the Loans to be made on the Closing Date and the use of
proceeds thereof shall not contravene, violate or conflict with, or
involve the Agent or any Lender in a violation of, any law, rule,
injunction, or regulation, or determination of any court of law or
other governmental authority;
(y) all corporate proceedings and all other legal matters in
connection with the authorization, legality, validity and
enforceability of the Credit Documents shall be reasonably
satisfactory in form and substance to the Required Lenders; and
(z) the status of all pending and threatened litigation
(including products liability and patent claims) which might result in
a Materially Adverse Effect, including a description of any damages
sought and the claims constituting the basis therefor, shall have been
reported in writing to the Agent, the Agent shall have reported such
matters to the Lenders, and the Lenders shall be satisfied with such
status.
Section 5.02. Conditions to All Loans. At the time of the
making of all Loans (before as well as after giving effect to such Loans
and to the proposed use of the proceeds thereof), the following conditions
shall have been satisfied or shall exist:
(a) there shall exist no Default or Event of Default;
(b) all representations and warranties by Borrower contained
herein shall be true and correct in all material respects with the
same effect as though such representations and warranties had been
made on and as of the date of such Loans;
(c) since the date of the most recent financial statements of
the Consolidated Companies described in Section 6.03, there shall have
been no change which has had or could reasonably be expected to have a
Materially Adverse Effect.
(d) there shall be no action or proceeding instituted or pending
before any court or other governmental authority or, to the knowledge
of Borrower, threatened (i) which reasonably could be expected to have
a Materially Adverse Effect, or (ii) seeking to prohibit or restrict
one or more Credit Party's ownership or operation of any portion of
its business or assets, or to compel one or more Credit Party to
dispose of or hold separate all or any portion of its businesses or
assets, where such portion or portions of such business(es) or assets,
as the case may be, constitute a material portion of the total
businesses or assets of the Consolidated Companies;
(e) the Loans to be made and the use of proceeds thereof shall
not contravene, violate or conflict with, or involve the Agent or any
Lender in a violation of, any law, rule, injunction, or regulation, or
determination of any court of law or other governmental authority
applicable to Borrower; and
(f) the Agent shall have received such other documents or legal
opinions as the Agent or any Lender may reasonably request, all in
form and substance reasonably satisfactory to the Agent.
Each request for a Borrowing and the acceptance by Borrower of
the proceeds thereof shall constitute a representation and warranty by
Borrower, as of the date of the Loans comprising such Borrowing, that the
applicable conditions specified in Sections 5.01 and 5.02 have been
satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Borrower represents, warrants and covenants to Lenders that:
Section 6.01. Organization and Qualification. Borrower is a
corporation duly organized and existing in good standing under the laws of
the State of Florida. Each Subsidiary of Borrower is a corporation duly
organized and existing under the laws of the jurisdiction of its
incorporation. Borrower and each of its Subsidiaries are duly qualified to
do business as a foreign corporation and are in good standing in each
jurisdiction in which the character of their properties or the nature of
their business makes such qualification necessary, except for such
jurisdictions in which a failure to qualify to do business would not have a
Materially Adverse Effect. Borrower and each of its Subsidiaries have the
corporate power to own their respective properties and to carry on their
respective businesses as now being conducted. The jurisdiction of
incorporation or organization, and the ownership of all issued and
outstanding capital stock, for each Subsidiary as of the date of this
Agreement is accurately described on Schedule 6.01. Schedule 6.01 also
designates the Material Subsidiaries as of the Closing Date.
Section 6.02. Corporate Authority. The execution and delivery
by Borrower and the Guarantors of and the performance by Borrower and
Guarantors of their obligations under the Credit Documents have been duly
authorized by all requisite corporate action and all requisite shareholder
action, if any, on the part of Borrower and the Guarantors and do not and
will not (i) violate any provision of any law, rule or regulation, any judg
ment, order or ruling of any court or governmental agency, the
organizational papers or bylaws of Borrower or the Guarantors, or any
indenture, agreement or other instrument to which Borrower or the
Guarantors are a party or by which Borrower or the Guarantors or any of
their properties is bound, or (ii) be in conflict with, result in a breach
of, or constitute with notice or lapse of time or both a default under any
such indenture, agreement or other instrument.
Section 6.03. Financial Statements. Borrower has furnished
Lenders with the following financial statements, identified by the
Treasurer of Borrower: (i) consolidated balance sheets and consolidated
statements of income, stockholders' equity and cash flow of Borrower for
the fiscal year ended on the last Friday in January, 1997, certified by
Price Waterhouse, L.L.P. and (ii) unaudited consolidated balance sheets and
consolidated statements of income, stockholders' equity and cash flow of
Borrower for the fiscal quarter ending on the last Friday in April, 1997.
Such financial statements (including any related schedules and notes) are
true and correct in all material respects (subject, as to interim
statements, to changes resulting from audits and year end adjustments),
have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the period or periods in
question and show, in the case of audited statements, all liabilities,
direct or contingent, of Borrower and its Subsidiaries, required to be
shown in accordance with generally accepted accounting principles
consistently applied throughout the period or periods in question and
fairly present the consolidated financial position and the consolidated
results of operations of Borrower and its Subsidiaries for the periods
indicated therein. There has been no material adverse change in the
business, condition or operations, financial or otherwise, of Borrower and
its Subsidiaries since the last Friday in April, 1997.
Section 6.04. Tax Returns. Except as set forth on Schedule
6.04, each of Borrower and its Subsidiaries has filed all federal, state
and other income tax returns which, to the best knowledge of the executive
officers of Borrower and its Subsidiaries, are required to be filed, and
each has paid all taxes as shown on said returns and on all assessments
received by it to the extent that such taxes have become due or except such
as are being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with generally
accepted accounting principles.
Section 6.05. Actions Pending. Except as disclosed on Schedule
6.05 hereto, there is no action, suit, investigation or proceeding pending
or, to the knowledge of Borrower, threatened against or affecting Borrower
or any of its Subsidiaries or any of their properties or rights, by or
before any court, arbitrator or administrative or governmental body, which
might result in any Materially Adverse Effect.
Section 6.06. Representations; No Defaults. At the time of each
Extension of Credit there shall exist no Default or Event of Default, and
each Extension of Credit shall be deemed a renewal by Borrower of the
representations and warranties contained in this Agreement and an
affirmative statement by Borrower that such representations and warranties
are true and correct on and as of such time with the same effect as though
such representations and warranties had been made on and as of such time.
Section 6.07. Title to Properties. Each of Borrower and its
Subsidiaries has (i) good and marketable fee simple title to its respective
real properties (other than real properties which it leases from others),
including such real properties reflected in the consolidated balance sheet
of Borrower and its Subsidiaries as of the last Friday of April, 1997,
hereinabove described (other than real properties disposed of in the
ordinary course of business), subject to no Lien of any kind except Liens
permitted by Section 8.02 and (ii) good title to all of its other
respective properties and assets (other than properties and assets which it
leases from others), including the other properties and assets reflected in
the consolidated balance sheet of Borrower and its Subsidiaries at the last
Friday of April, 1997, hereinabove described (other than properties and
assets disposed of in the ordinary course of business), subject to no Lien
of any kind except Liens permitted by Section 8.02. Each of Borrower and
its Subsidiaries enjoys peaceful and undisturbed possession under all
leases necessary in any material respect for the operation of its
respective properties and assets, none of which contains any unusual or
burdensome provisions which might materially affect or impair the operation
of such properties and assets, and all such leases are valid and subsisting
and in full force and effect.
Section 6.08. Enforceability of Agreement. This Agreement is
the legal, valid and binding agreement of Borrower enforceable against
Borrower in accordance with its terms, and the Notes, and all other Credit
Documents, when executed and delivered, will be similarly legal, valid,
binding and enforceable, except as the enforceability of the Notes and
other Credit Documents may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditor's rights and
remedies in general and by general principles of equity, whether considered
in a proceeding at law or in equity.
Section 6.09. Consent. No consent, permission, authorization,
order or license of any governmental authority or Person is necessary in
connection with the execution, delivery, performance or enforcement of the
Credit Documents, or in order to constitute the indebtedness to be incurred
hereunder and under the Notes and the other Credit Documents as "Senior
Debt" or any similar term defined within the documents evidencing any
Subordinated Debt.
Section 6.10. Use of Proceeds; Federal Reserve Regulations. The
proceeds of the Notes will be used solely for the purposes specified in
Section 2.01(c) and 3.01(c) and none of such proceeds will be used,
directly or indirectly, for the purpose of purchasing or carrying any
"margin security" or "margin stock" or for the purpose of reducing or
retiring any indebtedness that originally was incurred to purchase or carry
a "margin security" or "margin stock" or for any other purpose that might
constitute this transaction a "purpose credit" within the meaning of the
regulations of the Board of Governors of the Federal Reserve System.
Section 6.11. ERISA.
(a) Identification of Certain Plans. Schedule 6.11 hereto sets
forth all Plans of Borrower and its Subsidiaries;
(b) Compliance. Each Plan is being maintained, by its terms and
in operation, in accordance with all applicable laws, except such
noncompliances (when taken as a whole) that will not have a materially
adverse effect on the Borrower and its Subsidiaries taken as a whole, or
upon their financial condition, assets, business, operations, liabilities
or prospects;
(c) Liabilities. Neither the Borrower nor any Subsidiary is
currently or will become subject to any liability (including withdrawal
liability), tax or penalty whatsoever to any person whomsoever with respect
to any Plan including, but not limited to, any tax, penalty or liability
arising under Title I or Title IV of ERISA or Chapter 43 of the Code,
except such liabilities (when taken as a whole) as will not have a
materially adverse effect on the Borrower and its Subsidiaries taken as a
whole, or upon their financial condition, assets, business, operations,
liabilities or prospects; and
(d) Funding. The Borrower and each ERISA Affiliate has made
full and timely payment of all amounts (i) required to be contributed under
the terms of each Plan and applicable law and (ii) required to be paid as
expenses of each Plan, except where such non-payment would not have a
Materially Adverse Effect. No Plan has an "amount of unfunded benefit
liabilities" (as defined in Section 4001(a)(18) of ERISA) except as
disclosed on Schedule 6.11. No Plan is subject to a waiver or extension of
the minimum funding requirements under ERISA or the Code, and no request
for such waiver or extension is pending.
Section 6.12. Subsidiaries. All the outstanding shares of stock
of each such Subsidiary have been validly issued and are fully paid and
nonassessable and all such outstanding shares, except as noted on such
Schedule 6.01, are owned by Borrower or a Wholly Owned Subsidiary of
Borrower free of any Lien or claim.
Each Subsidiary (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of its
incorporation with the power and authority (corporate and other) to carry
on its business as it is now conducted and (ii) is qualified to transact
business as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is required under applicable law.
Section 6.13. Outstanding Indebtedness. As of the date of
closing and after giving effect to the transactions contemplated by this
Agreement, neither Borrower nor any of its Subsidiaries has outstanding any
Indebtedness except as permitted by Section 8.01 and there exists no
default under the provisions of any instrument evidencing such Indebtedness
or of any agreement relating thereto.
Section 6.14. Conflicting Agreements. Neither Borrower nor any
of its Subsidiaries is a party to any contract or agreement or other
burdensome restrictions or subject to any charter or other corporate
restriction which materially and adversely affects its business, property
or assets, or financial condition. Assuming the consummation of the
transactions contemplated by this Agreement, neither the execution or
delivery of this Agreement or the Credit Documents, nor fulfillment of or
compliance with the terms and provisions hereof and thereof, will conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of Borrower or
any of its Subsidiaries pursuant to, the charter or By-Laws of Borrower or
any of its Subsidiaries, any award of any arbitrator or any agreement
(including any agreement with stockholders), instrument, order, judgment,
decree, statute, law, rule or regulation to which Borrower or any of its
Subsidiaries is subject, and neither Borrower nor any of its Subsidiaries
is a party to, or otherwise subject to any provision contained in, any
instrument evidencing Indebtedness of Borrower or any of its Subsidiaries,
any agreement relating thereto or any other contract or agreement
(including its charter) which limits the amount of, or otherwise imposes
restrictions on the incurring of, Indebtedness of the type to be evidenced
by the Notes or contains dividend or redemption limitations on Common Stock
of Borrower, except for this Agreement, Borrower's Certificate of
Incorporation and those matters listed on Schedule 6.14 attached hereto.
Section 6.15. Pollution and Other Regulations.
(a) Each of the Borrower and its Subsidiaries has complied in
all material respects with all applicable Environmental Laws, including
without limitation, compliance with permits, licenses, standards, schedules
and timetables, and is not in violation of, and does not presently have
outstanding any liability under, has not been notified that it is or may be
liable under and does not have knowledge of any liability or potential
liability (including any liability relating to matters set forth on
Schedule 6.15(a)) except as set forth on Schedule 6.15(a), under any
applicable Environmental Law, including without limitation, the Resource
Conservation and Recovery Act of 1976, as amended ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of
1986 ("CERCLA"), the Federal Water Pollution Control Act, as amended
("FWPCA"), the Federal Clean Air Act, as amended ("FCAA"), and the Toxic
Substance Control Act ("TSCA"), which violation, liability or potential
liability could reasonably be expected to have a Materially Adverse Effect.
(b) Except as set forth on Schedule 6.15(b), neither the
Borrower nor any of its Subsidiaries has received a written request for
information under CERCLA, any other Environmental Laws or any comparable
state law, or any public health or safety or welfare law or written notice
that any such entity has been identified as a potential responsible party
under CERCLA, and other Environmental Laws, or any comparable state law, or
any public health or safety or welfare law, nor has any such entity
received any written notification that any Hazardous Substance that it or
any of its respective predecessors in interest has generated, stored,
treated, handled, transported, or disposed of, has been released or is
threatened to be released at any site at which any Person intends to
conduct or is conducting a remedial investigation or other action pursuant
to any applicable Environmental Law, or any other Environmental Laws.
(c) Except as set forth on Schedule 6.15(c), each of the
Borrower and its Subsidiaries has obtained all permits, licenses or other
authorizations required for the conduct of their respective operations
under all applicable Environmental Laws and Asbestos Laws and each such
authorization is in full force and effect.
(d) Each of Borrower and its Subsidiaries complies in all
material respects with all laws and regulations relating to equal
employment opportunity and employee safety in all jurisdictions in which it
is presently doing business, and Borrower will use its best efforts to
comply, and to cause each of its Subsidiaries to comply, with all such laws
and regulations which may be legally imposed in the future in jurisdictions
in which Borrower or any of its Subsidiaries may then be doing business.
Section 6.16. Possession of Franchises, Licenses, Etc. Each of
Borrower and its Subsidiaries possesses all franchises, certificates,
licenses, permits and other authorizations from governmental political
subdivisions or regulatory authorities, free from burdensome restrictions,
that are necessary in any material respect for the ownership, maintenance
and operation of its properties and assets, and neither Borrower nor any of
its Subsidiaries is in violation of any thereof in any material respect.
Section 6.17. Patents, Etc. Except as set forth on Schedule
6.17, each of Borrower and its Subsidiaries owns or has the right to use
all patents, trademarks, service marks, trade names, copyrights, licenses
and other rights, free from burdensome restrictions, which are necessary
for the operation of its business as presently conducted. Nothing has come
to the attention of Borrower, any of its Subsidiaries or any of their
respective directors and officers to the effect that (i) any product,
process, method, substance, part or other material presently contemplated
to be sold by or employed by Borrower or any of its Subsidiaries in
connection with its business may infringe any patent, trademark, service
mark, trade name, copyright, license or other right owned by any other
Person, (ii) there is pending or threatened any claim or litigation against
or affecting Borrower or any of its Subsidiaries contesting its right to
sell or use any such product, process, method, substance, part or other
material or (iii) there is, or there is pending or proposed, any patent,
invention, device, application or principle or any statute, law, rule,
regulation, standard or code which would prevent, inhibit or render
obsolete the production or sale of any products of, or substantially reduce
the projected revenues of, or otherwise materially adversely affect the
business, condition or operations of, Borrower or any of its Subsidiaries.
Section 6.18. Governmental Consent. Neither the nature of
Borrower or any of its Subsidiaries nor any of their respective businesses
or properties, nor any relationship between Borrower and any other Person,
nor any circumstance in connection with the execution and delivery of the
Credit Documents and the consummation of the transactions contemplated
thereby is such as to require on behalf of Borrower or any of its
Subsidiaries any consent, approval or other action by or any notice to or
filing with any court or administrative or governmental body in connection
with the execution and delivery of this Agreement and the Credit Documents.
Section 6.19. Disclosure. Neither this Agreement nor the Credit
Documents nor any other document, certificate or written statement
furnished to Lenders by or on behalf of Borrower in connection herewith
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. There is no fact peculiar to Borrower which
materially adversely affects or in the future may (so far as Borrower can
now foresee) materially adversely affect the business, property or assets,
financial condition or prospects of Borrower which has not been set forth
in this Agreement or in the Credit Documents, certificates and written
statements furnished to Lenders by or on behalf of Borrower prior to the
date hereof in connection with the transactions contemplated hereby.
Section 6.20. Insurance Coverage. Each property of Borrower or
any of its Subsidiaries is insured within terms acceptable to Lenders for
the benefit of Borrower or a Subsidiary of Borrower in amounts deemed
adequate by Borrower's management and no less than those amounts customary
in the industry in which Borrower and its Subsidiaries operate against
risks usually insured against by Persons operating businesses similar to
those of Borrower or its Subsidiaries in the localities where such
properties are located.
Section 6.21. Labor Matters. Except as set forth on Schedule
6.21, the Borrower and the Borrower's Subsidiaries have experienced no
strikes, labor disputes, slow downs or work stoppages due to labor
disagreements which have had, or would reasonably be expected to have, a
Materially Adverse Effect, and, to the best knowledge of Borrower's
executive officers, there are no such strikes, disputes, slow downs or work
stoppages threatened against any Borrower or any of Borrower's
Subsidiaries. The hours worked and payment made to employees of the
Borrower and Borrower's Subsidiaries have not been in violation in any
material respect of the Fair Labor Standards Act or any other applicable
law dealing with such matters. All payments due from the Borrower and
Borrower's Subsidiaries, or for which any claim may be made against the
Consolidated Companies, on account of wages and employee health and welfare
insurance and other benefits have been paid or accrued as liabilities on
the books of the Borrower and Borrower's Subsidiaries where the failure to
pay or accrue such liabilities would reasonably be expected to have a
Materially Adverse Effect.
Section 6.22. Intercompany Loans; Dividends. The Intercompany
Loans and the Intercompany Credit Documents, to the extent that they exist,
have been duly authorized and approved by all necessary corporate and
shareholder action on the part of the parties thereto, and constitute the
legal, valid and binding obligations of the parties thereto, enforceable
against each of them in accordance with their respective terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditors' rights generally, and by
general principles of equity. There are no restrictions on the power of
any Consolidated Company to repay any Intercompany Loan or to pay dividends
on the capital stock. Intercompany Loans as of the Closing Date are
described in Schedule 6.22.
Section 6.23. Burdensome Restrictions. Except as set forth on
Schedule 6.23, none of the Consolidated Companies is a party to or bound by
any Contractual Obligation or Requirement of Law which has had or would
reasonably be expected to have a Materially Adverse Effect.
ARTICLE VII
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that so long as it may borrow under
this Agreement or so long as any indebtedness remains outstanding under the
Notes that it will:
Section 7.01. Corporate Existence, Etc. Preserve and maintain,
and cause each of its Material Subsidiaries to preserve and maintain, its
corporate existence, its material rights, franchises, and licenses, and its
material patents and copyrights (for the scheduled duration thereof),
trademarks, trade names, and service marks, necessary or desirable in the
normal conduct of its business, and its qualification to do business as a
foreign corporation in all jurisdictions where it conducts business or
other activities making such qualification necessary, where the failure to
do so would reasonably be expected to have a Materially Adverse Effect.
Section 7.02. Compliance with Laws, Etc. Comply, and cause each
of its Subsidiaries to comply with all Requirements of Law (including,
without limitation, the Environmental Laws, subject to the exception set
forth in Section 7.07 where the penalties, claims, fines, and other
liabilities resulting from noncompliance with such Environmental Laws do
not involve amounts in excess of $5,000,000 in the aggregate) and
Contractual Obligations applicable to or binding on any of them where the
failure to comply with such Requirements of Law and Contractual Obligations
would reasonably be expected to have a Materially Adverse Effect.
Section 7.03. Payment of Taxes and Claims, Etc. Pay, and cause
each of its Subsidiaries to pay, (i) all taxes, assessments and
governmental charges imposed upon it or upon its property, and (ii) all
claims (including, without limitation, claims for labor, materials,
supplies or services) which might, if unpaid, become a Lien upon its
property, unless, in each case, the validity or amount thereof is being
contested in good faith by appropriate proceedings and adequate reserves
are maintained with respect thereto.
Section 7.04. Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, containing
complete and accurate entries of all their respective financial and
business transactions.
Section 7.05. Visitation, Inspection, Etc. Permit, and cause
each of its Subsidiaries to permit, any representative of the Agent or any
Lender to visit and inspect any of its property, to examine its books and
records and to make copies and take extracts therefrom, and to discuss its
affairs, finances and accounts with its officers, all at such reasonable
times and as often as the Agent or such Lender may reasonably request after
reasonable prior notice to Borrower; provided, however, that at any time
following the occurrence and during the continuance of a Default or an
Event of Default, no prior notice to Borrower shall be required.
Section 7.06. Insurance; Maintenance of Properties.
(a) Maintain or cause to be maintained with financially sound
and reputable insurers, insurance with respect to its properties and
business, and the properties and business of its Subsidiaries, against loss
or damage of the kinds customarily insured against by reputable companies
in the same or similar businesses, such insurance to be of such types and
in such amounts, including such self-insurance and deductible provisions,
as is customary for such companies under similar circumstances; provided,
however, that in any event Borrower shall use its best efforts to maintain,
or cause to be maintained, insurance in amounts and with coverages not
materially less favorable to any Consolidated Company as in effect on the
date of this Agreement, except where the costs of maintaining such
insurance would, in the judgment of both Borrower and the Agent, be
excessive.
(b) Cause, and cause each of the Consolidated Companies to
cause, all properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order and
supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, settlements and improvements
thereof, all as in the judgment of Borrower may be necessary so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in
this Section shall prevent Borrower from discontinuing the operation or
maintenance of any such properties if such discontinuance is, in the
judgment of Borrower, desirable in the conduct of its business or the
business of any Consolidated Company.
Section 7.07. Reporting Covenants. Furnish to each Lender:
(a) Annual Financial Statements. As soon as available and in
any event within 95 days after the end of each fiscal year of Borrower,
balance sheets of the Consolidated Companies as at the end of such year,
presented on a consolidated basis, and the related statements of income,
shareholders' equity, and cash flows of the Consolidated Companies for such
fiscal year, presented on a consolidated basis, setting forth in each case
in comparative form the figures for the previous fiscal year, all in
reasonable detail and accompanied by a report thereon of independent public
accountants of recognized national standing reasonably acceptable to the
Agent, which such report shall be unqualified as to going concern and scope
of audit and shall state that such financial statements present fairly in
all material respects the financial condition as at the end of such fiscal
year on a consolidated basis, and the results of operations and statements
of cash flows of the Consolidated Companies for such fiscal year in
accordance with GAAP and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(b) Quarterly Financial Statements. As soon as available and in
any event within 60 days after the end of each fiscal quarter of Borrower
(other than the fourth fiscal quarter), balance sheets of the Consolidated
Companies as at the end of such quarter presented on a consolidated basis
and the related statements of income, shareholders' equity, and cash flows
of the Consolidated Companies for such fiscal quarter and for the portion
of Borrower's fiscal year ended at the end of such quarter, presented on a
consolidated basis setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of
Borrower's previous fiscal year, all in reasonable detail and certified by
the chief financial officer or principal accounting officer of Borrower
that such financial statements fairly present in all material respects the
financial condition of the Consolidated Companies as at the end of such
fiscal quarter on a consolidated basis, and the results of operations and
statements of cash flows of the Consolidated Companies for such fiscal
quarter and such portion of Borrower's fiscal year, in accordance with GAAP
consistently applied (subject to normal year-end audit adjustments and the
absence of certain footnotes);
(c) No Default/Compliance Certificate. Together with the
financial statements required pursuant to subsections (a) and (b) above, a
certificate of the president, chief financial officer or principal
accounting officer of Borrower (the "Compliance Certificate") (i) to the
effect that, based upon a review of the activities of the Consolidated
Companies and such financial statements during the period covered thereby,
there exists no Event of Default and no Default under this Agreement, or if
there exists an Event of Default or a Default hereunder, specifying the
nature thereof and the proposed response thereto, and (ii) demonstrating in
reasonable detail compliance as at the end of such fiscal year or such
fiscal quarter with Section 7.08 and Sections 8.01 through 8.04;
(d) Notice of Default. Promptly after any Executive Officer of
Borrower has notice or knowledge of the occurrence of an Event of Default
or a Default, a certificate of the chief financial officer or principal
accounting officer of Borrower specifying the nature thereof and the
proposed response thereto;
(e) Litigation. Promptly after (i) the occurrence thereof,
notice of the institution of or any adverse development in any action, suit
or proceeding or any governmental investigation or any arbitration, before
any court or arbitrator or any governmental or administrative body, agency
or official, against any Consolidated Company, or any material property
thereof which might have a Materially Adverse Effect, or (ii) actual
knowledge thereof, notice of the threat of any such action, suit,
proceeding, investigation or arbitration;
(f) Environmental Notices. Promptly after receipt thereof,
notice of any actual or alleged violation, or notice of any action, claim
or request for information, either judicial or administrative, from any
governmental authority relating to any actual or alleged claim, notice of
potential responsibility under or violation of any Environmental Law, or
any actual or alleged spill, leak, disposal or other release of any waste,
petroleum product, or hazardous waste or Hazardous Substance by any
Consolidated Company which could result in penalties, fines, claims or
other liabilities to any Consolidated Company in amounts in excess of
$5,000,000 individually or in the aggregate;
(g) ERISA.
(i) Promptly after the occurrence thereof with respect to
any Plan of any Consolidated Company or any ERISA Affiliate thereof,
or any trust established thereunder, notice of (x) a "reportable
event" described in Section 4043 of ERISA and the regulations issued
from time to time thereunder (other than a "reportable event" not
subject to the provisions for 30-day notice to the PBGC under such
regulations), or (y) any other event which could subject any
Consolidated Company to any tax, penalty or liability under Title I or
Title IV of ERISA or Chapter 43 of the Tax Code, or any tax or penalty
resulting from a loss of deduction under Sections 162, 404 or 419 of
the Tax Code, where any such taxes, penalties or liabilities exceed or
could exceed $250,000 in the aggregate;
(ii) Promptly after such notice must be provided to the
PBGC, or to a Plan participant, beneficiary or alternative payee, any
notice required under Section 101(d), 302(f)(4), 303, 307,
4041(b)(1)(A) or 4041(c)(1)(A) of ERISA or under Section 401(a)(29) or
412 of the Tax Code with respect to any Plan of any Consolidated
Company or any ERISA Affiliate thereof;
(iii) Promptly after receipt, any notice received by any
Consolidated Company or any ERISA Affiliate thereof concerning the
intent of the PBGC or any other governmental authority to terminate a
Plan of such Company or ERISA Affiliate thereof which is subject to
Title IV of ERISA, to impose any liability on such Company or ERISA
Affiliate under Title IV of ERISA or Chapter 43 of the Tax Code;
(iv) Upon the request of the Agent, promptly upon the filing
thereof with the Internal Revenue Service ("IRS") or the Department of
Labor ("DOL"), a copy of IRS Form 5500 or annual report for each Plan
of any Consolidated Company or ERISA Affiliate thereof which is
subject to Title IV of ERISA;
(v) Upon the request of the Agent, (A) true and complete
copies of any and all documents, government reports and IRS
determination or opinion letters or rulings for any Plan of any
Consolidated Company from the IRS, PBGC or DOL, (B) any reports filed
with the IRS, PBGC or DOL with respect to a Plan of the Consolidated
Companies or any ERISA Affiliate thereof, or (C) a current statement
of withdrawal liability for each Multiemployer Plan of any
Consolidated Company or any ERISA Affiliate thereof;
(h) Liens. Promptly upon any Consolidated Company becoming
aware thereof, notice of the filing of any federal statutory Lien, tax or
other state or local government Lien or any other Lien affecting their
respective properties, other than those Liens expressly permitted by
Section 8.02;
(i) Public Filings, Etc. Promptly upon the filing thereof or
otherwise becoming available, copies of all financial statements, annual,
quarterly and special reports, proxy statements and notices sent or made
available generally by Borrower to its public security holders, of all
regular and periodic reports and all registration statements and prospec
tuses (other than registration statements filed on Form S-3 of the
Securities and Exchange Commission regarding the issuance of restricted
stock in acquisitions), if any, filed by any of them with any securities ex
change, and of all press releases and other statements made available
generally to the public containing material developments in the business or
financial condition of Borrower and the other Consolidated Companies;
(j) Accountants' Reports. Promptly upon receipt thereof, copies
of all financial statements of, and all reports submitted by, independent
public accountants to Borrower in connection with each annual, interim, or
special audit of Borrower's consolidated financial statements;
(k) Burdensome Restrictions, Etc. Promptly upon the existence
or occurrence thereof, notice of the existence or occurrence of (i) any
Contractual Obligation or Requirement of Law described in Section 6.23,
(ii) failure of any Consolidated Company to hold in full force and effect
those material trademarks, service marks, patents, trade names, copyrights,
licenses and similar rights necessary in the normal conduct of its
business, and (iii) any strike, labor dispute, slow down or work stoppage
as described in Section 6.21;
(l) New Material Subsidiaries. Simultaneously with the delivery
of each Compliance Certificate, a written list of all Material Subsidiaries
formed, acquired, or created from a transfer of assets or through any other
event, during the period commencing on the Closing Date and ending on the
date on which the first Compliance Certificate is delivered, and thereafter
since the date of the most recently delivered Compliance Certificate; such
written list shall include the name of each new Material Subsidiary, its
state of incorporation, list of its officers and any other information that
the Agent shall reasonably request.
(m) Intercompany Asset Transfers. Promptly upon the occurrence
thereof, notice of the transfer of any assets from Borrower or any
Guarantor to any other Consolidated Company that is not Borrower or a
Guarantor (in any transaction or series of related transactions), excluding
sales or other transfers of assets in the ordinary course of business,
where the Asset Value of such assets is greater than $5,000,000 per
transfer;
(n) Other Information. With reasonable promptness, such other
information about the Consolidated Companies as the Agent or any Lender may
reasonably request from time to time.
Section 7.08. Financial Covenants.
(a) Working Capital. Maintain as of the last day of each fiscal
quarter, Working Capital of at least $75,000,000.
(b) Fixed Charge Coverage; Cash Flow Coverage Ratio. Maintain
as of the last day of each fiscal quarter, a minimum Fixed Charge Coverage
Ratio, calculated for the immediately preceding four fiscal quarters, of at
least 1.25:1.0, provided, however, if such Fixed Charge Coverage Ratio is
not met, the Borrower shall maintain a Cash Flow Coverage Ratio, calculated
as of the last day of each fiscal quarter, for the immediately preceding
four fiscal quarters, equal to or greater than 1.5:1.0.
(c) Funded Debt to Total Capital. Maintain as of the last day
of each fiscal quarter, a maximum ratio of Funded Debt to Total Capital, of
less than or equal to 0.60:1.0.
(d) Dividends. Borrower shall not declare or pay any dividend
on its capital stock, or make any payment to purchase, redeem, retire or
acquire any of its Subordinated Debt or capital stock or any option,
warrant, or other right to acquire such Subordinated Debt or capital stock,
other than:
(i) dividends payable solely in shares of capital stock; and
(ii) cash dividends declared and paid, and all other such
payments made, after January 29, 1993, in an aggregate amount at any
time not to exceed (x) $1,000,000, plus (y) 50% of Consolidated Net
Income (or minus 100% of Consolidated Net Loss) earned during
Borrower's fiscal year ended January 29, 1993, and thereafter (such
period to be treated as one accounting period);
provided, further, however, no such dividend or other payment may be
declared or paid pursuant to clause (ii) above unless no Default or Event
of Default exists at the time of such declaration or payment, or would
exist as a result of such declaration or payment.
Section 7.09. Notices Under Certain Other Indebtedness.
Immediately upon its receipt thereof, Borrower shall furnish the Agent a
copy of any notice received by it or any other Consolidated Company from
the holder(s) of Indebtedness referred to in Section 8.01 (or from any
trustee, agent, attorney, or other party acting on behalf of such
holder(s)) in an amount which, in the aggregate, exceeds $2,500,000, where
such notice states or claims (i) the existence or occurrence of any default
or event of default with respect to such Indebtedness under the terms of
any indenture, loan or credit agreement, debenture, note, or other document
evidencing or governing such Indebtedness, or (ii) the existence or
occurrence of any event or condition which requires or permits holder(s) of
any Indebtedness to exercise rights under any Change in Control Provision.
Borrower agrees to take such actions as may be necessary to require the
holder(s) of any Indebtedness (or any trustee or agent acting on their
behalf) incurred pursuant to documents executed or amended and restated
after the Closing Date, to furnish copies of all such notices directly to
the Agent simultaneously with the furnishing thereof to Borrower, and that
such requirement may not be altered or rescinded without the prior written
consent of the Agent.
Section 7.10. Additional Guarantors. Borrower shall cause each
new Material Subsidiary reported to the Agent and the Lenders pursuant to
Section 7.07(l) above to execute and deliver to the Agent, simultaneously
with the report given pursuant to Section 7.07(l) above, a Guaranty
Agreement, together with related documents of the kind described in Section
5.01, as appropriate, all in form and substance satisfactory to the Agent
and the Required Lenders.
Section 7.11. Financial Statements; Fiscal Year. Borrower shall
make no change in the dates of the fiscal year now employed for accounting
and reporting purposes without the prior written consent of the Required
Lenders, which consent shall not be unreasonably withheld.
Section 7.12. Ownership of Guarantors. Borrower shall maintain
its percentage of ownership existing as of the date hereof of all
Guarantors, and shall not decrease its ownership percentage in each Person
which becomes a Guarantor after the date hereof, as such ownership exists
at the time such Person becomes a Guarantor.
ARTICLE VIII
NEGATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any Note
shall remain unpaid, Borrower will not and will not permit any Subsidiary
to:
Section 8.01. Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, other than:
(a) Indebtedness under this Agreement;
(b) Indebtedness outstanding on the date hereof or pursuant to
lines of credit in effect on the date hereof and described on Schedule
8.01(b);
(c) purchase money Indebtedness to the extent secured by a Lien
permitted by Section 8.02(b) provided such purchase money Indebtedness does
not exceed $10,000,000;
(d) unsecured current liabilities (other than liabilities for
borrowed money or liabilities evidenced by promissory notes, bonds or
similar instruments) incurred in the ordinary course of business and either
(i) not more than 30 days past due, or (ii) being disputed in good faith by
appropriate proceedings with reserves for such disputed liability
maintained in conformity with GAAP;
(e) the Intercompany Loans described on Schedule 6.22 and any
other loans between Consolidated Companies provided that (i) no loan or
other extension of credit may be made by a Guarantor to another
Consolidated Company that is not a Guarantor hereunder and all such loans
and extensions of credit shall not exceed $5,000,000 in the aggregate at
any one time outstanding (excluding Intercompany Loans listed on Schedule
6.22) unless otherwise agreed in writing by the Agent and the Required
Lenders; (ii) such loans or other extensions of credit are otherwise
permitted pursuant to the limitations of this Section 8.01;
(f) other Subordinated Debt in form and substance acceptable to
the Agent and the Required Lenders, and evidenced by their written consent
thereto;
(g) cash management lines of credit from financial institutions
not exceeding $15,000,000 in principal amount;
(h) Indebtedness in an amount not to exceed $80,000,000 to be
evidenced by the Company's Senior Notes due in August or September 2012, of
which (i) $40,000,000 of such Senior Notes will have an interest rate of
7.14% and a 10-year average life and (ii) $40,000,000 of such Senior Notes
will have an interest rate of 7.19% and a 12-year average life, which
Senior Notes the Company expects to issue in August 1997;
(i) a $40,000,000 interest rate hedging agreement, executed on
August 6, 1997 and to be effective on August 27, 1997, maturing on May 30,
2012, but terminable by the other party to the agreement at six month
intervals beginning May 30, 2000; and
(j) other Indebtedness not to exceed $20,000,000 at any one time
outstanding.
Section 8.02. Liens. Create, incur, assume or suffer to exist
any Lien on any of its property now owned or hereafter acquired to secure
any Indebtedness other than:
(a) Liens existing on the date hereof disclosed on Schedule 8.02
(excluding Liens securing operating leases with annual payments of less
than $100,000);
(b) any Lien on any property securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the acquisition
cost of such property and any refinancing thereof, provided that such Lien
does not extend to any other property, and provided further that the
aggregate principal amount of Indebtedness secured by all such Liens at any
time does not exceed $20,000,000;
(c) Liens for taxes not yet due, and Liens for taxes or Liens
imposed by ERISA which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being
maintained;
(d) Statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law created
in the ordinary course of business for amounts not yet due or which are
being contested in good faith by appropriate proceedings and with respect
to which adequate reserves are being maintained;
(e) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money); and
(f) Liens (other than those permitted by paragraphs (a) through
(e) of this Section 8.02) encumbering assets having an Asset Value not
greater than $20,000,000 in the aggregate at any one time.
Section 8.03. Mergers, Acquisitions, Sales, Etc. Merge or
consolidate with any other Person, other than Borrower or another
Subsidiary, or sell, lease, or otherwise dispose of its accounts, property
or other assets (including capital stock of Subsidiaries), or purchase,
lease or otherwise acquire all or any substantial portion of the property
or assets (including capital stock) of any Person; provided, however, that
the foregoing restrictions on asset sales shall not be applicable to (i)
sales of equipment or other personal property being replaced by other
equipment or other personal property purchased as a capital expenditure
item, (ii) sales of accounts receivable pursuant to a securitization
program, provided further that any program costs incurred by the Borrower
in pursuing such a program shall be considered interest under this Credit
Agreement, (iii) other asset sales (including the stock of Subsidiaries)
where, on the date of execution of a binding obligation to make such asset
sale (provided that if the asset sale is not consummated within six (6)
months of such execution, then on the date of consummation of such asset
sale rather than on the date of execution of such binding obligation), the
Asset Value of asset sales occurring after the Closing Date, taking into
account the Asset Value of the proposed asset sale, would not exceed ten
percent (10%) of Borrower's Consolidated Net Worth, since the Closing Date,
and (iv) sales of inventory in the ordinary course of business; provided,
further, that the foregoing restrictions on mergers shall not apply to
mergers involving Borrower and another entity, provided Borrower is the
surviving entity, and mergers between a Subsidiary of Borrower and Borrower
or between Subsidiaries of Borrower provided that, in either case, upon
consummation of such mergers, Borrower is in compliance with the other
provisions hereof; provided, further, that the foregoing restrictions on
asset purchases shall not apply to asset purchases by Borrower to the
extent that after giving effect to such purchases, Borrower is in
compliance with Section 8.04 hereof; provided, however, that no transaction
pursuant to clauses (i), (ii) or (iii) or the second or third provisos
above shall be permitted if any Default or Event of Default otherwise
exists at the time of such transaction or would otherwise exist as a result
of such transaction.
Section 8.04. Investments, Loans, Etc. Make, permit or hold any
Investments in any Person, or otherwise acquire or hold any Subsidiaries,
other than:
(a) Investments in Subsidiaries that are Guarantors under this
Agreement, whether such Subsidiaries are Guarantors on the Closing Date or
become Guarantors in accordance with Section 7.10 after the Closing Date;
provided, however, nothing in this Section 8.04 shall be deemed to
authorize an investment pursuant to this subsection (a) in any entity that
is not a Subsidiary and a Guarantor prior to such investment;
(b) Investments in Subsidiaries, other than those Subsidiaries
that are or become Guarantors under this Agreement, or persons that
thereafter become Subsidiaries, in an aggregate amount not to exceed
$15,000,000 unless otherwise consented to in writing by the Required
Lenders;
(c) Investments in other Persons that are not, and do not
become, Subsidiaries in an aggregate amount not to exceed $25,000,000
unless otherwise consented to in writing by the Required Lenders;
(d) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency
thereof, in each case supported by the full faith and credit of the United
States and maturing within one year from the date of creation thereof;
(e) commercial paper maturing within one year from the date of
creation thereof rated in the highest grade by a nationally recognized
credit rating agency;
(f) time deposits maturing within one year from the date of
creation thereof with, including certificates of deposit issued by any
Lender and any office located in the United States of any bank or trust
company which is organized under the laws of the United States or any state
thereof and has total assets aggregating at least $500,000,000, including
without limitation, any such deposits in Eurodollars issued by a foreign
branch of any such bank or trust company;
(g) Investments made by Plans; and
(h) permitted Intercompany Loans on terms and conditions
acceptable to the Agent.
Section 8.05 Sale and Leaseback Transactions. Sell or transfer
any property, real or personal, whether now owned or hereafter acquired,
and thereafter rent or lease such property or other property which any
Consolidated Company intends to use for substantially the same purpose or
purposes as the property being sold or transferred, except to the extent
that the aggregate value of all such property sold and leased back does not
exceed $5,000,000 at any one time.
Section 8.06 Transactions with Affiliates.
(a) Enter into any material transaction or series of related
transactions which in the aggregate would be material, whether or not in
the ordinary course of business, with any Affiliate of any Consolidated
Company (but excluding any Affiliate which is also a Consolidated Company),
other than on terms and conditions substantially as favorable to such
Consolidated Company as would be obtained by such Consolidated Company at
the time in a comparable arm's-length transaction with a Person other than
an Affiliate.
(b) Convey or transfer to any other Person (including any other
Consolidated Company) any real property, buildings, or fixtures used in the
manufacturing or production operations of any Consolidated Company, or
convey or transfer to any other Consolidated Company any other assets
(excluding conveyances or transfers in the ordinary course of business) if
at the time of such conveyance or transfer any Default or Event of Default
exists or would exist as a result of such conveyance or transfer.
Section 8.07 Optional Prepayments. Directly or indirectly,
prepay, purchase, redeem, retire, defease or otherwise acquire, or make any
optional payment on account of any principal of, interest on, or premium
payable in connection with the optional prepayment, redemption or
retirement of, any of its Indebtedness, or give a notice of redemption with
respect to any such Indebtedness, or make any payment in violation of the
subordination provisions of any Subordinated Debt, except with respect to
(i) the Obligations under this Agreement and the Notes, (ii) prepayments of
Indebtedness outstanding pursuant to revolving credit, overdraft and line
of credit facilities permitted pursuant to Section 8.01, (iii) Intercompany
Loans made or outstanding pursuant to Section 8.01, (iv) Intercompany Loans
made or outstanding pursuant to Section 8.01 upon the prior written consent
of the Agent and the Required Lenders, and (v) Subordinated Debt, in form
and substance acceptable to the Agent and the Required Lenders, as
evidenced by their written consent, issued to refinance existing
Subordinated Debt.
Section 8.08 Changes in Business. Enter into any business which
is substantially different from that presently conducted by the
Consolidated Companies taken as a whole except where the aggregate
Investment made, and other funds expended or committed with respect to such
business does not exceed $5,000,000.
Section 8.09 ERISA. Take or fail to take any action with
respect to any Plan of any Consolidated Company or, with respect to its
ERISA Affiliates, any Plans which are subject to Title IV of ERISA or to
continuation health care requirements for group health plans under the Tax
Code, including without limitation (i) establishing any such Plan, (ii)
amending any such Plan (except where required to comply with applicable
law), (iii) terminating or withdrawing from any such Plan, or (iv)
incurring an amount of unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA, or any withdrawal liability under Title IV of ERISA
with respect to any such Plan, without first obtaining the written approval
of the Agent and the Required Lenders, where such actions or failures could
result in a Materially Adverse Effect.
Section 8.10 Additional Negative Pledges. Create or otherwise
cause or suffer to exist or become effective, directly or indirectly, any
prohibition or restriction on the creation or existence of any Lien upon
any asset of any Consolidated Company, other than pursuant to (i) the terms
of any agreement, instrument or other document pursuant to which any
Indebtedness permitted by Section 8.02(b) is incurred by any Consolidated
Company, so long as such prohibition or restriction applies only to the
property or asset being financed by such Indebtedness, and (ii) any
requirement of applicable law or any regulatory authority having
jurisdiction over any of the Consolidated Companies.
Section 8.11 Limitation on Payment Restrictions Affecting
Consolidated Companies. Create or otherwise cause or suffer to exist or
become effective, any consensual encumbrance or restriction on the ability
of any Consolidated Company to (i) pay dividends or make any other
distributions on such Consolidated Company's stock, or (ii) pay any
indebtedness owed to Borrower or any other Consolidated Company, or (iii)
transfer any of its property or assets to Borrower or any other
Consolidated Company, except any consensual encumbrance or restriction
existing under the Credit Documents.
Section 8.12 Actions Under Certain Documents. Without the prior
written consent of the Agent (which consent shall not be unreasonably
withheld), modify, amend, cancel or rescind the Intercompany Loans or
Intercompany Loan Documents, or any agreements or documents evidencing or
governing Subordinated Debt or the senior Indebtedness permitted pursuant
to Section 8.01 hereof (except that a loan between Consolidated Companies
as permitted by Section 8.01 may be modified or amended so long as it
otherwise satisfies the requirements of Section 8.01), or make demand of
payment or accept payment on any Intercompany Loans permitted by Section
8.01, except that current interest accrued thereon as of the date of this
Agreement and all interest subsequently accruing thereon (whether or not
paid currently) may be paid unless a Default or Event of Default has
occurred and is continuing.
ARTICLE IX
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following specified events (each an "Event of Default"):
Section 9.01. Payments. Borrower shall fail to make promptly
when due (including, without limitation, by mandatory prepayment) any
principal payment with respect to the Loans, or Borrower shall fail to make
within five (5) Business Days after the due date thereof any payment of
interest, fee or other amount payable hereunder;
Section 9.02. Covenants Without Notice. Borrower shall fail to
observe or perform any covenant or agreement contained in Sections 7.07(f),
7.08, 7.11, 8.01 through 8.07 and 8.09 through 8.12;
Section 9.03. Other Covenants. Borrower shall fail to observe
or perform any covenant or agreement contained in this Agreement, other
than those referred to in Sections 9.01 and 9.02, and, if capable of being
remedied, such failure shall remain unremedied for 30 days after the
earlier of (i) Borrower's obtaining knowledge thereof, or (ii) written
notice thereof shall have been given to Borrower by the Agent or any
Lender;
Section 9.04. Representations. Any representation or warranty
made or deemed to be made by Borrower or any other Credit Party or by any
of its officers under this Agreement or any other Credit Document
(including the Schedules attached thereto), or any certificate or other
document submitted to the Agent or the Lenders by any such Person pursuant
to the terms of this Agreement or any other Credit Document, shall be
incorrect in any material respect when made or deemed to be made or
submitted;
Section 9.05. Non-Payments of Other Indebtedness. Any
Consolidated Company shall fail to make when due (whether at stated
maturity, by acceleration, on demand or otherwise, and after giving effect
to any applicable grace period) any payment of principal of or interest on
any Indebtedness (other than the Obligations) exceeding $1,000,000 in the
aggregate;
Section 9.06. Defaults Under Other Agreements. Any Consolidated
Company shall fail to observe or perform within any applicable grace period
any covenants or agreements contained in any agreements or instruments
relating to any of its Indebtedness exceeding $1,000,000 in the aggregate,
or any other event shall occur if the effect of such failure or other event
is to accelerate, or to permit the holder of such Indebtedness or any other
Person to accelerate, the maturity of such Indebtedness; or any such
Indebtedness shall be required to be prepaid (other than by a regularly
scheduled required prepayment) in whole or in part prior to its stated
maturity;
Section 9.07. Bankruptcy. Borrower or any other Consolidated
Company shall commence a voluntary case concerning itself under the
Bankruptcy Code or an involuntary case for bankruptcy is commenced against
any Consolidated Company and the petition is not controverted within 10
days, or is not dismissed within 60 days, after commencement of the case;
or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or any substantial part of the property of any
Consolidated Company; or any Consolidated Company commences proceedings of
its own bankruptcy or to be granted a suspension of payments or any other
proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of
any jurisdiction, whether now or hereafter in effect, relating to any
Consolidated Company or there is commenced against any Consolidated Company
any such proceeding which remains undismissed for a period of 60 days; or
any Consolidated Company is adjudicated insolvent or bankrupt; or any order
of relief or other order approving any such case or proceeding is entered;
or any Consolidated Company suffers any appointment of any custodian or the
like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or any Consolidated
Company makes a general assignment for the benefit of creditors; or any
Consolidated Company shall fail to pay, or shall state that it is unable to
pay, or shall be unable to pay, its debts generally as they become due; or
any Consolidated Company shall call a meeting of its creditors with a view
to arranging a composition or adjustment of its debts; or any Consolidated
Company shall by any act or failure to act indicate its consent to,
approval of or acquiescence in any of the foregoing; or any corporate
action is taken by any Consolidated Company for the purpose of effecting
any of the foregoing;
Section 9.08. ERISA. A Plan of a Consolidated Company or a Plan
subject to Title IV of ERISA of any of its ERISA Affiliates:
(i) shall fail to be funded in accordance with the minimum
funding standard required by applicable law, the terms of
such Plan, Section 412 of the Tax Code or Section 302 of
ERISA for any plan year or a waiver of such standard is
sought or granted with respect to such Plan under applicable
law, the terms of such Plan or Section 412 of the Tax Code
or Section 303 of ERISA; or
(ii) is being, or has been, terminated or the subject of
termination proceedings under applicable law or the terms of
such Plan; or
(iii) shall require a Consolidated Company to provide
security under applicable law, the terms of such Plan,
Section 401 or 412 of the Tax Code or Section 306 or 307 of
ERISA; or
(iv) results in a liability to a Consolidated Company under
applicable law, the terms of such Plan, or Title IV of
ERISA;
and there shall result from any such failure, waiver, termination or other
event a liability to the PBGC or a Plan that would have a Materially
Adverse Effect;
Section 9.09. Money Judgment. A judgment or order for the
payment of money in excess of $1,000,000 or otherwise having a Materially
Adverse Effect shall be rendered against Borrower or any other Consolidated
Company and such judgment or order shall continue unsatisfied (in the case
of a money judgment) and in effect for a period of 30 days during which
execution shall not be effectively stayed or deferred (whether by action of
a court, by agreement or otherwise);
Section 9.10. Ownership of Credit Parties and Pledged Entities.
If Borrower shall at any time fail to own and control the required
percentage of the voting stock of any Guarantor, either directly or indi
rectly through a wholly-owned Subsidiary of Borrower;
Section 9.11. Change in Control of Borrower. (a) Any "person"
or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act), other than the Hughes Family shall become the "beneficial
owner(s)" (as defined in said Rule 13d-3) of more than twenty-five percent
(25%) of the shares of the outstanding common stock of Borrower entitled to
vote for members of Borrower's board of directors, or (b) any event or
condition shall occur or exist which, pursuant to the terms of any change
in control provision, requires or permits the holder(s) of Indebtedness of
any Consolidated Company to require that such Indebtedness be redeemed,
repurchased, defeased, prepaid or repaid, in whole or in part, or the
maturity of such Indebtedness to be accelerated in any respect;
Section 9.12. Default Under Other Credit Documents. There shall
exist or occur any "Event of Default" as provided under the terms of any
other Credit Document, or any Credit Document ceases to be in full force
and effect or the validity or enforceability thereof is disaffirmed by or
on behalf of Borrower or any other Credit Party, or at any time it is or
becomes unlawful for Borrower or any other Credit Party to perform or
comply with its obligations under any Credit Document, or the obligations
of Borrower or any other Credit Party under any Credit Document are not or
cease to be legal, valid and binding on Borrower or any such Credit Party;
Section 9.13. Attachments. An attachment or similar action
shall be made on or taken against any of the assets of any Consolidated
Company with an Asset Value exceeding $3,000,000 in aggregate and is not
removed, suspended or enjoined within 30 days of the same being made or any
suspension or injunction being lifted;
then, and in any such event, and at any time thereafter if any Event of
Default shall then be continuing, the Agent may, and upon the written or
telex request of the Required Lenders, shall, by written notice to
Borrower, take any or all of the following actions, without prejudice to
the rights of the Agent, any Lender or the holder of any Note to enforce
its claims against Borrower or any other Credit Party: (i) declare all
Commitments terminated, whereupon the pro rata Commitments of each Lender
shall terminate immediately and any commitment fee shall forthwith become
due and payable without any other notice of any kind; and (ii) declare the
principal of and any accrued interest on the Loans, and all other
Obligations owing hereunder, to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by Borrower; provided,
that, if an Event of Default specified in Section 9.07 shall occur, the
result which would occur upon the giving of written notice by the Agent to
any Credit Party, as specified in clauses (i) and (ii) above, shall occur
automatically without the giving of any such notice.
ARTICLE X
THE AGENT
Section 10.01. Appointment of Agent. Each Lender hereby
designates SunTrust Central Florida, National Association as the "Agent" to
administer all matters concerning the Loans and to act as herein specified.
Each Lender hereby irrevocably authorizes, and each holder of any Note by
the acceptance of a Note shall be deemed irrevocably to authorize, the
Agent to take such actions on its behalf under the provisions of this
Agreement, the other Credit Documents, and all other instruments and
agreements referred to herein or therein, and to exercise such powers and
to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof and
such other powers as are reasonably incidental thereto. The Agent may
perform any of its duties hereunder by or through its agents or employees.
The provisions of this Section 10.01 are solely for the benefit of the
Agent, and Borrower and the other Consolidated Companies shall not have any
rights as third party beneficiaries of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall
act solely as agent of the Lenders and does not assume and shall not be
deemed to have assumed any obligations towards or relationship of agency or
trust with or for the Borrower and the other Consolidated Companies.
Section 10.02. Nature of Duties of Agent. The Agent shall have
no duties or responsibilities except those expressly set forth in this
Agreement and the other Credit Documents. Neither the Agent nor any of its
officers, directors, employees or agents shall be liable for any action
taken or omitted by it as such hereunder or in connection herewith, unless
caused by its or their gross negligence or willful misconduct. The duties
of the Agent shall be ministerial and administrative in nature; the Agent
shall not have by reason of this Agreement a fiduciary relationship in
respect of any Lender; and nothing in this Agreement, express or implied,
is intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement or the other Credit Documents
except as expressly set forth herein.
Section 10.03. Lack of Reliance on the Agent.
(a) Independently and without reliance upon the Agent, each
Lender, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Credit Parties in connection with the taking or not taking
of any action in connection herewith, and (ii) its own appraisal of the
creditworthiness of the Credit Parties, and, except as expressly provided
in this Agreement, the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit
or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times
thereafter.
(b) The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or
in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, priority or sufficiency of this Agreement,
the Notes, the Guaranty Agreements, or any other documents contemplated
hereby or thereby, or the financial condition of the Credit Parties, or be
required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement,
the Notes, the Guaranty Agreements, or the other documents contemplated
hereby or thereby, or the financial condition of the Credit Parties, or the
existence or possible existence of any Default or Event of Default;
provided, however, to the extent that the Agent has been advised that a
Lender has not received any information formally delivered to the Agent
pursuant to Section 7.07, the Agent shall deliver or cause to be delivered
such information to such Lender.
Section 10.04. Certain Rights of the Agent. If the Agent shall
request instructions from the Required Lenders with respect to any action
or actions (including the failure to act) in connection with this
Agreement, the Agent shall be entitled to refrain from such act or taking
such act, unless and until the Agent shall have received instructions from
the Required Lenders; and the Agent shall not incur liability in any Person
by reason of so refraining. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Agent as a result of
the Agent acting or refraining from acting hereunder in accordance with the
instructions of the Required Lenders.
Section 10.05. Reliance by Agent. The Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cable gram, radiogram, order or other documentary,
teletransmission or telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person. The
Agent may consult with legal counsel (including counsel for any Credit
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
Section 10.06. Indemnification of Agent. To the extent the
Agent is not reimbursed and indemnified by the Credit Parties, each Lender
will reimburse and indemnify the Agent, ratably according to the respective
amounts of the Loans outstanding under all Facilities (or if no amounts are
outstanding, ratably in accordance with the Total Commitments), in either
case, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
counsel fees and disbursements) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the
Agent in performing its duties hereunder, in any way relating to or arising
out of this Agreement or the other Credit Documents; provided that no
Lender shall be liable to the Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct.
Section 10.07. The Agent in Its Individual Capacity. With
respect to its obligation to lend under this Agreement, the Loans made by
it and the Notes issued to it, the Agent shall have the same rights and
powers hereunder as any other Lender or holder of a Note and may exercise
the same as though it were not performing the duties specified herein; and
the terms "Lenders", "Required Lenders", "holders of Notes", or any similar
terms shall, unless the context clearly otherwise indicates, include the
Agent in its individual capacity. The Agent may accept deposits from, lend
money to, and generally engage in any kind of banking, trust, financial
advisory or other business with the Consolidated Companies or any affiliate
of the Consolidated Companies as if it were not performing the duties
specified herein, and may accept fees and other consideration from the
Consolidated Companies for services in connection with this Agreement and
otherwise without having to account for the same to the Lenders.
Section 10.08. Holders of Notes. The Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof shall have
been filed with the Agent. Any request, authority or consent of any Person
who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.
Section 10.09. Successor Agent
(a) The Agent may resign at any time by giving written notice
thereof to the Lenders and Borrower and may be removed at any time with or
without cause by the Required Lenders; provided, however, the Agent may not
resign or be removed until a successor Agent has been appointed and shall
have accepted such appointment. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Agent subject
to Borrower's prior written approval. If no successor Agent shall have
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Agent, then
the retiring Agent may, on behalf of the Lenders, appoint a successor Agent
subject to Borrower's prior written approval, which shall be a bank which
maintains an office in the United States, or a commercial bank organized
under the laws of the United States of America or any State thereof, or any
Affiliate of such bank, having a combined capital and surplus of at least
$100,000,000. If at any time SunTrust Bank, Central Florida is removed as
a Lender, SunTrust Bank, Central Florida shall simultaneously resign as
Agent.
(b) Upon the acceptance of any appointment as the Agent
hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Agent's resignation or removal hereunder as Agent, the provisions of this
Article X shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was an Agent under this Agreement.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank
wire, telex, telecopy or similar teletransmission or writing) and shall be
given to such party at its address or applicable teletransmission number
set forth on the signature pages hereof, or such other address or
applicable teletransmission number as such party may hereafter specify by
notice to the Agent and Borrower. Each such notice, request or other com
munication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid, (iii) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section
and the appropriate confirmation is received, or (iv) if given by any other
means (including, without limitation, by air courier), when delivered or
received at the address specified in this Section; provided that notices to
the Agent shall not be effective until received.
Section 11.02. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the other Credit Documents, nor consent to
any departure by any Credit Party therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Required
Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided
that no amendment, waiver or consent shall, unless in writing and signed by
all the Lenders do any of the following: (i) waive any of the conditions
specified in Section 5.01 or 5.02, (ii) increase the Commitments or other
contractual obligations to Borrower under this Agreement, (iii) reduce the
principal of, or interest on, the Notes or any fees hereunder, (iv)
postpone any date fixed for the payment in respect of principal of, or
interest on, the Notes or any fees hereunder, (v) change the percentage of
the Commitments or of the aggregate unpaid principal amount of the Notes,
or the number or identity of Lenders which shall be required for the
Lenders or any of them to take any action hereunder, (vi) release any
Guarantor from its obligations under any Guaranty Agreement, (vii) modify
the definition of "Required Lenders," or (viii) modify this Section 11.02.
Notwithstanding the foregoing, no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Lenders
required hereinabove to take such action, affect the rights or duties of
the Agent under this Agreement or under any other Credit Document.
Section 11.03. No Waiver; Remedies Cumulative. No failure or
delay on the part of the Agent, any Lender or any holder of a Note in
exercising any right or remedy hereunder or under any other Credit
Document, and no course of dealing between any Credit Party and the Agent,
any Lender or the holder of any Note shall operate as a waiver thereof, nor
shall any single or partial exercise of any right or remedy hereunder or
under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right or remedy hereunder or
thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Agent, any
Lender or the holder of any Note would otherwise have. No notice to or
demand on any Credit Party not required hereunder or under any other Credit
Document in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver
of the rights of the Agent, the Lenders or the holder of any Note to any
other or further action in any circumstances without notice or demand.
Section 11.04. Payment of Expenses, Etc. Borrower shall:
(i) whether or not the transactions hereby contemplated are
consummated, pay all reasonable, out-of-pocket costs and expenses of
the Agent in the administration (both before and after the execution
hereof and including reasonable expenses actually incurred relating to
advice of counsel as to the rights and duties of the Agent and the
Lenders with respect thereto) of, and in connection with the
preparation, execution and delivery of, preservation of rights under,
enforcement of, and, after a Default or Event of Default, refinancing,
renegotiation or restructuring of, this Agreement and the other Credit
Documents and the documents and instruments referred to therein, and
any amendment, waiver or consent relating thereto (including, without
limitation, the reasonable fees actually incurred and disbursements of
counsel for the Agent), and in the case of enforcement of this
Agreement or any Credit Document after an Event of Default, all such
reasonable, out-of-pocket costs and expenses (including, without
limitation, the reasonable fees actually incurred and disbursements of
counsel), for any of the Lenders;
(ii) subject, in the case of certain Taxes, to the applicable
provisions of Section 4.07(b), pay and hold each of the Lenders
harmless from and against any and all present and future stamp,
documentary, and other similar Taxes with respect to this Agreement,
the Notes and any other Credit Documents, any collateral described
therein, or any payments due thereunder, and save each Lender harmless
from and against any and all liabilities with respect to or resulting
from any delay or omission to pay such Taxes; and
(iii) indemnify the Agent, the Agent and each Lender, and their
respective officers, directors, employees, representatives and agents
from, and hold each of them harmless against, any and all costs,
losses, liabilities, claims, damages or expenses incurred by any of
them (whether or not any of them is designated a party thereto) (an
"Indemnitee") arising out of or by reason of any investigation,
litigation or other proceeding related to any actual or proposed use
of the proceeds of any of the Loans or any Credit Party's entering
into and performing of the Agreement, the Notes, or the other Credit
Documents, including, without limitation, the reasonable fees actually
incurred and disbursements of counsel (including foreign counsel)
incurred in connection with any such investigation, litigation or
other proceeding; provided, however, Borrower shall not be obligated
to indemnify any Indemnitee for any of the foregoing arising out of
such Indemnitee's gross negligence or willful misconduct;
(iv) without limiting the indemnities set forth in subsection
(iii) above, indemnify each Indemnitee for any and all expenses and
costs (including without limitation, remedial, removal, response,
abatement, cleanup, investigative, closure and monitoring costs),
losses, claims (including claims for contribution or indemnity and
including the cost of investigating or defending any claim and whether
or not such claim is ultimately defeated, and whether such claim arose
before, during or after any Credit Party's ownership, operation, pos
session or control of its business, property or facilities or before,
on or after the date hereof, and including also any amounts paid
incidental to any compromise or settlement by the Indemnitee or
Indemnitees to the holders of any such claim), lawsuits, liabilities,
obligations, actions, judgments, suits, disbursements, encumbrances,
liens, damages (including without limitation damages for contamination
or destruction of natural resources), penalties and fines of any kind
or nature whatsoever (including without limitation in all cases the
reasonable fees actually incurred, other charges and disbursements of
counsel in connection therewith) incurred, suffered or sustained by
that Indemnitee based upon, arising under or relating to Environmental
Laws based on, arising out of or relating to in whole or in part, the
existence or exercise of any rights or remedies by any Indemnitee
under this Agreement, any other Credit Document or any related
documents (but excluding those incurred, suffered or sustained by any
Indemnitee as a result of any action taken by or on behalf of the
Lenders with respect to any Subsidiary of Borrower (or the assets
thereof) owned or controlled by the Lenders.
If and to the extent that the obligations of Borrower under this Section
11.04 are unenforceable for any reason, Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.
Section 11.05. Right of Setoff. In addition to and not in
limitation of all rights of offset that any Lender or other holder of a
Note may have under applicable law, each Lender or other holder of a Note
shall, upon the occurrence of any Event of Default and whether or not such
Lender or such holder has made any demand or any Credit Party's obligations
are matured, have the right to appropriate and apply to the payment of any
Credit Party's obligations hereunder and under the other Credit Documents,
all deposits of any Credit Party (general or special, time or demand,
provisional or final) then or thereafter held by and other indebtedness or
property then or thereafter owing by such Lender or other holder to any
Credit Party, whether or not related to this Agreement or any transaction
hereunder. Each Lender shall promptly notify Borrower of any offset
hereunder.
Section 11.06. Benefit of Agreement.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of
the parties hereto, provided that Borrower may not assign or transfer any
of its interest hereunder without the prior written consent of the Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for
the account of, any of its branch offices or the office of an Affiliate of
such Lender.
(c) Each Lender may assign all or a portion of its interests,
rights and obligations under this Agreement (including all or a portion of
any of its Commitments and the Loans at the time owing to it and the Notes
held by it) to any Eligible Assignee; provided, however, that (i) the Agent
and Borrower must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld or delayed) unless such
assignment is an Affiliate of the assigning Lender, (ii) the amount of the
Commitments, in the case of the Revolving Loan Commitments and the Line of
Credit Commitments, or Loans, in the case of assignment of Loans, of the
assigning Lender subject to each assignment (determined as of the date the
assignment and acceptance with respect to such assignment is delivered to
the Agent) shall not be less than $5,000,000, and (iii) the parties to each
such assignment shall execute and deliver to the Agent an Assignment and
Acceptance, together with a Note or Notes subject to such assignment and,
unless such assignment is to an Affiliate of such Lender, a processing and
recordation fee of $2500. Borrower shall not be responsible for such
processing and recordation fee or any costs or expenses incurred by any
Lender or the Agent in connection with such assignment. From and after the
effective date specified in each Assignment and Acceptance, which effective
date shall be at least five (5) Business Days after the execution thereof,
the assignee thereunder shall be a party hereto and to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement. Notwithstanding the
foregoing, the assigning Lender must retain after the consummation of such
Assignment and Acceptance, a minimum aggregate amount of Commitments or
Loans, as the case may be, of $5,000,000; provided, however, no such
minimum amount shall be required with respect to any such assignment made
at any time there exists an Event of Default hereunder. Within five (5)
Business Days after receipt of the notice and the Assignment and
Acceptance, Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for the surrendered Note or Notes, a new Note or Notes
to the order of such assignee in a principal amount equal to the applicable
Commitments or Loans assumed by it pursuant to such Assignment and
Acceptance and new Note or Notes to the assigning Lender in the amount of
its retained Commitment or Commitments or amount of its retained Loans.
Such new Note or Notes shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Note or Notes, shall be
dated the date of the surrendered Note or Notes which they replace, and
shall otherwise be in substantially the form attached hereto.
(d) Each Lender may, without the consent of Borrower, the Agent,
sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including all
or a portion of its Commitments in the Loans owing to it and the Notes held
by it), provided, however, that (i) no Lender may sell a participation in
its aggregate Commitments or Loans (after giving effect to any permitted
assignment hereof) in an amount in excess of fifty percent (50%) of such
aggregate Commitments or Loans, provided, however, sales of participations
to an Affiliate of such Lender shall not be included in such calculation;
provided, however, no such maximum amount shall be applicable to any such
participation sold at any time there exists an Event of Default hereunder,
(ii) such Lender's obligations under this Agreement shall remain unchanged,
(iii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, and (iv) the participating
bank or other entity shall not be entitled to the benefit (except through
its selling Lender) of the cost protection provisions contained in Article
IV of this Agreement, and (v) Borrower and the Agent and other Lenders
shall continue to deal solely and directly with each Lender in connection
with such Lender's rights and obligations under this Agreement and the
other Credit Documents, and such Lender shall retain the sole right to
enforce the obligations of Borrower relating to the Loans and to approve
any amendment, modification or waiver of any provisions of this Agreement.
Any Lender selling a participation hereunder shall provide prompt written
notice to Borrower of the name of such participant.
(e) Any Lender or participant may, in connection with the
assignment or participation or proposed assignment or participation,
pursuant to this Section, disclose to the assignee or participant or
proposed assignee or participant any information relating to Borrower or
the other Consolidated Companies furnished to such Lender by or on behalf
of Borrower or any other Consolidated Company. With respect to any
disclosure of confidential, non-public, proprietary information, such
proposed assignee or participant shall agree to use the information only
for the purpose of making any necessary credit judgments with respect to
this credit facility and not to use the information in any manner
prohibited by any law, including without limitation, the securities laws of
the United States. The proposed participant or assignee shall agree not to
disclose any of such information except (i) to directors, employees,
auditors or counsel to whom it is necessary to show such information, each
of whom shall be informed of the confidential nature of the information,
(ii) in any statement or testimony pursuant to a subpoena or order by any
court, governmental body or other agency asserting jurisdiction over such
entity, or as otherwise required by law (provided prior notice is given to
Borrower and the Agent unless otherwise prohibited by the subpoena, order
or law), and (iii) upon the request or demand of any regulatory agency or
authority with proper jurisdiction. The proposed participant or assignee
shall further agree to return all documents or other written material and
copies thereof received from any Lender, the Agent or Borrower relating to
such confidential information unless otherwise properly disposed of by such
entity.
(f) Any Lender may at any time assign all or any portion of its
rights in this Agreement and the Notes issued to it to a Federal Reserve
Bank; provided that no such assignment shall release the Lender from any of
its obligations hereunder.
(g) If (i) any Taxes referred to in Section 4.07(b) have been
levied or imposed so as to require withholdings or deductions by Borrower
and payment by Borrower of additional amounts to any Lender as a result
thereof, (ii) any Lender shall make demand for payment of any material
additional amounts as compensation for increased costs pursuant to Section
4.10 or for its reduced rate of return pursuant to Section 4.16, or (iii)
any Lender shall decline to consent to a modification or waiver of the
terms of this Agreement or the other Credit Documents requested by
Borrower, then and in such event, upon request from Borrower delivered to
such Lender and the Agent, such Lender shall assign, in accordance with the
provisions of Section 11.06(c), all of its rights and obligations under
this Agreement and the other Credit Documents to another Lender or an
Eligible Assignee selected by Borrower, in consideration for the payment by
such assignee to the Lender of the principal of, and interest on, the
outstanding Loans accrued to the date of such assignment, and the
assumption of such Lender's Total Commitment hereunder, together with any
and all other amounts owing to such Lender under any provisions of this
Agreement or the other Credit Documents accrued to the date of such
assignment.
Section 11.07. Governing Law; Submission to Jurisdiction.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND UNDER THE NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF) OF THE STATE OF GEORGIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT, THE NOTES OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE
SUPERIOR COURT OF FULTON COUNTY, GEORGIA, OR ANY OTHER COURT OF THE STATE
OF GEORGIA OR OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF
GEORGIA, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, BORROWER HEREBY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY, AND BORROWER HEREBY IR
REVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) BORROWER HEREBY IRREVOCABLY DESIGNATES THE CORPORATION
SERVICE COMPANY, ATLANTA, GEORGIA, AS ITS DESIGNEE, APPOINTEE AND LOCAL
AGENT TO RECEIVE, FOR AND ON BEHALF OF BORROWER, SERVICE OF PROCESS IN SUCH
RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR THE NOTES OR ANY DOCUMENT RELATED THERETO. IT IS
UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH LOCAL AGENT WILL BE
PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE SERVER OF SUCH PROCESS BY
MAIL TO BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, BUT
THE FAILURE OF BORROWER TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY
THE SERVICE OF SUCH PROCESS. BORROWER FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION
OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO BORROWER AT ITS SAID ADDRESS, SUCH SERVICE TO BE
COME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) Nothing herein shall affect the right of the Agent, Agent,
any Lender, any holder of a Note or any Credit Party to serve process in
any other manner permitted by law or to commence legal proceedings or
otherwise proceed against Borrower in any other jurisdiction.
Section 11.08. Independent Nature of Lenders' Rights. The
amounts payable at any time hereunder to each Lender shall be a separate
and independent debt, and each Lender shall be entitled to protect and
enforce its rights pursuant to this Agreement and its Notes, and it shall
not be necessary for any other Lender to be joined as an additional party
in any proceeding for such purpose.
Section 11.09. Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
Section 11.10. Effectiveness; Survival.
(a) This Agreement shall become effective on the date (the
"Effective Date") on which all of the parties hereto shall have signed a
counterpart hereof (whether the same or different counterparts) and shall
have delivered the same to the Agent pursuant to Section 11.01 or, in the
case of the Lenders, shall have given to the Agent written or telex notice
(actually received) that the same has been signed and mailed to them.
(b) The obligations of Borrower under Sections 4.07(b), 4.10,
4.12, 4.13, 4.16, and 11.04 hereof shall survive for ninety (90) days after
the payment in full of the Notes after the Final Maturity Date. All
representations and warranties made herein, in the certificates, reports,
notices, and other documents delivered pursuant to this Agreement shall
survive the execution and delivery of this Agreement, the other Credit
Documents, and such other agreements and documents, the making of the Loans
hereunder, and the execution and delivery of the Notes.
Section 11.11. Severability. In case any provision in or
obligation under this Agreement or the other Credit Documents shall be
invalid, illegal or unenforceable, in whole or in part, in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 11.12. Independence of Covenants. All covenants
hereunder shall be given independent effect so that if a particular action
or condition is not permitted by any of such covenants, the fact that it
would be permitted by an exception to, or be otherwise within the
limitation of, another covenant, shall not avoid the occurrence of a
Default or an Event of Default if such action is taken or condition exists.
Section 11.13. Change in Accounting Principles, Fiscal Year or
Tax Laws. If (i) any preparation of the financial statements referred to
in Section 7.07 hereafter occasioned by the promulgation of rules,
regulations, pronouncements and opinions by or required by the Financial
Accounting Standards Board or the American Institute of Certified Public
Accounts (or successors thereto or agencies with similar functions) (other
than changes mandated by FASB 106) result in a material change in the
method of calculation of financial covenants, standards or terms found in
this Agreement, (ii) there is any change in Borrower's fiscal quarter or
fiscal year, or (iii) there is a material change in federal tax laws which
materially affects any of the Consolidated Companies' ability to comply
with the financial covenants, standards or terms found in this Agreement,
Borrower and the Required Lenders agree to enter into negotiations in order
to amend such provisions so as to equitably reflect such changes with the
desired result that the criteria for evaluating any of the Consolidated
Companies' financial condition shall be the same after such changes as if
such changes had not been made. Unless and until such provisions have been
so amended, the provisions of this Agreement shall govern.
Section 11.14. Headings Descriptive; Entire Agreement. The
headings of the several sections and subsections of this Agreement are
inserted for convenience only and shall not in any way affect the meaning
or construction of any provision of this Agreement. This Agreement, the
other Credit Documents, and the agreements and documents required to be
delivered pursuant to the terms of this Agreement constitute the entire
agreement among the parties hereto and thereto regarding the subject
matters hereof and thereof and supersede all prior agreements,
representations and understandings related to such subject matters.
Section 11.15. Time is of the Essence. Time is of the essence
in interpreting and performing this Agreement and all other Credit
Documents.
Section 11.16. Usury. It is the intent of the parties hereto
not to violate any federal or state law, rule or regulation pertaining
either to usury or to the contracting for or charging or collecting of
interest, and Borrower and Lenders agree that, should any provision of this
Agreement or of the Notes, or any act performed hereunder or thereunder,
violate any such law, rule or regulation, then the excess of interest
contracted for or charged or collected over the maximum lawful rate of
interest shall be applied to the outstanding principal indebtedness due to
Lenders by Borrower under this Agreement.
Section 11.17. Construction. Should any provision of this
Agreement require judicial interpretation, the parties hereto agree that
the court interpreting or construing the same shall not apply a presumption
that the terms hereof shall be more strictly construed against one party by
reason of the rule of construction that a document is to be more strictly
construed against the party who itself or through its agents prepared the
same, it being agreed that Borrower, the Agent, the Lenders and their
respective agents have participated in the preparation hereof.
Section 11.18. Effect of Amendment and Restatement. Upon the
effectiveness of this Agreement on the Closing Date pursuant to Section
5.01: (a) the terms and conditions of the Original Credit Agreement shall
be amended as set forth herein and, as so amended, shall be restated in
their entirety, but only with respect to the rights, duties and obligations
between the Lenders, the Agent, the Agent and Borrower accruing from and
after the Closing Date; (b) all "Revolving Loans" and "Line of Credit
Loans" outstanding under the Original Credit Agreement shall be deemed to
be Revolving Loans and Line of Credit Loans, respectively, outstanding
under this Agreement, but shall be allocated among the Lenders based on
their respective Pro Rata Shares of the Commitments set forth on the
signature pages to this Agreement; (c) all indemnification obligations of
Borrower under the Original Credit Agreement and other Credit Documents (as
defined in the Original Credit Agreement) shall survive the execution and
delivery of this Agreement and shall continue in full force and effect for
the benefit of Lenders and any other Person indemnified under the Original
Credit Agreement or any other Credit Document (as defined in the Original
Credit Agreement) at any time prior to the Closing Date; (d) the execution,
delivery and effectiveness of this Agreement shall not operate as a waiver
of any right, power or remedy of the Agent, the Agent or the Lenders under
the Original Credit Agreement, nor constitute a waiver of any covenant,
agreement or obligation under the Original Credit Agreement, except to the
extent that such covenant agreement or obligation is no longer set forth
herein or is modified hereby; and (e) any and all references in the Credit
Documents to the Original Credit Agreement shall, without further action of
the parties, be deemed a reference to the Original Credit Agreement, as
amended and restated by this Agreement, and as this Agreement shall be
further amended or amended and restated from time to time hereafter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered in Atlanta, Georgia, by their duly
authorized officers as of the day and year first above written.
BORROWER:
HUGHES SUPPLY, INC.
Address for Notices: /s/ J. Stephen Zepf
20 N. Orange Avenue J. Stephen Zepf
Suite 200 Treasurer
Orlando, Florida 32801
Attention: J. Stephen Zepf /s/ Benjamin P. Butterfield
Benjamin Butterfield
Secretary
[CORPORATE SEAL]
Address for Notices: SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION, individually and as
Agent
200 S. Orange Avenue
4th Floor By: /s/ Eric Waldron
Orlando, Florida 32802
Attn: Mr. Eric Waldron Title: First Vice President
By: ______________________________
Telecopy No. 407/237-6894 Title: ___________________________
Payment Office:
200 S. Orange Avenue
4th Floor
Orlando, Florida 32802
________________________________
Revolving Loan Commitment: $36,111,114
Pro Rata Share of Revolving Loan Commitment: 27.7778%
Line of Credit Commitment: $13,888,886
Pro Rata Share of Line of Credit Commitment: 27.7778%
Address for Notices: NATIONSBANK, N.A.
400 N. Ashley Drive, 2nd Fl. By: /s/ Miles C. Dearden III
Tampa, Florida 33602
Attn: Mr. Miles Dearden Title: Senior Vice President
Telecopy No. 813/224-5948
Payment Office:
NationsBank, N.A.
1 Independence Center
15th Floor
NCI-001-15-03
Charlotte, North Carolina 28255
Attn: Ms. Linda Dunlap
________________________________
Revolving Loan Commitment: $21,666,666
Pro Rata Share of Revolving Loan Commitment: 16.6667%
Line of Credit Commitment:$8,333,334
Pro Rata Share of Line of Credit Commitment: 16.6667%
Address for Notices: FIRST UNION NATIONAL BANK
20 N. Orange Avenue
Orlando, Florida 32801 By: /s/ Ed Graves
Attn: Ms. Mary Doonan
Title: Vice President
Telecopy No. 407/649-5732
Payment Office:
20 N. Orange Avenue
Orlando, Florida 32801
________________________________
Revolving Loan Commitment: $21,666,666
Pro Rata Share of Revolving Loan Commitment: 16.6667%
Line of Credit Commitment: $8,333,334
Pro Rata Share of Line of Credit Commitment: 16.6667%
Address for Notices: SOUTHTRUST BANK, NATIONAL
ASSOCIATION
150-2nd Avenue North,
Suite 470 By: /s/ Joseph Coleman
St. Petersburg, Florida 33701
Attn: Mr. Joseph Coleman Title: Vice President
Telecopy No. 813/898-5319
Payment Office:
420 North 20th Street
SE Banking, 9th Floor
Birmingham, Alabama 35203
________________________________
Revolving Loan Commitment: $25,277,777
Pro Rata Share of Revolving Loan Commitment: 19.4444%
Line of Credit Commitment: $9,722,223
Pro Rata Share of Line of Credit Commitment: 19.4444%
Address for Notices: BARNETT BANK, N.A.
390 North Orange Ave. By: /s/ Walt Ramsey
Suite 700
Orlando, FL 32802 Title: Vice President
Attn: Mr. Walt Ramsey
Telecopy No. (407) 420-2743
Payment Office:
707 Mendham Boulevard
Orlando, FL 32835
Attn: Rosanna Jacobsen
_______________________________
Revolving Loan Commitment: $14,444,444
Pro Rata Share of Revolving Loan Commitment: 11.1111%
Line of Credit Commitment: $5,555,556
Pro Rata Share of Line of Credit Commitment: 11.1111%
Address for Notices: PNC BANK, KENTUCKY, INC.
8th Floor By: /s/ James D. Neil
500 West Jefferson St.
Louisville, Kentucky 40202 Title: Vice President
Attn: Mr. Jim Neil
Telecopy No. (502) 581-2302
Payment Office:
8th Floor
500 West Jefferson St.
Louisville, Kentucky 40202
Attn: Mr. Jim Neil
________________________________
Revolving Loan Commitment: $10,833,333
Pro Rata Share of Revolving Loan Commitment: 8.3333%
Line of Credit Commitment: $4,166,667
Pro Rata Share of Line of Credit Commitment: 8.3333%
August 28, 1997
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
Hughes Supply, Inc., a Florida corporation (the "Company"),
agrees with you as follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of (i) Forty Million
Dollars ($40,000,000) aggregate principal amount of its 7.14% Senior Notes
due May 30, 2012 (the "Series A Notes") and (ii) Forty Million Dollars
($40,000,000) aggregate principal amount of its 7.19% Senior Notes due May
30, 2012 (the "Series B Notes"; the Series A Notes and the Series B Notes
shall be collectively referred to herein as the "Notes" and each referred
to herein as a "Note" and the term "Note" shall include any such notes
issued in substitution therefor pursuant to Section 13 of this Agreement or
the Other Agreements (as hereinafter defined)). The Notes shall be
substantially in the form set out in Exhibit 1, with such changes
therefrom, if any, as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined in Schedule B;
references to a "Schedule" or an "Exhibit" are, unless otherwise specified,
to a Schedule or an Exhibit attached to this Agreement.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company
will issue and sell to you and you will purchase from the Company, at the
Closing provided for in Section 3, Notes of a given Series in the principal
amounts specified opposite your respective names in Schedule A at the
purchase price of 100% of the principal amount thereof. Contemporaneously
with entering into this Agreement, the Company is entering into separate
Note Purchase Agreements (the "Other Agreements") identical with this
Agreement with each of the other purchasers named in Schedule A (the "Other
Purchasers"), providing for the sale at such Closing to each of the Other
Purchasers of Notes in the principal amount specified opposite its name in
Schedule A. Your respective obligations hereunder and the obligations of
the Other Purchasers under the Other Agreements are several and not joint
obligations and you shall have no obligation under any Other Agreement and
no liability to any Person for the performance or non-performance by any
Other Purchaser thereunder.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you and the
Other Purchasers shall occur at the offices of Alston & Bird LLP, 1201 West
Peachtree Street, Atlanta, Georgia, at 10:00 a.m., Atlanta time, at a
closing (the "Closing") on August 28, 1997, or on such other Business Day
thereafter as may be agreed upon by the Company and you and the Other
Purchasers. At the Closing the Company will deliver to you the Notes to be
purchased by you in the form of a single Note (or such greater number of
Notes in denominations of at least $500,000 as you may request) dated the
date of the Closing and registered in your name (or in the name of your
nominee), against delivery by you to the Company or its order of
immediately available funds in the amount of the purchase price therefor by
wire transfer of immediately available funds for the account of the Company
to account number 880-119-6331, Account Name: "Hughes Supply, Inc.", at
SunTrust Bank, Atlanta, Atlanta, Georgia, ABA #061000104. If at the
Closing the Company shall fail to tender such Notes to you as provided
above in this Section 3, or any of the conditions specified in Section 4
shall not have been fulfilled to your satisfaction, you shall, at your
election, be relieved of all further obligations under this Agreement,
without thereby waiving any rights you may have by reason of such failure
or such nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to
you at the Closing is subject to the fulfillment to your satisfaction,
prior to or at the Closing, of the following conditions:
4.1 Representations and Warranties.
The representations and warranties of the Company in this
Agreement shall be correct when made and at the time of the Closing.
4.2 Performance; No Default.
The Company shall have performed and complied with all agreements
and conditions contained in this Agreement required to be performed or
complied with by it prior to or at the Closing and after giving effect to
the issue and sale of the Notes (and the application of the proceeds
thereof as contemplated by Schedule 5.14) no Default or Event of Default
shall have occurred and be continuing. Neither the Company nor any
Subsidiary shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by Sections 10.1 through 10.10
hereof had such Sections applied since such date.
4.3 Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to
you an Officer's Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1, 4.2 and 4.9 have been
fulfilled.
(b) Secretary's Certificates. The Company and each Subsidiary
executing the Guarantee referenced in Section 4.11 shall have delivered to
you a certificate from the Secretary or an Assistant Secretary certifying
as to the resolutions attached thereto and other corporate proceedings
relating to the authorization, execution and delivery of, in the case of
the Company, the Notes and the Agreements and, in the case of such
Subsidiaries, the Guarantee and Contribution Agreement referenced in
Section 4.11.
4.4 Opinions of Counsel.
You shall have received opinions in form and substance
satisfactory to you, dated the date of the Closing (a) from Benjamin P.
Butterfield, General Counsel for the Company, covering the matters set
forth in Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably
request and (b) from Alston & Bird LLP, your special counsel in connection
with such transactions, covering the matters set forth in Exhibit 4.4(b)
and covering such other matters incident to such transactions as you may
reasonably request.
4.5 Purchase Permitted by Applicable Law, etc.
On the date of the Closing your purchase of Notes shall (i) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the
New York Insurance Law) permitting limited investments by insurance
companies without restriction as to the character of the particular
investment, (ii) not violate any applicable law or regulation (including,
without limitation, Regulation G, T or X of the Board of Governors of the
Federal Reserve System) and (iii) not subject you to any tax, penalty or
liability under or pursuant to any applicable law or regulation, which law
or regulation was not in effect on the date hereof. If requested by you,
you shall have received an Officer's Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine
whether such purchase is so permitted.
4.6 Sale of Other Notes.
Contemporaneously with the Closing, the Company shall sell to the
Other Purchasers and the Other Purchasers shall purchase the Notes to be
purchased by them at the Closing as specified in Schedule A.
4.7 Payment of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the Company
shall have paid on or before the Closing the reasonable fees, charges and
disbursements of your special counsel referred to in Section 4.4 to the
extent reflected in a statement of such counsel rendered to the Company at
least one Business Day prior to the Closing.
4.8 Private Placement Number.
A Private Placement number issued by Standard & Poor's CUSIP
Service Bureau (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners) shall have been obtained
for each Series of Notes.
4.9 Changes in Corporate Structure.
Except as specified in Schedule 4.9, the Company shall not have
changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part
of the liabilities of any other entity, at any time following the date of
the most recent financial statements referred to in Schedule 5.5.
4.10 Proceedings and Documents.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be satisfactory to you and
your special counsel, and you and your special counsel shall have received
all such counterpart originals or certified or other copies of such
documents as you or they may reasonably request.
4.11 Guarantees of Subsidiaries.
Each of the Material Subsidiaries specified in Schedule 4.11
shall have executed and delivered a Guarantee in the form set forth in
Exhibit 4.11(a) and the Company and each such Material Subsidiary shall
have executed and delivered a Contribution Agreement in the form set forth
in Exhibit 4.11(b).
4.12 Copy of Bank Credit Agreement.
The Company shall have delivered to each Purchaser a copy of the
Bank Credit Agreement, including all amendments thereto, certified as true
and correct by a Senior Financial Officer.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1 Organization; Power and Authority.
The Company is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation, and
is duly qualified as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company has the corporate
power and authority to own or hold under lease the properties it purports
to own or hold under lease, to transact the business it transacts and
proposes to transact, to execute and deliver this Agreement and the Other
Agreements and the Notes and to perform the provisions hereof and thereof.
5.2 Authorization, etc.
This Agreement and the Other Agreements and the Notes have been
duly authorized by all necessary corporate action on the part of the
Company, and this Agreement constitutes, and upon execution and delivery
thereof each Note will constitute, a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
5.3 Disclosure.
The Company, through its agent, SunTrust Capital Markets, Inc.,
has delivered to you and each Other Purchaser a copy of a Private Placement
Memorandum, dated July 24, 1997 (the "Memorandum"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal
properties of the Company and its Subsidiaries. Except as disclosed in
Schedule 5.3, this Agreement, the Memorandum, the documents, certificates
or other writings delivered to you by or on behalf of the Company in
connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.5, taken as a whole, do not contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the
Memorandum or as expressly described in Schedule 5.3, or in one of the
documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since January 31, 1997, there
has been no change in the financial condition, operations, business,
properties or prospects of the Company or any Subsidiary except changes
that individually or in the aggregate could not reasonably be expected to
have a Material Adverse Effect. There is no fact known to the Company that
could reasonably be expected to have a Material Adverse Effect that has not
been set forth herein or in the Memorandum or in the other documents,
certificates and other writings delivered to you by or on behalf of the
Company specifically for use in connection with the transactions
contemplated hereby.
5.4 Organization and Ownership of Shares of Subsidiaries; Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its organization,
and the percentage of shares of each class of its capital stock or similar
equity interests outstanding owned by the Company and each other
Subsidiary, (ii) of the Company's Affiliates and (iii) of the Company's
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being owned by
the Company and its Subsidiaries have been validly issued, are fully paid
and nonassessable and are owned by the Company or another Subsidiary free
and clear of any Lien (except as otherwise disclosed in Schedule 5.4). All
of the entities set forth in Schedule 5.4 are Consolidated. Schedule 4.11
sets forth all Material Subsidiaries of the Company as of the date hereof.
(c) Each Subsidiary identified in Schedule 5.4 is a corporation
or other legal entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly qualified
as a foreign corporation or other legal entity and is in good standing in
each jurisdiction in which such qualification is required by law, other
than those jurisdictions as to which the failure to be so qualified or in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each such Subsidiary has the
corporate or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact. The Guarantee and
Contribution Agreement to be executed and delivered by each Material
Subsidiary referenced in Section 4.11 have been duly authorized by all
necessary corporate action on the part of each such Material Subsidiary and
such Guarantee and Contribution Agreement will constitute a legal, valid
and binding obligation of such Material Subsidiary enforceable against such
Material Subsidiary except as such enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d) No Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the
agreements listed on Schedule 5.4 and customary limitations imposed by
corporate law statutes) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits
to the Company or any of its Subsidiaries that owns outstanding shares of
capital stock or similar equity interests of such Subsidiary.
5.5 Financial Statements.
The Company has delivered to each Purchaser copies of the
financial statements of the Company and its Subsidiaries listed on Schedule
5.5. All of said financial statements (including in each case the related
schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of
the respective dates specified in such Schedule and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently
applied throughout the periods involved except as set forth in the notes
thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).
5.6 Compliance With Laws, Other Instruments, etc.
The execution, delivery and performance by the Company of this
Agreement and the Notes and by the Material Subsidiaries referenced in
Section 4.11 of the Guarantee and Contribution Agreement referenced therein
will not (i) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of
the Company or any Subsidiary under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate charter or by-
laws, or any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or any of
their respective properties may be bound or affected, (ii) conflict with or
result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary or (iii) violate any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Company or any Subsidiary.
5.7 Governmental Authorizations, etc.
No consent, approval or authorization of, or registration, filing
or declaration with, any Governmental Authority is required in connection
with the execution, delivery or performance by the Company of this
Agreement or the Notes or of the Guarantee and the Contribution Agreement
referenced in Section 4.11 by the Material Subsidiaries referenced therein.
5.8 Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 5.8, there are no actions,
suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary or any
property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by which
it is bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority or is in violation of any applicable
law, ordinance, rule or regulation (including without limitation
Environmental Laws) of any Governmental Authority, which default or
violation, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
5.9 Taxes.
The Company and its Subsidiaries have filed all tax returns that
are required to have been filed in any jurisdiction, and have paid or
reflected appropriate reserves and/or accruals on it balance sheets for,
all taxes, including federal, state, local, sales, use, VAT, customs,
excise, franchise, assets, ad valorem withholding taxes, duties or levies
(collectively "Taxes"), except for any taxes and assessments (i) the amount
of which is not individually or in the aggregate Material or (ii) the
amount, applicability or validity of which is currently being contested in
good faith by appropriate proceedings and with respect to which the Company
or a Subsidiary, as the case may be, has established adequate reserves in
accordance with GAAP. The Company knows of no basis for any other tax or
assessment that could reasonably be expected to have a Material Adverse
Effect. The charges, accruals and reserves on the books of the Company and
its Subsidiaries in respect of federal, state or other Taxes for all fiscal
periods are adequate. The federal income tax returns liabilities of the
Company and its Subsidiaries have been audited by the Internal Revenue
Service for all fiscal years up to and including the fiscal year ended 1989
and any resulting deficiencies, additional assessments, fines, penalties,
interest or other charge have either been paid for or adequately reserved
for in the financial statements. Other than certain ordinary course audits
of state sales and income tax returns, neither the Company nor any
Subsidiary is presently under, nor has any of them received notice of, any
investigation or audit by any national, regional, provincial, local or
other agency concerning any fiscal year or period ended prior to the date
hereof. All taxes required to be withheld from employees of the Company
and its Subsidiaries for income and social security taxes have been
properly withheld.
5.10 Title to Property; Leases.
The Company and its Subsidiaries have good and sufficient title
to their respective owned properties that individually or in the aggregate
are Material, including all such properties reflected in the most recent
audited balance sheet referred to in Section 5.5 or purported to have been
acquired by the Company or any Subsidiary after said date (except as sold
or otherwise disposed of in the ordinary course of business), in each case
free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and
are in full force and effect in all material respects.
5.11 Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights,
service marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known conflict
with the rights of others;
(b) to the best knowledge of the Company, no product of the
Company infringes in any material respect any license, permit,
franchise, authorization, patent, copyright, service mark, trademark,
trade name or other right owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Company or
any of its Subsidiaries.
5.12 Compliance With ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for
such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and
no event, transaction or condition has occurred or exists that could
reasonably be expected to result in the incurrence of any such liability by
the Company or any ERISA Affiliate, or in the imposition of any Lien on any
of the rights, properties or assets of the Company or any ERISA Affiliate,
in either case pursuant to Title I or IV of ERISA or to such penalty or
excise tax provisions or to Section 401(a)(29) or 412 of the Code, other
than such liabilities or Liens as would not be individually or in the
aggregate Material.
(b) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(c) The expected postretirement benefit obligation (determined
as of the last day of the Company's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the Company and its Subsidiaries
is not Material.
(d) The execution and delivery of this Agreement and the
issuance and sale of the Notes hereunder will not involve any transaction
that is subject to the prohibitions of section 406 of ERISA or in
connection with which a tax could be imposed pursuant to
section 4975(c)(1)(A)-(D) of the Code. The representation by the Company
in the first sentence of this Section 5.12(d) is made in reliance upon and
subject to (i) the accuracy of your representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be
purchased by you and (ii) the assumption, made solely for the purpose of
making such representation, that Department of Labor Interpretive Bulletin
75-2 with respect to prohibited transactions remains valid in the
circumstances of the transactions contemplated herein.
5.13 Private Offering by the Company.
Neither the Company nor anyone acting on its behalf has offered
the Notes or any similar securities for sale to, or solicited any offer to
buy any of the same from, or otherwise approached or negotiated in respect
thereof with, any person other than you, the Other Purchasers and not more
than 50 other Institutional Investors, each of which has been offered the
Notes at a private sale for investment. Neither the Company, nor, to the
best knowledge of the Company, anyone acting on its behalf has taken, or
will take, any action that would subject the issuance or sale of the Notes
to the registration requirements of Section 5 of the Securities Act.
5.14 Use of Proceeds; Margin Regulations.
The Company will apply the proceeds of the sale of the Notes as
set forth in Schedule 5.14. No part of the proceeds from the sale of the
Notes hereunder will be used, directly or indirectly, for the purpose of
buying or carrying any margin stock within the meaning of Regulation G of
the Board of Governors of the Federal Reserve System (12 CFR 207), or for
the purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of
said Board (12 CFR 224) or to involve any broker or dealer in a violation
of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 5% of the value of the Consolidated Assets of the
Company and its Subsidiaries and the Company does not have any present
intention that margin stock will constitute more than 5% of the value of
such assets. As used in this Section, the terms "margin stock" and
"purpose of buying or carrying" shall have the meanings assigned to them in
said Regulation G.
5.15 Existing Debt; Future Liens.
(a) Except as described therein, Schedule 5.15 sets forth a
complete and correct list of all outstanding Debt of the Company and its
Subsidiaries as of August 27, 1997, since which date there has been no
Material change in the amounts, interest rates, sinking funds, installment
payments or maturities of the Debt of the Company or its Subsidiaries.
Neither the Company nor any Subsidiary is in default and no waiver of
default is currently in effect, in the payment of any principal or interest
on any Debt of the Company or such Subsidiary and no event or condition
exists with respect to any Debt of the Company or any Subsidiary that would
permit (or that with notice or the lapse of time, or both, would permit)
one or more Persons to cause such Debt to become due and payable before its
stated maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company
nor any Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property,
whether now owned or hereafter acquired, to be subject to a Lien not
permitted by Section 10.5.
5.16 Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor its
use of the proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
any enabling legislation or executive order relating thereto.
5.17 Status Under Certain Statutes.
Neither the Company nor any Subsidiary is subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility
Holding Company Act of 1935, as amended, the Interstate Commerce Act, as
amended, or the Federal Power Act, as amended.
5.18 Environmental Matters.
Neither the Company nor any Subsidiary has knowledge of any claim
or has received any notice of any claim, and no proceeding has been
instituted raising any claim against the Company or any of its Subsidiaries
or any of their respective real properties now or formerly owned, leased or
operated by any of them or other assets, alleging any damage to the
environment or violation of any Environmental Laws, except, in each case,
such as could not reasonably be expected to result in a Material Adverse
Effect. Except as otherwise disclosed to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would give rise to any claim, public or private,
of violation of Environmental Laws or damage to the environment
emanating from, occurring on or in any way related to real
properties now or formerly owned, leased or operated by any of
them or to other assets or their use, except, in each case, such
as could not reasonably be expected to result in a Material
Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has
stored any Hazardous Materials on real properties now or formerly
owned, leased or operated by any of them and has not disposed of
any Hazardous Materials in a manner contrary to any Environmental
Laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased
or operated by the Company or any of its Subsidiaries are in
compliance with applicable Environmental Laws, except where
failure to comply could not reasonably be expected to result in a
Material Adverse Effect.
6. REPRESENTATIONS OF THE PURCHASER.
6.1 Purchase for Investment.
You represent that you are purchasing the Notes for your own
account or for one or more separate accounts maintained by you or for the
account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of your or their
property shall at all times be within your or their control. You
understand that the Notes have not been registered under the Securities Act
and may be resold only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration is available, except
under circumstances where neither such registration nor such an exemption
is required by law, and that the Company is not required to register the
Notes.
6.2 Source of Funds.
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used
by you to pay the purchase price of the Notes to be purchased by you
hereunder:
(a) if you are an insurance company, the Source does not include
assets allocated to any separate account maintained by you in which
any employee benefit plan (or its related trust) has any interest,
other than a separate account that is maintained solely in connection
with your fixed contractual obligations under which the amounts
payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of Prohibited Transaction
Exemption ("PTE") 90-1 (issued January 29, 1990), or (ii) a bank
collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except as you have disclosed to the
Company in writing pursuant to this paragraph (b), no employee benefit
plan or group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets allocated
to such pooled separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning
of Part V of the QPAM Exemption), no employee benefit plan's assets
that are included in such investment fund, when combined with the
assets of all other employee benefit plans established or maintained
by the same employer or by an affiliate (within the meaning of Section
V(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of Part I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
person controlling or controlled by the QPAM (applying the definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Company and (i) the identity of such QPAM and (ii) the
names of all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in writing pursuant
to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have
the respective meanings assigned to such terms in Section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
7.1 Financial and Business Information.
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than
the last quarterly fiscal period of each such fiscal year), duplicate
copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second and
third quarters) for the portion of the fiscal year ending with
such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments;
provided that delivery within the time period specified above of
copies of the Company's Quarterly Report on Form 10-Q prepared in
compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a) so long as such requirements of
the Securities and Exchange Commission continue to require that Form
10-Q include the financial statements described in subparagraphs (i)
and (ii) above;
(b) Annual Statements -- within 105 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by:
(A) an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state
that such financial statements present fairly, in all material
respects, the financial position of the companies being reported upon
and their results of operations and cash flows and have been prepared
in conformity with GAAP, and that the examination of such accountants
in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances;
(B) a certificate of such accountants stating that
they have reviewed this Agreement and stating further whether, in
making their audit, they have become aware of any condition or event
that then constitutes a Default or an Event of Default, and, if they
are aware that any such condition or event then exists, specifying the
nature and period of the existence thereof (it being understood that
such accountants shall not be liable, directly or indirectly, for any
failure to obtain knowledge of any Default or Event of Default unless
such accountants should have obtained knowledge thereof in making an
audit in accordance with generally accepted auditing standards or did
not make such an audit);
provided, that the delivery within the time period specified above of
the Company's Annual Report on Form 10-K for such fiscal year
(together with the Company's annual report to shareholders, if any,
prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in
accordance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(b) so long as such requirements of
the Securities and Exchange Commission continue to require that Form
10-K include the financial statements described in subparagraphs (i)
and (ii) above.
(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic
report, each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary with the
Securities and Exchange Commission and of all press releases and other
statements made available generally by the Company or any Subsidiary
to the public concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in
any event within five days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person
has given any notice or taken any action with respect to a claimed
default hereunder or that any Person has given any notice or taken any
action with respect to a claimed default of the type referred to in
Section 11(f), a written notice specifying the nature and period of
existence thereof and what action the Company is taking or proposes to
take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five days
after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if
any, that the Company or an ERISA Affiliate proposes to take with
respect thereto:
(i) with respect to any Plan, any reportable event, as
defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived pursuant
to such regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan, or the receipt by the
Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty
or excise tax provisions of the Code relating to employee benefit
plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or such penalty or excise tax
provisions, if such liability or Lien, taken together with any
other such liabilities or Liens then existing, could reasonably
be expected to have a Material Adverse Effect; or
(iv) if at any time the aggregate "amount of unfunded
benefit liabilities" (within the meaning of section 4001(a)(18)
of ERISA) under all Plans, determined in accordance with Title IV
of ERISA, shall exceed $1,000,000;
(f) Notices From Governmental Authority -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material
Adverse Effect;
(g) New Material Subsidiaries -- within 60 days after the end of
each quarterly fiscal period in each fiscal year of the Company in
which a Material Subsidiary has been formed or acquired, or any other
event resulting in the creation of a new Material Subsidiary, notice
of the formation or acquisition of such Material Subsidiary or such
occurrence, including a description of the assets of such entity, the
activities in which it will be engaged, and such other information as
an Institutional Investor may request;
(h) Bank Credit Agreement -- promptly, and in any event within
30 days after the execution thereof, a copy of each amendment of,
other modification to, or waiver granted under, the Bank Credit
Agreement.
(i) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes.
7.2 Officer's Certificate.
Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was
in compliance with the requirements of Sections 10.1, 10.2, 10.3,
10.4, 10.5, 10.6 and 10.8 inclusive, during the quarterly or annual
period covered by the statements then being furnished (including with
respect to each such Section, where applicable, the calculations of
the maximum or minimum amount, ratio or percentage, as the case may
be, permissible under the terms of such Sections, and the calculation
of the amount, ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall
not have disclosed the existence during such period of any condition
or event that constitutes a Default or an Event of Default or, if any
such condition or event existed or exists, specifying the nature and
period of existence thereof and what action the Company shall have
taken or proposes to take with respect thereto.
7.3 Inspection.
The Company shall permit the representatives of each holder of
Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists,
at the expense of such holder and upon reasonable prior notice to the
Company, to visit the principal executive office of the Company, to
discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in
writing; and
(b) Default -- if a Default or Event of Default then exists, at
the expense of the Company to visit and inspect any of the offices or
properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and
independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and
accounts of the Company and its Subsidiaries), all at such times and
as often as may be requested.
8. PREPAYMENT OF THE NOTES.
8.1(A) Series A Required Prepayments.
On May 30, 2002 and on each November 30 and May 30 thereafter to
and including November 30, 2011, the Company will prepay $1,904,762, and on
May 30, 2012 the Company will make a final payment of $1,904,760, of
principal amount (or such amount as shall be the remaining outstanding
principal amount) of the Series A Notes at par and without payment of the
Make-Whole Amount or any premium, provided that upon any partial prepayment
of Series A Notes pursuant to Section 8.2 or purchase of Series A Notes
permitted by Section 8.5 the principal amount of each required prepayment
of Series A Notes becoming due under this Section 8.1(A) on and after the
date of such prepayment or purchase shall be reduced in the same proportion
as the aggregate unpaid principal amount of Series A Notes is reduced as a
result of such prepayment or purchase.
8.1(B) Series B Required Prepayments.
On May 30, 2006 and on each November 30 and May 30 thereafter to
and including November 30, 2011, the Company will prepay $3,076,923, and on
May 30, 2012 the Company will make a final payment of $3,076,924, of
principal amount (or such amount as shall be the remaining principal
amount) of the Series B Notes at par and without payment of the Make-Whole
Amount or any premium, provided that upon any partial prepayment of Series
B Notes pursuant to Section 8.2 or purchase of Series B Notes permitted by
Section 8.5 the principal amount of each required prepayment of Series B
Notes becoming due under this Section 8.1(B) on and after the date of such
prepayment or purchase shall be reduced in the same proportion as the
aggregate unpaid principal amount of Series B Notes is reduced as a result
of such prepayment or purchase.
8.2 Optional Prepayments With Make-Whole Amount.
The Company may, at its option, upon notice as provided below,
prepay the Notes in whole at any time, or from time to time in part in an
amount not less than $5,000,000, at 100% of the principal amount so prepaid
plus all accrued interest on the principal amount of Notes so prepaid, plus
the Make-Whole Amount determined for the prepayment date with respect to
such principal amount. Any such optional payment shall be on a Business
Day and the Company will give each holder of Notes written notice of each
optional prepayment under this Section 8.2 not less than 30 days and not
more than 60 days prior to the Business Day fixed for such prepayment.
Each such notice shall specify such date, the aggregate principal amount of
the Notes to be prepaid on such date, the principal amount of each Note
held by such holder to be prepaid (determined in accordance with Section
8.3), and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid, and shall be accompanied by a
certificate of a Senior Financial Officer as to the estimated Make-Whole
Amount due in connection with such prepayment (calculated as if the date of
such notice were the date of the prepayment), setting forth the details of
such computation. Two Business Days prior to such prepayment, the Company
shall deliver to each holder of Notes a certificate via facsimile
transmission of a Senior Financial Officer specifying the calculation of
such Make-Whole Amount as of the specified prepayment date.
8.3 Allocation of Partial Prepayments.
In the case of any partial prepayment of the Notes, the principal
amount of the Notes to be prepaid shall be allocated among all Notes of
both Series then outstanding in proportion, as nearly as practicable, to
the respective unpaid principal amounts of all such Notes not theretofore
called for prepayment.
8.4 Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this Section
8, the principal amount of each Note to be prepaid shall mature and become
due and payable on the date fixed for such prepayment, together with
interest on such principal amount accrued to such date and the applicable
Make-Whole Amount, if any. From and after such date, unless the Company
shall fail to pay such principal amount when so due and payable, together
with the interest and Make-Whole Amount, if any, as aforesaid, interest on
such principal amount shall cease to accrue. Any Note paid or prepaid in
full shall be surrendered to the Company and cancelled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid principal
amount of any Note.
8.5 Purchase of Notes.
The Company will not, and will not permit any Affiliate to,
purchase redeem, prepay or otherwise acquire, directly or indirectly, any
of the outstanding Notes except upon the payment or prepayment of the Notes
in accordance with the terms of this Agreement and the Notes. The Company
will promptly cancel all Notes acquired by it or any Affiliate pursuant to
any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for
any such Notes.
8.6 Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the
Remaining Scheduled Payments with respect to the Called Principal of such
Note over the amount of such Called Principal, provided that the Make-Whole
Amount may in no event be less than zero. For the purposes of determining
the Make-Whole Amount, the following terms have the following meanings:
"Called Principal" means, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to Section 8.2 or has
become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal
of any Note, 0.50% plus the yield to maturity implied by (i) the
yields reported (offer side), as of 10:00 A.M. (New York City time) on
the second Business Day preceding the Settlement Date with respect to
such Called Principal, on the display designated as "Page 500" on the
Telerate Access Service (or such other display as may replace Page 500
on Telerate Access Service) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date, or (ii) if such
yields are not reported as of such time or the yields reported as of
such time are not ascertainable, the Treasury Constant Maturity Series
Yields reported, for the latest day for which such yields have been so
reported as of the second Business Day preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical
Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of
such Settlement Date. Such implied yield in (i) and (ii) above will
be determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the maturity closest to
and greater than the Remaining Average Life and (2) the actively
traded U.S. Treasury security with the maturity closest to and less
than the Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with respect to
such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called
Principal were made prior to its scheduled due date, provided that if
such Settlement Date is not a date on which interest payments are due
to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
9.1 Compliance With Law.
The Company shall and shall cause each of its Subsidiaries to
comply with all laws, ordinances or governmental rules or regulations to
which each of them is subject, including, without limitation, Environmental
Laws, and shall obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the
ownership of their respective properties or to the conduct of their
respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations
could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
9.2 Insurance.
The Company shall and shall cause each of its Subsidiaries to
maintain, with financially sound and reputable insurers, insurance with
respect to their respective properties and businesses against such
casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is customary in
the case of entities of established reputations engaged in the same or a
similar business and similarly situated.
9.3 Maintenance of Properties.
The Company shall and shall cause each of its Subsidiaries to
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary
wear and tear), so that the business carried on in connection therewith may
be properly conducted at all times, provided that this Section shall not
prevent the Company or any Subsidiary from discontinuing the operation and
the maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and the Company has concluded that
such discontinuance could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
9.4 Payment of Taxes and Claims.
The Company shall and shall cause each of its Subsidiaries to
file all tax returns required to be filed in any jurisdiction and to pay
and discharge all taxes shown to be due and payable on such returns and all
other taxes, assessments, governmental charges, or levies imposed on them
or any of their properties, assets, income or franchises, to the extent
such taxes and assessments have become due and payable and before they have
become delinquent and all claims for which sums have become due and payable
that have or might become a Lien on properties or assets of the Company or
any Subsidiary, provided that neither the Company nor any Subsidiary need
pay any such tax or assessment or claims if (i) the amount, applicability
or validity thereof is contested by the Company or such Subsidiary on a
timely basis in good faith and in appropriate proceedings, and the Company
or a Subsidiary has established adequate reserves therefor in accordance
with GAAP on the books of the Company or such Subsidiary or (ii) the
nonpayment of all such taxes and assessments in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
9.5 Corporate Existence, etc.
The Company shall at all times preserve and keep in full force
and effect its corporate existence. Subject to Sections 10.7 and 10.8, the
Company shall at all times preserve and keep in full force and effect the
corporate existence of each of its Subsidiaries (unless merged into the
Company or a Subsidiary) and all rights and franchises of the Company and
its Subsidiaries unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and effect
such corporate existence, right or franchise could not, individually or in
the aggregate, have a Material Adverse Effect.
9.6 Covenant To Secure Notes Equally.
The Company covenants that, if it or any Subsidiary shall create
or assume any Lien upon any of its property or assets, whether now owned or
hereafter acquired, other than Liens permitted by the provisions of Section
10.5 and 10.6 hereof (unless prior written consent to the creation or
assumption thereof shall have been obtained pursuant to Section 17), the
Company will make or cause to be made effective provision whereby the Notes
will be secured by such Lien equally and ratably with any and all other
Debt thereby secured so long as any such other Debt shall be so secured.
This Section 9.6 shall not be deemed a consent to any Lien or Liens not
otherwise permitted by Section 10.5 or Section 10.6.
9.7 Covenant Relating to Subsidiary Guarantees.
Within 60 days after the end of each quarterly fiscal period in
each fiscal year of the Company after: (i) the formation or acquisition of
any Material Subsidiary not listed on Schedule 4.11; (ii) the transfer of
assets from the Company or any Subsidiary to another Subsidiary and as a
result thereof the recipient of such assets becomes a Material Subsidiary;
or (iii) the occurrence of any other event creating a new Material
Subsidiary, the Company shall cause to be executed and delivered a
guarantee of the obligations of the Company hereunder and under the Notes
from such Material Subsidiary in substantially the form of Exhibit 4.11(a)
and a Contribution Agreement from such Material Subsidiary in substantially
the form of Exhibit 4.11(b), together with an opinion of counsel of the
General Counsel to the Company covering the matters described in
Section 5.4(c), and copies of any accompanying resolutions of the board of
directors of such Material Subsidiaries, good standing certificates and the
like, all in form and substance satisfactory to your special counsel.
9.8 Ownership of Subsidiary Guarantors.
The Company shall maintain its percentage of ownership existing
as of the date hereof of all Material Subsidiaries that execute the
Guarantee referenced in Section 4.11, and shall not decrease its ownership
percentage in each Material Subsidiary that executes a Guarantee pursuant
to Section 9.7 after the date hereof, as such ownership exists at the time
such Subsidiary so executes such Guarantee.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
10.1 Funded Debt.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, create, incur, assume, guarantee, or otherwise
become directly or indirectly liable with respect to any Funded Debt
unless, on the date the Company or such Subsidiary becomes liable with
respect to such Debt and immediately after giving effect thereto and the
concurrent retirement of any other Debt, (i) no Default or Event of Default
exists and (ii) Consolidated Funded Debt outstanding at such time does not
exceed 60% of Consolidated Total Capitalization at such time. For purposes
of this Section 10.1, any Person becoming a Subsidiary after the date
hereof shall be deemed, at the time it becomes a Subsidiary, to have
incurred all of its then outstanding Debt, and any Person extending,
renewing or refunding any Debt shall be deemed to have incurred such Debt
at the time of such extension, renewal or refunding.
10.2 Current Debt.
Neither the Company nor any Subsidiary shall at any time have or
suffer to exist Current Debt unless, during the preceding 365-day period,
there shall be at least 45 consecutive days on each of which there shall
have been no Consolidated Current Debt outstanding in excess of the amount
of additional Funded Debt that the Company would have been permitted to
incur on each such day under Section 10.1.
10.3 Minimum Net Worth.
The Company shall not permit Consolidated Net Worth to be less
than $170,000,000 at any time.
10.4 Restricted Payments.
The Company shall not:
(i) pay or declare any cash dividend on account of or with
respect to any Capital Stock or make any other cash distribution on
account of or with respect to any class of its Capital Stock; or
(ii) redeem, purchase or otherwise acquire, directly or
indirectly, any shares of the Company's Capital Stock
(all of the foregoing described in these subparagraphs (i) and (ii) hereof
being herein called "Restricted Payments") unless (A) the aggregate amount
of all Restricted Payments made since January 26, 1996 would not exceed the
sum of (x) $40,000,000 plus (y) 60% of cumulative Consolidated Net Income
since January 26, 1996 (less 100% of cumulative Consolidated Net Income
incurred for such period if such Consolidated Net Income for such period is
a loss) plus (z) the aggregate net cash proceeds of any issuance or sale of
the Company's Capital Stock and (B) no Default or Event of Default shall
have occurred and be continuing, or a Default or Event of Default would
occur, as a result of such Restricted Payment.
10.5 Liens.
The Company shall not, and shall not permit any Subsidiary to,
create, assume or suffer to exist any Lien upon any of its property or
assets, whether now owned or hereafter acquired except:
(i) Liens existing on the Date of Closing and specified on
Schedule 10.5;
(ii) any Lien on property acquired, constructed or improved by
the Company after the date hereof to secure or provide for all or a
portion of the purchase price of such property or a portion of the
indebtedness of such property provided (A) any such Lien shall extend
solely to the item or items of such property so acquired or
constructed and, if required by the terms of the instrument originally
creating such Lien, other property which is an improvement to or is
acquired for specific use in connection with such acquired or
constructed property or which is real property being improved by such
acquired or constructed property, (B) the principal amount of the Debt
secured by any such Lien shall at no time exceed an amount equal to
the lesser of (1) the cost to the Company or such Subsidiary of the
property so acquired or constructed and (2) the Fair Market Value of
such property at the time of such acquisition or construction and (C)
any such Lien shall be created contemporaneously with, or within 180
days after, the acquisition or construction of such property;
(iii) Liens (A) for taxes (including ad valorem and property
taxes) and assessments or governmental charges or levies not yet due
or (B) for taxes due or (C) resulting from any judgment or award, and
in the case of clause (B) and (C), are being actively contested in
good faith by appropriate proceedings and with respect to which
adequate reserves are being maintained;
(iv) landlord liens and statutory liens of carriers,
warehousemen, mechanics, material men and other liens imposed by law,
created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings or
with respect to which adequate reserves are being maintained, and
which were not incurred in connection with the borrowing of money;
(v) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return of
money bonds and similar obligations;
(vi) easements, rights-of-way, zoning and similar restrictions
and other similar charges or encumbrances not materially interfering
with the ordinary conduct of the business of the Company or any of its
Subsidiaries;
(vii) other Liens incidental to the conduct of its business
or the ownership of its property and assets which were not incurred in
connection with the borrowing of money, and which do not in the
aggregate materially detract from the value of property or assets of
the Company and its Subsidiaries taken as a whole or materially impair
the use of such property or assets in the operation of the business of
the Company or any of its Subsidiaries;
(viii) Liens provided for in equipment leases that are not
Capitalized Lease Obligations (including financing statements and
undertakings to file financing statements); provided that they are
limited to the equipment subject to such leases and the proceeds
thereof;
(ix) leases, subleases, licenses and sublicenses granted to third
parties not interfering in any material respect with the business of
the Company or any of its Subsidiaries;
(x) any lien renewing, extending, or refunding any Lien
described in subparagraphs (i) through (ix) above, provided that the
principal amount secured is not increased and that such lien is not
extended to other property (other than pursuant to its original
terms);
(xi) Liens on property or assets of a Subsidiary of the Company
to secure obligations of such Subsidiary to the Company or another
Wholly-Owned Subsidiary;
(xii) any right of set off or banker's lien (whether by
common law, statute, contract or otherwise) in favor of any bank
(other than Liens securing Debt); and
(xiii) Liens of any Subsidiary that arose prior to the time
that such Subsidiary became a Subsidiary of the Company, provided that
(A) any such Lien was not incurred in anticipation of such
acquisition, (B) the assets of such acquired Subsidiary subject to
such Lien shall only be those assets subject to such Lien at the time
of the closing of the acquisition of such Subsidiary and (C) the
principal amount of Debt secured by such Lien shall not exceed the
amount of Debt so secured by such Lien at the time of the closing of
the acquisition of such Subsidiary; and
(xiv) Liens securing Priority Debt described in clause (ii)
of the definition of Priority Debt; provided, however, that after
giving effect to the Debt secured by such Liens, Priority Debt shall
not exceed 20% of Consolidated Net Worth at any time.
10.6 Priority Debt.
The Company will not at any time permit Priority Debt to exceed
20% of Consolidated Net Worth.
10.7 Merger or Consolidation.
The Company shall not, and shall not permit any Subsidiary to,
merge consolidate or exchange shares with any other Person, except that:
(i) any Subsidiary may merge or consolidate with and into the
Company or with a Subsidiary that is a Wholly-Owned Subsidiary or if
not a Wholly-Owned Subsidiary in which the ownership interest of the
Company is not reduced or diluted in connection with or as a result of
such merger or consolidation; and
(ii) the Company may merge or consolidate with any other
corporation so long as:
(A) the surviving corporation shall be the Company or
another corporation organized under the laws of the United States or a
State thereof or the District of Columbia;
(B) the surviving corporation (if not the Company) shall
assume the obligations of the Company hereunder pursuant to an
agreement reasonably acceptable to the Required Holders;
(C) immediately after giving effect to such merger or
consolidation, no Default or Event of Default shall have occurred or
exist; and
(D) immediately after giving effect to such merger or
consolidation, the Company (or the surviving corporation, if not the
Company) could incur at least $1 of Funded Debt under Section 10.1;
and
(iii) the Company and any Subsidiary or Affiliate may acquire
any other Person provided such acquisition does not otherwise result
in an Event of Default hereunder.
10.8 Sale of Assets.
The Company will not, and will not permit any Subsidiary to,
Dispose of any property or assets (other than marketable securities),
except, so long as no Default or Event of Default shall exist and be
continuing:
(i) any Subsidiary (the "Transferor Subsidiary") may Dispose of
its assets to the Company or another Subsidiary (the "Transferee
Subsidiary") so long as, in the case of a Disposition to another
Subsidiary, the ownership interest of the Company in the Transferee
Subsidiary is at least equal to, or greater than, the Company's
ownership interest in the Transferor Subsidiary;
(ii) the Company or any Subsidiary may Dispose of any equipment
that it in its good faith opinion determines to be obsolete, wornout
or no longer useful in its business, as determined in good faith by
the Company;
(iii) the Company or any Subsidiary may Dispose of inventory
in the ordinary course of business;
(iv) the Company or any Subsidiary may Dispose of any other of
its assets so long as immediately after giving effect to such proposed
Disposition;
(A) the consideration for such assets represents the Fair
Market Value of such assets at the time of such Disposition; and
(B) the cumulative net book value of all assets Disposed of
by the Company and its Subsidiaries during any period of 12
consecutive calendar months does not exceed 15% of Consolidated
Assets determined as of the most recently completed fiscal year.
For purposes of this Section 10.8:
(1) "Disposition" means the sale, lease, transfer or other
disposition of property but shall not include any public taking or
condemnation, and "Dispose of" and "Disposed of" shall have a
corresponding meaning to Disposition. The term "Disposition" shall
not include an exchange of assets, provided that the assets involved
in such exchange are similar in function in that after giving effect
to such exchange there has not been (A) a Materially Adverse Effect
upon the Company and its Subsidiaries taken as a whole, (B) any
material deterioration of cash flow generation from or in connection
with such assets, or (C) any material deterioration in the overall
quality of plant, property and equipment of the Company and its
Subsidiaries taken as a whole. An "exchange" shall be deemed to have
occurred if each of the transactions involved shall have been
consummated within a six month period.
(2) Calculation of net book value. The net book value of any
assets shall be determined as of the respective date of Disposition of
those assets.
10.9 Transactions With Related Party.
The Company shall not, and shall not permit any Subsidiary to,
effect or permit to exist any transaction with any Affiliate by which any
asset or services of the Company or a Subsidiary is transferred to such
Affiliate, or enter into any other transaction with an Affiliate on terms
more favorable than would be reasonably expected in a similar transaction
with an unrelated entity.
10.10 Nature of Business.
Neither the Company nor any Subsidiary shall engage in any
business, if as a result, when taken as a whole, the general nature of the
business then engaged in by the Company and its Subsidiaries would be
substantially changed from the nature of the business of the Company and
its Subsidiaries on the date hereof.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or Make-
Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in Sections 10.1, 10.2, 10.3, 10.4, 10.5,
10.6, 10.7, 10.8 or 10.9; or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is
not remedied within 30 days after the earlier of (i) a Responsible
Officer obtaining actual knowledge of such default and (ii) the
Company receiving written notice of such default from any holder of a
Note (any such written notice to be identified as a "notice of
default" and to refer specifically to this paragraph (d) of
Section 11); or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in this
Agreement or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or
incorrect in any material respect on the date as of which made; or
(f) (i) the Company or any Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any
principal of or premium or make-whole amount or interest on any Debt
that is outstanding in an aggregate principal amount of at least
$5,000,000 beyond any period of grace provided with respect thereto,
or (ii) the Company or any Subsidiary is in default in the performance
of or compliance with any term of any evidence of any Debt in an
aggregate outstanding principal amount of at least $5,000,000 or of
any mortgage, indenture or other agreement relating thereto or any
other condition exists, and as a consequence of such default or
condition such Debt has become, or has been declared (or one or more
Persons are entitled to declare such Debt to be), due and payable
before its stated maturity or before its regularly scheduled dates of
payment, or (iii) as a consequence of the occurrence or continuation
of any event or condition (other than the passage of time or the right
of the holder of Debt to convert such Debt into equity interests), (x)
the Company or any Subsidiary has become obligated to purchase or
repay Debt before its regular maturity or before its regularly
scheduled dates of payment in an aggregate outstanding principal
amount of at least $5,000,000, or (y) one or more Persons have the
right to require the Company or any Subsidiary so to purchase or repay
such Debt; or
(g) the Company or any Subsidiary (i) is generally not paying,
or admits in writing its inability to pay, its debts as they become
due, (ii) files, or consents by answer or otherwise to the filing
against it of, a petition for relief or reorganization or arrangement
or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy, insolvency, reorganization, moratorium or
other similar law of any jurisdiction, (iii) makes an assignment for
the benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property,
(v) is adjudicated as insolvent or to be liquidated, or (vi) takes
corporate action for the purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of
its Subsidiaries, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving
a petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy
or insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company or any of its Subsidiaries,
or any such petition shall be filed against the Company or any of its
Subsidiaries and such petition shall not be dismissed within 60 days;
or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 are rendered against one or more
of the Company and its Subsidiaries and which judgments are not,
within 60 days after entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within 60 days after the
expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected
to be filed with the PBGC or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint a trustee
to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, (iv) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, (v) the Company or
any Subsidiary establishes or amends any employee welfare benefit plan
that provides post-employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary thereunder, or
(vi) the aggregate "amount of unfunded benefit liabilities" (within
the meaning of section 4001(a)(18) of ERISA) under all Plans,
determined in accordance with Title IV of ERISA, shall at any time
exceed $5,000,000; and any such event or events described in clauses
(i) through (v) above, either individually or together with any other
such event or events, could reasonably be expected to have a Material
Adverse Effect.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1 Acceleration.
(a) If an Event of Default with respect to the Company described
in paragraph (g) or (h) of Section 11 (other than an Event of Default
described in clause (i) of paragraph (g) or described in clause (vi) of
paragraph (g) by virtue of the fact that such clause encompasses clause (i)
of paragraph (g)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is
continuing, any holder or holders of more than 51% in principal amount of
the Notes at the time outstanding may at any time at its or their option,
by notice or notices to the Company, declare all the Notes then outstanding
to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes
at the time outstanding affected by such Event of Default may at any time,
at its or their option, by notice or notices to the Company, declare all
the Notes held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature
and the entire unpaid principal amount of such Notes, plus (x) all accrued
and unpaid interest thereon and (y) the Make-Whole Amount determined in
respect of such principal amount (to the full extent permitted by
applicable law), shall all be immediately due and payable, in each and
every case without presentment, demand, protest or further notice, all of
which are hereby waived. The Company acknowledges, and the parties hereto
agree, that each holder of a Note has the right to maintain its investment
in the Notes free from repayment by the Company (except as herein
specifically provided for) and that the provision for payment of a Make-
Whole Amount by the Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
12.2 Other Remedies.
If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, the holder of any
Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of
the terms hereof or thereof, or in aid of the exercise of any power granted
hereby or thereby or by law or otherwise.
12.3 Rescission.
At any time after any Notes have been declared due and payable
pursuant to clause (b) or (c) of Section 12.1, the holders of not less than
51% in principal amount of the Notes then outstanding, by written notice to
the Company, may rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on the Notes,
all principal of and Make-Whole Amount, if any, on any Notes that are due
and payable and are unpaid other than by reason of such declaration, and
all interest on such overdue principal and Make-Whole Amount, if any, and
(to the extent permitted by applicable law) any overdue interest in respect
of the Notes, at the Default Rate, (b) all Events of Default and Defaults,
other than non-payment of amounts that have become due solely by reason of
such declaration, have been cured or have been waived pursuant to
Section 17, and (c) no judgment or decree has been entered for the payment
of any monies due pursuant hereto or to the Notes. No rescission and
annulment under this Section 12.3 will extend to or affect any subsequent
Event of Default or Default or impair any right consequent thereon.
12.4 No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder of
any Note in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such holder's rights, powers or remedies.
No right, power or remedy conferred by this Agreement or by any Note upon
any holder thereof shall be exclusive of any other right, power or remedy
referred to herein or therein or now or hereafter available at law, in
equity, by statute or otherwise. Without limiting the obligations of the
Company under Section 15, the Company will pay to the holder of each Note
on demand such further amount as shall be sufficient to cover all
reasonable costs and expenses of such holder incurred in any enforcement or
collection under this Section 12, including, without limitation, reasonable
attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1 Registration of Notes.
The Company shall keep at its principal executive office a
register for the registration and registration of transfers of Notes. The
name and address of each holder of one or more Notes, each transfer thereof
and the name and address of each transferee of one or more Notes shall be
registered in such register. Prior to due presentment for registration of
transfer, the Person in whose name any Note shall be registered shall be
deemed and treated as the owner and holder thereof for all purposes hereof,
and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and
correct copy of the names and addresses of all registered holders of Notes.
13.2 Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive office of
the Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of
such Note or his attorney duly authorized in writing and accompanied by the
address for notices of each transferee of such Note or part thereof), the
Company shall execute and deliver, at the Company's expense (except as
provided below), one or more new Notes (as requested by the holder thereof)
in exchange therefor, in an aggregate principal amount equal to the unpaid
principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1. Each such new Note shall be dated
and bear interest from the date to which interest shall have been paid on
the surrendered Note or dated the date of the surrendered Note if no
interest shall have been paid thereon. The Company may require payment of
a sum sufficient to cover any stamp tax or governmental charge imposed in
respect of any such transfer of Notes. Notes shall not be transferred in
denominations of less than $500,000, provided that if necessary to enable
the registration of transfer by a holder of its entire holding of Notes,
one Note may be in a denomination of less than $500,000. Any transferee,
by its acceptance of a Note registered in its name (or the name of its
nominee), shall be deemed to have made the representation set forth in
Sections 6.1 and 6.2. Transfers hereunder shall only be made by the
Company to the extent such transfers are permitted by applicable law.
13.3 Replacement of Notes.
Upon receipt by the Company of evidence reasonably satisfactory
to it of the ownership of and the loss, theft, destruction or mutilation of
any Note (which evidence shall be, in the case of an Institutional
Investor, notice from such Institutional Investor of such ownership and
such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such
Note is, or is a nominee for, an original Purchaser or another holder
of a Note with a minimum net worth of at least $100,000,000, such
Person's own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof, the Company at its own expense shall execute and deliver, in
lieu thereof, a new Note, dated and bearing interest from the date to
which interest shall have been paid on such lost, stolen, destroyed or
mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid thereon.
14. PAYMENTS ON NOTES.
14.1 Place of Payment.
Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be
made in New York, New York, at the principal office of The Chase Manhattan
Bank. in such jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such
place of payment shall be either the principal office of the Company in
such jurisdiction or the principal office of a bank or trust company in
such jurisdiction.
14.2 Home Office Payment.
So long as you or your nominee shall be the holder of any Note,
and notwithstanding anything contained in Section 14.1 or in such Note to
the contrary, the Company will pay all sums becoming due on such Note for
principal, Make-Whole Amount, if any, and interest by the method and at the
address specified for such purpose below your name in Schedule A, or by
such other method or at such other address as you shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation
thereon, except that upon written request of the Company made concurrently
with or reasonably promptly after payment or prepayment in full of any
Note, you shall surrender such Note for cancellation, reasonably promptly
after any such request, to the Company at its principal executive office or
at the place of payment most recently designated by the Company pursuant to
Section 14.1. Prior to any sale or other disposition of any Note held by
you or your nominee you will, at your election, either endorse thereon the
amount of principal paid thereon and the last date to which interest has
been paid thereon or surrender such Note to the Company in exchange for a
new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the
direct or indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such Note as you
have made in this Section 14.2.
15. EXPENSES, ETC.
15.1 Transaction Expenses.
Whether or not the transactions contemplated hereby are
consummated, the Company will pay all reasonable costs and expenses
(including reasonable attorneys' fees of a special counsel and, if
reasonably required, local or other counsel) incurred by you and each Other
Purchaser or holder of a Note in connection with such transactions and in
connection with any amendments, waivers or consents under or in respect of
this Agreement or the Notes (whether or not such amendment, waiver or
consent becomes effective), including, without limitation: (a) the
reasonable costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this
Agreement or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, and (b)
the reasonable costs and expenses, including financial advisors' fees,
incurred in connection with the insolvency or bankruptcy of the Company or
any Subsidiary or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes. The Company will pay,
and will save you and each other holder of a Note harmless from, all claims
in respect of any fees, costs or expenses if any, of brokers and finders
(other than those retained by you).
15.2 Survival.
The obligations of the Company under Section 15.1 shall survive
the payment or transfer permitted pursuant to Section 13.2 of any Note, the
enforcement, amendment or waiver of any provision of this Agreement or the
Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive
the execution and delivery of this Agreement and the Notes, the purchase or
transfer by you of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a
Note, regardless of any investigation made at any time by or on behalf of
you or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties
of the Company under this Agreement. Subject to the preceding sentence,
this Agreement and the Notes embody the entire agreement and understanding
between you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1 Requirements.
This Agreement and the Notes may be amended, and the observance
of any term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and
the Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to you unless consented to by
you in writing, and (b) no such amendment or waiver may, without the
written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to
acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment
or method of computation of interest or of the Make-Whole Amount on, the
Notes, (ii) change the percentage of the principal amount of the Notes the
holders of which are required to consent to any such amendment or waiver,
or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.
17.2 Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with
sufficient information, sufficiently far in advance of the date a decision
is required, to enable such holder to make an informed and considered
decision with respect to any proposed amendment, waiver or consent in
respect of any of the provisions hereof or of the Notes. The Company will
deliver executed or true and correct copies of each amendment, waiver or
consent effected pursuant to the provisions of this Section 17 to each
holder of outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the
requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any holder
of Notes as consideration for or as an inducement to the entering into by
any holder of Notes or any waiver or amendment of any of the terms and
provisions hereof unless such remuneration is concurrently paid, or
security is concurrently granted, on the same terms, ratably to each holder
of Notes then outstanding even if such holder did not consent to such
waiver or amendment.
17.3 Binding Effect, etc.
Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding upon them
and upon each future holder of any Note and upon the Company without regard
to whether such Note has been marked to indicate such amendment or waiver.
No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or
waived or impair any right consequent thereon. No course of dealing
between the Company and the holder of any Note nor any delay in exercising
any rights hereunder or under any Note shall operate as a waiver of any
rights of any holder of such Note. As used herein, the term "this
Agreement" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
17.4 Notes Held by Company, etc.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent to be
given under this Agreement or the Notes, or have directed the taking of any
action provided herein or in the Notes to be taken upon the direction of
the holders of a specified percentage of the aggregate principal amount of
Notes then outstanding, Notes directly or indirectly owned by the Company
or any of its Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return
receipt requested (postage prepaid), or (c) by a recognized overnight
delivery service (with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of J. Stephen Zepf,
Treasurer and Chief Financial Officer of the Company, or at such other
address as the Company shall have specified to the holder of each Note
in writing.
Notices under this Section 18 will be deemed given only when actually
received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may
hereafter be executed, (b) documents received by you at the Closing (except
the Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to you, may be reproduced by
you by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and you may destroy any original
document so reproduced. The Company agrees and stipulates that, to the
extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by you in the regular course of
business) and any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting
any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any
such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information"
means information delivered to you by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received
by you as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was publicly
known or otherwise known to you prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or omission by you
or any person acting on your behalf, (c) otherwise becomes known to you
other than through disclosure by the Company or any Subsidiary or (d)
constitutes financial statements delivered to you under Section 7.1 that
are otherwise publicly available. You will maintain the confidentiality of
such Confidential Information in accordance with procedures adopted by you
in good faith to protect confidential information of third parties
delivered to you, provided that you may deliver or disclose Confidential
Information to (i) your directors, officers, employees, agents, attorneys
and affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes), (ii) your
financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with
the terms of this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any
part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound
by the provisions of this Section 20), (v) any Person from which you offer
to purchase any security of the Company (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound
by the provisions of this Section 20), (vi) any federal or state regulatory
authority having jurisdiction over you, (vii) the National Association of
Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about your
investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with
any law, rule, regulation or order applicable to you, (x) in response to
any subpoena or other legal process, (y) in connection with any litigation
to which you are a party or (z) if an Event of Default has occurred and is
continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes and this Agreement.
Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 20
as though it were a party to this Agreement. On reasonable request by the
Company in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this
Agreement or its nominee), such holder will enter into an agreement with
the Company embodying the provisions of this Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates
or Subsidiaries (a "Permitted Purchaser") as the purchaser of the Notes
that you have agreed to purchase hereunder, by written notice to the
Company, which notice shall be signed by both you and such Permitted
Purchaser, shall contain such Permitted Purchaser's agreement to be bound
by this Agreement and shall contain a confirmation by such Permitted
Purchaser of the accuracy with respect to it of the representations set
forth in Section 6. Upon receipt of such notice, wherever the word "you"
is used in this Agreement (other than in this Section 21), such word shall
be deemed to refer to such Permitted Purchaser in lieu of you. In the
event that such Permitted Purchaser is so substituted as a purchaser
hereunder and such Permitted Purchaser thereafter transfers to you all of
the Notes then held by such Permitted Purchaser, upon receipt by the
Company of notice of such transfer, wherever the word "you" is used in this
Agreement (other than in this Section 21), such word shall no longer be
deemed to refer to such Permitted Purchaser, but shall refer to you, and
you shall have all the rights of an original holder of the Notes under this
Agreement.
22. MISCELLANEOUS.
22.1 Successors and Assigns.
All covenants and other agreements contained in this Agreement by
or on behalf of any of the parties hereto bind and inure to the benefit of
their respective successors and assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.
22.2 Payments Due on Non-Business Days.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-Whole Amount or
interest on any Note that is due on a date other than a Business Day shall
be made on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest payable on such
next succeeding Business Day.
22.3 Severability.
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by
law) not invalidate or render unenforceable such provision in any other
jurisdiction.
22.4 Construction.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse compliance
with any other covenant. Where any provision herein refers to action to be
taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
22.5 Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of
the parties hereto.
22.6 Governing Law.
This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the laws of the
State of New York excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction
other than such State.
[Signatures on Following Pages]
If you are in agreement with the foregoing, please sign the form
of agreement on the accompanying counterpart of this Agreement and return
it to the Company, whereupon the foregoing shall become a binding agreement
between you and the Company.
Very truly yours,
HUGHES SUPPLY, INC.
By: /s/ J. Stephen Zepf
J. Stephen Zepf
Treasurer and Chief Financial Officer
The foregoing is hereby
agreed to as of the
date hereof:
Purchasers of Series A Notes:
HARTFORD LIFE INSURANCE COMPANY
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY,
each by
Hartford Investment Services, Inc.,
their agent and Attorney in Fact
By: /s/ Dennis F. Kraft
Its: Sr. Vice President
[Signatures continued on next page]
[Signature Page to Hughes Note Purchase Agreement Continued]
ANCHOR NATIONAL LIFE INSURANCE COMPANY
By: /s/ Christopher Oakes
Title: Authorized Agent
SUNAMERICA LIFE INSURANCE COMPANY
By: /s/ Christopher Oakes
Title: Authorized Agent
NATIONWIDE MUTUAL INSURANCE COMPANY
By: /s/ James W. Pruden
Title: Vice President Municipal Securities
NATIONWIDE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT OH
By: /s/ James W. Pruden
Title: Vice President Municipal Securities
Purchasers of Series B Notes:
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Patricia W. Wilson
Title:
By: /s/ Judith P. Griffin
Title:
(Authorized Signatories)
THE MUTUAL LIFE INSURANCE COMPANY
OF NEW YORK
By: /s/ Barry J. Scheinholtz
Title: Investment Vice President
SCHEDULE A TO NOTE PURCHASE AGREEMENT
Information Relating To Purchasers
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
Series A Purchasers
Hartford Life Insurance Company $8,000,000
(1) All payments in or in respect of the
Notes are to be by wire transfer of
federal available funds (identifying
each payment as to principal,
interest, and premium, if any.)
Chase Manhattan Bank
4 New York Plaza
New York, New York 10004
Bank ABA No. 021000021
Chase NYC/Cust
A/C#900-9-000200 for F/C/T G 06609 - LCA
Attn: Bond Interest/Principal-Hughes
Supply, Inc. Senior Notes
7.14% 8/15/12
(2) All notices of payments and written
confirmations of such wire transfers:
Hartford Investment Management Company
c/o Portfolio Support
P. O. Box 1744
Hartford, Connecticut 06114-1744
Telefacsimile: (860) 843-3857
(3) All other communications:
Hartford Investment Management Company
c/o Investment Department - Private Placements
P. O. Box 1744
Hartford, Connecticut 06114-1744
Telefacsimile: (860) 843-4906
Tax Identification No.06-0974148
ITT Hartford Life and Annuity Insurance $7,000,000
Company
(1) All payments in or in respect of the
Notes are to be by wire transfer of
federal available funds (identifying
each payment as to principal,
interest, and premium, if any.)
Chase Manhattan Bank
4 New York Plaza
New York, New York 10004
Bank ABA No. 021000021
Chase NYC/Cust
A/C#900-9-000200 for F/C/T G 06587 - ITU
Attn: Bond Interest/Principal-Hughes
Supply, Inc. Senior Notes
7.14% 8/15/12
(2) All notices of payments and written confirmations
of such wire transfers:
Hartford Investment Management Company
c/o Portfolio Support
P. O. Box 1744
Hartford, Connecticut 06114-1744
Telefacsimile: (860) 843-3857
(3) All other communications:
Hartford Investment Management Company
c/o Investment Department - Private Placements
P. O. Box 1744
Hartford, Connecticut 06114-1744
Telefacsimile: (860) 843-4906
Tax Identification No. 39-1052598
Anchor National Life Insurance Company $5,000,000
(1) Wiring instructions:
First National Bank of Chicago
Chicago, Illinois
ABA No. 071 000 013
Account Name: Anchor National Ins. Co.
Account Number: 5214653
Notify Upon Receipt: Jay Prichard, 713-546-1112
Reference: Hughes Supply
(2) All notices of payments, written
confirmations and other communications
to:
Anchor National Life Insurance Company
1 SunAmerica Center
Century City
Investment Accounting 36-05
Los Angles, California 90067-6022
Fax: 310-772-6596
With Duplicates Sent to:
SunAmerica Corporate Finance
700 Louisiana, Suite 3905
Houston, Texas 77002
Fax: 713-222-1402
Tax Identification No. 86-0198983
SunAmerica Life Insurance Company $10,000,000
(1) Wiring instructions:
Citibank, N.A.
New York, New York
ABA No. 021 000 089
Account Name: SunAmerica Life Insurance Company
Account Number: 40573831
Notify Upon Receipt: Jay Prichard, 713-546-1112
Reference: Hughes Supply
(2) All notices of payments, written
confirmations and other communications
to:
SunAmerica Life Insurance Company
1 SunAmerica Center
Century City
Investment Accounting 36-05
Los Angles, California 90067-6022
Fax: 310-772-6596
With Duplicates Sent to:
SunAmerica Corporate Finance
700 Louisiana, Suite 3905
Houston, Texas 77002
Fax: 713-222-1402
Tax Identification No. 52-0502540
Nationwide Mutual Insurance Company $8,500,000
(1) All payments by wire transfer of immediately
available funds to:
The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Mutual Insurance Company
Attn: P & I Department
PPN# 444482 B#9
Security Description: Hughes 7.14% Senior Note
(2) All notices of payments and written confirmations
of such wire transfers:
Nationwide Mutual Insurance Company
c/o The Bank of New York
P. O. Box 19266
Attn: P & I Department
Newark, New Jersey 07195
With a copy to:
Nationwide Mutual Insurance Company
Attn: Investment Accounting
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
(3) All other communications:
Nationwide Mutual Insurance Company
One Nationwide Plaza - (1-33-07)
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Tax Identification No. 31-4177100
Nationwide Life Insurance Company Separate $1,500,000
Account OH
(1) All payments by wire transfer of immediately
available funds to:
The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Life Insurance Co. - S/A OH
Attn: P & I Department
PPN# 444482 B#9
Security Description Hughes 7.14% Senior Note
(2) All notices of payments and written confirmations
of such wire transfers:
Nationwide Life Insurance Company - S/A OH
c/o The Bank of New York
Post Office Box 19266
Attn: P & I Department
Newark, New Jersey 07195
With a copy to:
Nationwide Life Insurance Company - S/A OH
Attn: Investment Accounting
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
(3) All other communications:
Nationwide Life Insurance Company Separate Account OH
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Tax Identification No. 31-4156830
Series B Purchasers:
Allstate Life Insurance Company $20,000,000
(1) All payments by wire transfer of immediately
available funds to:
BBK = Harris Trust and Savings Bank
ABA #071000288
BNF = Allstate Life Insurance Company
Collection Account #168-117-0
ORG = (Enter Issuer Name (and Credit Name, if any))
OBI = DPP (Enter Private Placement No.44482 C*2)
(Enter Lease Number, if any)-
Payment Due Date (MM/DD/YY)
P__________(Enter "P" and amount of principal
being remitted, for example, P500,000.00)
I__________ (Enter "I" and amount of interest
being remitted, for example, I225,000.00)
(2) All notices of payments and written confirmations
of such wire transfers:
Allstate Insurance Company
Investment Operations - Private Placements
3075 Sanders Road, STE G4A
Northbrook, Illinois 60062-7127
Telephone: (847) 402-2769
Telecopy: (847) 326-5040
(3) Securities to be delivered to:
Citibank, Federal Savings Bank
Citicorp Center
500 West Madison Street
Floor 4, Zone 6
Chicago, Illinois 60661-2591
Attention: Misty Gniadek
For Allstate Life Insurance Company/Safekeeping
Acct. No. 846627
(4) All other communications:
Allstate Life Insurance Company
Private Placements Department
3075 Sanders Road, STE G3A
Northbrook, Illinois 60062-7127
Telephone: (847) 402-4394
Telecopy: (847) 402-3092
Tax Identification No. 36-2554642
The Mutual Life Insurance Company of New York $20,000,000
(1) All payments by wire transfer of
immediately available funds to:
Chase Manhattan Bank, ABA #021000021,
for credit to Private Income
Processing Account No. 544755102 (and
identifying the issue upon which
payment is being made and the
application of the payment as between
interest, principal and premium):
(2) All Notices and Confirmations Relating
to Payments:
If by Registered Mail, Certified Mail
or Federal Express:
The Chase Manhattan Bank
4 New York Plaza, 13th Floor
New York, New York 10004
Attn: Income Processing - J. Piperato, 13th Floor
If by Regular Mail:
The Chase Manhattan Bank
Dept. 3492
P. O. Box 50000
Newark, New Jersey 07101-8006
The Senior Notes being purchased by
The Mutual Life Insurance Company of
New York will be evidenced by one Note
in the principal amount of $20,000,000
issued in the name of J. ROMEO & Co.
With a Second Copy to:
Telecopy Confirms and Notices:
(201) 907-6979
Attention: Securities Custody
Mailing Confirms and Notices:
Glenpointe Marketing & Operations Center - MONY
Glenpointe Center West
500 Frank W. Burr Blvd.
Teaneck, New Jersey 07666-6888
Attention: Securities Custody
3) Address for all Other Communications
The Mutual Life Insurance Company of New York
1740 Broadway
New York, New York 10019
Attention: MONY Capital Management Unit
Telecopy No.: (212) 708-2491
Tax Identification No. 13-1632487
Total $80,000,000
SCHEDULE B TO NOTE PURCHASE AGREEMENT
Defined Terms
As used herein, the following terms have the respective meanings
set forth below or set forth in the Section hereof following such term:
"Affiliate" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control
with, the Company, except a Subsidiary, or any officer or Person holding
10% or more of the capital stock of the Company. A Person shall be deemed
to control a corporation if such Person possesses, directly or indirectly,
the power to direct or cause the direction of the management and policies
of such corporations, whether through the ownership of voting securities,
by contract or otherwise.
"Bank Credit Agreement" shall mean (i) that certain Amended and
Restated Revolving Credit and Line of Credit Agreement dated as of August
18, 1997 by and among the Company, the Lenders named therein and SunTrust
Bank, Central Florida, National Association, as Agent, and as the same may
be further modified, amended, renewed, extended or supplemented from time
to time and (ii) all replacements, substitutions, refinancings and
refundings thereof.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which commercial banks in New York City are required or
authorized to be closed.
"Capital Lease" means a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capital Stock" shall mean, with respect to any Person, the
outstanding capital stock (including all common, preferred or other equity
securities and any options or warrants to purchase capital stock or other
securities exchangeable for or convertible into capital stock) of such
Person.
"Capitalized Lease Obligation" shall mean, with respect to any
Person, any rental obligation which, under GAAP, is or will be required to
be indebtedness (net of interest expense) in accordance with such
principles.
"Closing" is defined in Section 3.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated thereunder
from time to time.
"Company" shall mean Hughes Supply, Inc., a Florida corporation.
"Confidential Information" is defined in Section 20.
"Consolidated" shall mean the consolidated financial information
of the Company and its Subsidiaries under generally accepted accounting
principles.
"Consolidated Assets" shall mean, at any time, the total assets
of the Company and its Subsidiaries on a Consolidated basis under GAAP.
"Consolidated Current Debt" shall mean, at any time, the amount
of Current Debt of the Company and its Subsidiaries on a Consolidated basis
under GAAP at such time.
"Consolidated EBITR" shall mean, for any period, an amount equal
to, the sum of its Consolidated Net Income plus, to the extent deducted in
determining Consolidated Net Income (i) provisions for taxes based on
income, (ii) Consolidated Interest Expense, and (iii) Consolidated Rental
Expense.
"Consolidated Funded Debt" shall mean, at any time but without
duplication, the amount of Funded Debt of the Company and its Subsidiaries
on a Consolidated basis under GAAP at such time.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including without limitation, interest expense
attributable to capitalized leases in accordance with generally accepted
accounting principles) of the Company and its Subsidiaries on a
Consolidated basis under GAAP.
"Consolidated Net Income" shall mean, for any period, the
consolidated net income (or loss) of the Company and its Subsidiaries for
such period (taken as a single accounting period) determined in conformity
with GAAP, but excluding therefrom (to the extent otherwise included
therein) (i) any extraordinary gains or losses, together with any related
provision for taxes, realized upon any sale of assets outside the ordinary
course of business, and (ii) undistributed net income of a Subsidiary to
the extent that such distribution is prohibited by agreement, judgment or
regulation; provided, however, that all earnings from acquisitions will
accrue to the benefit of the Company in accordance with GAAP.
"Consolidated Net Worth" shall mean, at any time, on a
Consolidated basis, shareholders' equity of the Company and its
Subsidiaries at such time determined in accordance with GAAP.
"Consolidated Rental Expense" shall mean, for any period, total
operating lease expense of the Company and its Subsidiaries on a
Consolidated basis under GAAP.
"Consolidated Total Capitalization" shall mean, at any time, the
sum of Consolidated Net Worth and Consolidated Funded Debt.
"Current Debt" shall mean all Debt with an original maturity of
one year or less. For the avoidance of doubt, Debt incurred underBank
Credit Agreement shall not constitute "Current Debt".
"Debt" shall mean, without duplication, with respect to any
Person, as at any date of determination:
(i) all indebtedness for borrowed money which such Person has
directly or indirectly created, incurred or assumed (including,
without limitation, all Capitalized Lease Obligations);
(ii) all indebtedness, whether or not for borrowed money, secured
by any Lien on any property or asset owned or held by such Person
subject thereto, whether or not the indebtedness secured thereby shall
have been assumed by such Person;
(iii) any indebtedness, whether or not for borrowed money,
with respect to which such Person has become directly or indirectly
liable and which represents or has been incurred to finance the
purchase price (or a portion thereof) of any property or services or
business acquired by such Person, whether by purchase, consolidation,
merger or otherwise other than any payables and accrued expenses in
the ordinary course of business that are current liabilities under
GAAP; and
(iv) any indebtedness of any other Person of the character
referred to in clauses (i), (ii), or (iii) of this definition with
respect to which the Person whose Debt is being determined has become
liable by way of a Guarantee;
all as determined in accordance with GAAP; provided, however, Debt shall
not include endorsement of negotiable instruments for collection in the
ordinary course of business.
"Default" shall mean an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of notice or
both, become an Event of Default.
"Default Rate" shall mean that rate of interest that is the
greater of (i) 2% per annum above the rate of interest stated in clause (a)
of the first paragraph of the Notes or (ii) 2% over the rate of interest
publicly announced by The Chase Manhattan Bank as its "base" or "prime"
rate.
"Environmental Laws" shall mean any and all Federal, state,
local, and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or governmental restrictions relating to pollution and
the protection of the environment or the release of any materials into the
environment, including but not limited to those related to hazardous
substances or wastes, air emissions and discharges to waste or public
systems.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations
promulgated thereunder from time to time in effect.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that is treated as a single employer together with the
Company under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean, at any time, the sale value of
property that would be realized in an arm's length sale at such time
between an informed and willing buyer, and an informed and willing seller,
under no compulsion to buy or sell, respectively.
"Funded Debt" shall mean (i) all Debt with an original maturity
of greater than one year (including Debt incurred under the Bank Credit
Agreement), including current maturities of such Debt, and all Debt which
is renewable solely at the option of the Company or a Subsidiary, (ii) all
Debt with an original maturity of less than one year, including commercial
paper issued by the Company, if a direct or secondary source of repayment
of such Debt is, or such Debt is credit enhanced by, a line of credit or
other financial accommodation having a maturity of greater than one year
and (iii) all other Debt that is now or hereafter characterized by the
Company or any Subsidiary in its financial statements as "Funded Debt".
"GAAP" shall mean generally accepted accounting principles as in
effect from time to time in the United States of America.
"Governmental Authority" shall mean
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guarantee" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to
any Debt, lease, dividend or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course
of business) or discounted or sold with recourse by such Person, or in
respect of which such Person is otherwise directly or indirectly liable,
including, without limitation, any such obligation in effect guaranteed by
such Person through any agreement (contingent or otherwise) to purchase,
repurchase or otherwise acquire such obligation or any security therefor,
or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) in any such case if the purpose or intent of
such agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected against loss in
respect thereof. The amount of any Guarantee shall be equal to the
outstanding principal amount of the obligation guaranteed or such lesser
amount to which the maximum exposure of the guarantor shall have been
specifically limited.
"Hazardous Material" shall mean any and all pollutants, toxic or
hazardous wastes or any other substances that might pose a hazard to health
or safety, the removal of which may be required or the generation,
manufacture, refining, production, processing, treatment, storage,
handling, transportation, transfer, use, disposal, release, discharge,
spillage, seepage, or filtration of which is or shall be restricted,
prohibited or penalized by any applicable law (including, without
limitation, asbestos, urea formaldehyde foam insulation and polychlorinated
biphenyls).
"holder" shall mean, with respect to any Note, the Person in
whose name such Note is registered in the register maintained by the
Company pursuant to Section 13.1.
"Institutional Investor" shall mean (a) any original purchaser of
a Note, (b) any holder of a Note holding more than 5% of the aggregate
principal amount of the Notes then outstanding, and (c) any bank, trust
company, savings and loan association or other financial institution, any
pension plan, any investment company, any insurance company, any broker or
dealer, or any other similar financial institution or entity, regardless of
legal form.
"Lien" shall mean, with respect to any Person, any mortgage,
lien, pledge, charge, security interest or other encumbrance, or any
interest or title of any vendor, lessor, lender or other secured party to
or of such Person under any conditional sale or other title retention
agreement or Capital Lease, upon or with respect to any property or asset
of such Person (including in the case of stock, stockholder agreements,
voting trust agreements and all similar arrangements).
"Make-Whole Amount" is defined in Section 8.6.
"Material" shall mean material in relation to the business,
operations, affairs, financial condition, assets, properties, or prospects
of the Company and its Subsidiaries taken as a whole.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, operations, affairs, financial condition, assets or
properties of the Company and its Subsidiaries taken as a whole, or (b) the
ability of the Company to perform its obligations under this Agreement and
the Notes, or (c) the validity or enforceability of this Agreement or the
Notes.
"Material Subsidiary" shall mean (i) each Subsidiary set forth on
Schedule 4.11 and (ii) each other Subsidiary of the Company, now existing
or hereinafter established or acquired, that has or acquires total assets
in excess of $1,000,000 or that accounted for or produced more than 5% of
the Consolidated EBITR of the Company on a Consolidated basis during any of
the three most recently completed fiscal years of the Company.
"Memorandum" is defined in Section 5.3.
"Multiemployer Plan" shall mean any Plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Notes" is defined in Section 1.
"Officer's Certificate" shall mean a certificate of a Senior
Financial Officer or of any other officer of the Company whose
responsibilities extend to the subject matter of such certificate.
"Other Agreements" is defined in Section 2.
"Other Purchasers" is defined in Section 2.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA or any successor thereto.
"Person" shall mean an individual, corporation, company, limited
liability company, voluntary association, partnership, limited liability
partnership, trust, unincorporated organization or joint venture or a
government or any agency, instrumentality or political subdivision thereof,
and for the purpose of the definition of "ERISA Affiliate", a trade or
business.
"Plan" shall mean an "employee benefit plan" (as defined in
section 3(3) of ERISA) that is or, within the preceding five years, has
been established or maintained, or to which contributions are or, within
the preceding five years, have been made or required to be made, by the
Company or any ERISA Affiliate or with respect to which the Company or any
ERISA Affiliate may have any liability.
"Preferred Stock" shall mean any class of Capital Stock of a
corporation that is preferred over any other class of Capital Stock of such
corporation as to the payment of dividends or the payment of any amount
upon liquidation or dissolution of such corporation.
"Priority Debt" shall mean with respect to any Person, at any
time, without duplication, the sum of:
(i) Unsecured Debt of each Subsidiary (other than such Debt held
by the Company or a Wholly-Owned Subsidiary thereof);
(ii) Debt of the Company and any Subsidiary secured by any Lien
unless such Lien is otherwise permitted by subparagraphs (i)
through (xiii) of Section 10.5 (other than such Debt held by
the Company or a Wholly-Owned Subsidiary thereof); and
(iii) All Preferred Stock of Subsidiaries owned by a Person
other than the Company or a Wholly-Owned Subsidiary thereof.
"property" or "properties" shall mean, unless otherwise
specifically limited, real or personal property of any kind, tangible or
intangible, choate or inchoate.
"QPAM Exemption" shall mean Prohibited Transaction Class
Exemption 84-14 issued by the United States Department of Labor.
"Required Holders" shall mean the holders of at least 51% in the
principal amount of the Notes at the time outstanding.
"Responsible Officer" shall mean any Senior Financial Officer and
any other officer of the Company with responsibility for the administration
of the relevant portion of this agreement.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
"Senior Financial Officer" shall mean the chief financial
officer, principal accounting officer, treasurer or comptroller of the
Company.
"Series A Notes" and "Series B Notes" shall have the meaning set
forth in Section 1 and any reference to a particular "Series" shall be a
reference to either the Series A Notes or Series B Notes.
"Subsidiary" means, as to any Person, any corporation,
association or other business entity in which such Person or one or more of
its Subsidiaries or such Person and one or more of its Subsidiaries owns
sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity, and any
partnership or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries (unless such partnership
can and does ordinarily take major business actions without the prior
approval of such Person or one or more of its Subsidiaries). Unless the
context otherwise clearly requires, any reference to a "Subsidiary" is a
reference to a Subsidiary of the Company.
"Subsidiary Debt" shall mean all Debt of which the direct obligor
is a subsidiary of the Company.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or
more of the Company and the Company's other Wholly-Owned Subsidiaries at
such time.
SCHEDULE 4.9 TO NOTE PURCHASE AGREEMENT
Changes in Corporate Structure
(i) Closed Acquisitions:
(ii) Pending Acquisitions:
SCHEDULE 4.11 TO NOTE PURCHASE AGREEMENT
Material Subsidiaries Executing and Delivering Guarantees
on Date of Closing
Each of the following is a Material Subsidiary of the Company:
SCHEDULE 5.3 TO NOTE PURCHASE AGREEMENT
Disclosure Materials
No Exceptions.
SCHEDULE 5.4 TO NOTE PURCHASE AGREEMENT
Subsidiaries of the Company
and Ownership of Subsidiary Stock; Company's
Affiliates; Company's Directors and Senior Officers
(i) Subsidiaries of the Company:
State of
Incorporation/ Entity's
Legal Entities Organization Ownership
100%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
(ii) Affiliates of the Company:
(a) No person holds 10% or more of the Company's common stock as of
the date of this Agreement.
(b) Except for the Subsidiaries of the Company, there are no other
Affiliates of the Company, except that the Company's wholly-owned
Subsidiary, H Venture Corp., owns a 20% equity interest in Accord
Industries Company, a Florida general partnership. Accord Industries
Company is not a consolidated entity.
(iii) Directors and Senior Officers of the Company:
Directors:
David H. Hughes
John D. Baker II
Robert N. Blackford
H. Corbin Day
John B. Ellis
A. Stewart Hall, Jr.
Clifford M. Hames
Vincent S. Hughes
Herman B. McManaway
Donald C. Martin
Officers:
David H. Hughes, Chairman of the Board and Chief Executive
Officer
A. Stewart Hall, Jr., President
Russell V. Hughes, Vice President
Vincent S. Hughes, Vice President
Sidney J. Strickland, Vice President
J. Stephen Zepf, Treasurer and Chief Financial Officer
Benjamin P. Butterfield, Secretary
Jay Clark, Assistant Treasurer
Robert N. Blackford, Assistant Secretary
SCHEDULE 5.5 TO NOTE PURCHASE AGREEMENT
Financial Statements
(i) The Company's Annual Reports to Shareholders for the Fiscal Years
1994, 1995, 1996 and 1997.
(ii) The Company's Annual Reports on Form 10-K for the fiscal years
ended January 26, 1996 and January 31, 1997.
(iii) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ending April 30, 1997.
SCHEDULE 5.8 TO NOTE PURCHASE AGREEMENT
Certain Litigation
None.
SCHEDULE 5.11 TO NOTE PURCHASE AGREEMENT
Patents, Etc.
No Exceptions.
SCHEDULE 5.14 TO NOTE PURCHASE AGREEMENT
Use of Proceeds
The proceeds received by the Company shall be used for general
corporate purposes.
SCHEDULE 5.15 TO NOTE PURCHASE AGREEMENT
Existing Debt; Unpermitted Liens
(i) Existing Debt:
Maximum Current Principal
Principal Amount
Amount Outstanding as of
July ___, 1997
___________________
Guarantee of Affiliated Debt: A wholly-owned subsidiary of the
Company, H Venture Corp. , owns a 20% interest in Accord Industries Company
("Accord"), a joint venture formed from the Company's sale of its
manufacturing operations in 1990. In connection with the investment in
Accord, the Company guaranteed $500,000 of Accord's indebtedness to a bank
and H Venture Corp., as a joint venturer, is contingently liable for the
remaining bank debt.
See also "Schedule 10.5 to Note Purchase Agreement - Liens."
(ii) Unpermitted Liens:
None.
SCHEDULE 10.5 TO NOTE PURCHASE AGREEMENT
Liens
Future Minimum
Lease Lease Payments
(Annual)
EXHIBIT 1 TO NOTE PURCHASE AGREEMENT
Form of Senior Note due May 30, 2012
HUGHES SUPPLY, INC.
[7.14][7.19]% SENIOR NOTE DUE MAY 30, 2012
[Series A]
[Series B]
No. [R-_____]
$[_______] August 28, 1997
FOR VALUE RECEIVED, the undersigned, HUGHES SUPPLY, INC. (herein
called the "Company"), a corporation organized and existing under the laws
of the State of Florida, hereby promises to pay to [
], or registered assigns, the principal sum of [
] DOLLARS on May 30, 2012, with interest (computed on the basis of a 360-
day year of twelve 30-day months) (a) on the unpaid balance thereof at the
rate of [7.14%][7.19%] per annum from the date hereof, payable
semiannually, on the 30th day of May and November in each year, commencing
with the November 30 next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted
by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreements referred to
below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) [9.14%][9.19%] or (ii) 2% over the rate of
interest publicly announced by The Chase Manhattan Bank from time to time
in New York, New York as its "base" or "prime" rate.
Subject to Section 14.2 of each Note Purchase Agreement (as
defined below), payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of the
United States of America at The Chase Manhattan Bank, or at such other
place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreements.
This Note is one of the Series [A][B] Senior Notes (herein called
the "Notes") issued pursuant to separate Note Purchase Agreements, dated as
of August ___, 1997 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named
therein and is entitled to the benefits thereof. Each holder of this Note
will be deemed, by its acceptance hereof, (i) to have agreed to the
confidentiality provisions set forth in Section 20 of the Note Purchase
Agreements and (ii) to have made the representation set forth in Sections
6.1 and 6.2 of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note
Purchase Agreements, upon surrender of this Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of transfer
duly executed, by the registered holder hereof or such holder's attorney
duly authorized in writing, a new Note for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person
in whose name this Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company will not
be affected by any notice to the contrary.
The Company will make required prepayments of principal on the
dates and in the amounts specified in the Note Purchase Agreements. This
Note is also subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default occurs and is continuing, the principal of
this Note may be declared or otherwise become due and payable in the
manner, at the price (including any applicable Make-Whole Amount) and with
the effect provided in the Note Purchase Agreements.
This Note is governed by and is to be construed in accordance
with the terms of the Note Purchase Agreement, the terms of which are
incorporated herein by reference. All capitalized terms not otherwise
defined herein shall have the same meanings attributed to them as are set
forth in the Note Purchase Agreement.
HUGHES SUPPLY, INC.
By:_________________________
J. Stephen Zepf
Treasurer and Chief Financial Officer
EXHIBIT 4.4(a) TO NOTE PURCHASE AGREEMENT
Matters To Be Covered by Opinion of General Counsel for the Company
1. Each of the Company and its Subsidiaries being duly
incorporated, validly existing and in good standing and having requisite
corporate power and authority to issue and sell the Notes and to execute
and deliver the documents.
2. Each of the Company and its Subsidiaries being duly
qualified and in good standing as a foreign corporation in appropriate
jurisdictions.
3. Due authorization and execution of the documents and, if
governed by the laws of the State of Florida, such documents would be
legal, valid, binding and enforceable.
4. No conflicts with charter documents, laws or other
agreements.
5. All consents required to issue and sell the Notes and to
execute and deliver the documents having been obtained.
6. No litigation questioning validity of documents.
7. The Notes not requiring registration under the Securities
Act of 1933, as amended; no need to qualify an indenture under the Trust
Indenture Act of 1939, as amended.
8. No violation of Regulations G, T or X of the Federal Reserve
Board.
9. Company not an "investment company", or a company
"controlled" by an "investment company", under the Investment Company Act
of 1940, as amended.
10. A Florida state court, or a federal court sitting in
Florida, would, under Florida conflict of laws principles, recognize the
choice of New York law to govern the Note Purchase Agreement and the Notes.
The opinion shall be subject to standard and customary
qualification of counsel with respect to transactions of this nature.
EXHIBIT 4.4(b) TO NOTE PURCHASE AGREEMENT
Matters To Be Covered by Opinion of Special Counsel to the Purchasers
1. Note Purchase Agreement in commercially acceptable legal form.
2. The Note Purchase Agreement and the Notes would be legal, valid and
binding obligations, enforceable against the Company in accordance
with their respective terms.
3. The Notes not requiring registration under the Securities Act of 1933,
as amended; no need to qualify an indenture under the Trust Indenture
Act of 1939, as amended.
Opinions subject to standard and customary qualifications and exceptions.
EXHIBIT 4.11(a) TO NOTE PURCHASE AGREEMENT
Form of Guarantee
SUBSIDIARY GUARANTEE AGREEMENT
This SUBSIDIARY GUARANTEE AGREEMENT, dated as of August [28],
1997(this "Guarantee"), made by the undersigned signatories hereto as
Guarantors (each of the undersigned individually a "Guarantor" and
collectively the "Guarantors"), in favor of [list exact names of
Purchasers], the foregoing, together with their successors and assigns,
individually a "Guaranteed Party" and collectively the "Guaranteed
Parties");
W I T N E S S E T H:
WHEREAS, Hughes Supply, Inc., a corporation organized and existing
under the laws of the State of Florida ("Hughes") and the Guaranteed
Parties have entered into those certain identical (except for the names of
the purchasers and the amounts of Notes, as defined below, to be purchased)
Note Purchase Agreements dated as of August [28], 1997(together the
"Agreements" and separately each an "Agreement"), pursuant to which Hughes
has issued to the Guaranteed Parties its 7.14% Senior Notes due May 30,
2012 and its 7.19% Senior Notes due May 30, 2012 (the "Notes"), in the
aggregate principal amount of $$80,000,000;
WHEREAS, Hughes owns, directly or indirectly, all or a majority of the
outstanding capital stock of each of the Guarantors;
WHEREAS, Hughes and Guarantors share an identity of interest as
members of a consolidated group of companies engaged in substantially
similar businesses with Hughes providing certain centralized financial,
accounting and management services to each of the Guarantors by virtue of
intercompany advances and loans such that financial accommodations extended
to Hughes shall inure to the direct and material benefit of Guarantors; and
WHEREAS, consummation of the transactions pursuant to the Agreements
will facilitate expansion and enhance the overall financial strength and
stability of Hughes's entire corporate group, including the Guarantors; and
WHEREAS, it is a condition precedent to the Guaranteed Parties'
obligations to enter into the Agreements and to purchase the Notes
thereunder that Guarantors execute and deliver this Guarantee, and
Guarantors desire to execute and deliver this Guarantee to satisfy such
condition precedent;
NOW, THEREFORE, in consideration of the premises and in order to
induce the Guaranteed Parties to enter into and perform their obligations
under the Agreements, the Guarantors hereby jointly and severally agree as
follows:
SECTION 1. Guarantee. The Guarantors hereby, jointly and severally,
irrevocably, absolutely and unconditionally guarantee the due and punctual
payment of all principal of, premium, if any, and interest on, the Notes
and all other obligations owing by Hughes to the Guaranteed Parties, or any
of them, jointly or severally under the Agreements, the Notes and the other
documents, instruments and agreements relating to the transactions
contemplated by the Agreements, and all renewals, extensions, modifications
and refinancings thereof, now or hereafter owing, whether for principal,
interest, make-whole or yield maintenance premium or other fees, expenses
or otherwise, and any and all reasonable out-of-pocket expenses (including
reasonable attorneys' fees and expenses actually incurred) incurred by the
Guaranteed Parties in enforcing any rights under this Guarantee
(collectively, the "Guaranteed Obligations") including, without limitation,
all interest which, but for the filing of a petition in bankruptcy with
respect to Hughes, would accrue on any principal portion of the Guaranteed
Obligations. Any and all payments by the Guarantors hereunder shall be
made free and clear of and without deduction for any set-off, counterclaim,
or withholding so that, in each case, each Guaranteed Party will receive,
after giving effect to any Taxes (as such term is defined in the
Agreements, but excluding Taxes imposed on overall net income of any
Guaranteed Party), the full amount that it would otherwise be entitled to
receive with respect to the Guaranteed Obligations (but without duplication
of amounts for Taxes already included in the Guaranteed Obligations). The
Guarantors acknowledge and agree that this is a guarantee of payment when
due, and not of collection, and that, subject to Section 13 hereof, this
Guarantee may be enforced up to the full amount of the Guaranteed
Obligations without proceeding against Hughes, against any security for the
Guaranteed Obligations, against any other Guarantor or under any other
guaranty covering any portion of the Guaranteed Obligations.
SECTION 2. Guarantee Absolute. The Guarantors guarantee that the
Guaranteed Obligations will be paid strictly in accordance with the terms
of the documents, instruments and agreements evidencing any Guaranteed
Obligations, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Guaranteed Party with respect thereto. The liability of each Guarantor
under this Guarantee shall be absolute and unconditional in accordance with
its terms and shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise
affected by, any circumstance or occurrence whatsoever, including, without
limitation, the following (whether or not such Guarantor consents thereto
or has notice thereof):
(a) any change in the time, place or manner of payment of,
or in any other term of, all or any of the Guaranteed
Obligations, any waiver, indulgence, renewal, extension,
amendment or modification of or addition, consent or supplement
to or deletion from or any other action or inaction under or in
respect of the Agreements, or any other documents, instruments or
agreements relating to the Guaranteed Obligations or any other
instrument or agreement referred to therein or any assignment or
transfer of any thereof;
(b) any lack of validity or enforceability of the
Agreements or any other document, instrument or agreement
referred to therein or any assignment or transfer of any thereof;
(c) any furnishing to the Guaranteed Parties of any
additional security for the Guaranteed Obligations, or any sale,
exchange, release or surrender of, or realization on, any
security for the Guaranteed Obligations;
(d) any settlement or compromise of any of the Guaranteed
Obligations, any security therefor, or any liability of any other
party with respect to the Guaranteed Obligations, or any
subordination of the payment of the Guaranteed Obligations to the
payment of any other liability of Hughes;
(e) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like
proceeding relating to any Guarantor or Hughes, or any action
taken with respect to this Guarantee by any trustee or receiver,
or by any court, in any such proceeding;
(f) any nonperfection of any security interest or lien on
any collateral, or any amendment or waiver of or consent to
departure from any guaranty or security, for all or any of the
Guaranteed Obligations;
(g) any application of sums paid by Hughes or any other
Person with respect to the liabilities of Hughes to the
Guaranteed Parties, regardless of what liabilities of Hughes
remain unpaid;
(h) any act or failure to act by any Guaranteed Party which
may adversely affect a Guarantor's subrogation rights, if any,
against Hughes to recover payments made under this Guarantee; and
(i) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, any Guarantor.
If claim is ever made upon any Guaranteed Party for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Guaranteed Obligations, and any Guaranteed Party repays all or part of said
amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over the Guaranteed Party or any of
its property, or (b) any settlement or compromise of any such claim
effected by the Guaranteed Party with any such claimant (including Hughes
or a trustee in bankruptcy for Hughes), then and in such event the
Guarantors agree that any such judgment, decree, order, settlement or
compromise shall be binding on it, notwithstanding any revocation hereof or
the cancellation of the Agreements or the other documents, instruments and
agreements evidencing any Guaranteed Obligations, and the Guarantors shall
be and remain liable to the Guaranteed Party for the amounts so repaid or
recovered to the same extent as if such amount had never originally been
paid to the Guaranteed Party.
The obligations of each Guarantor shall be joint and several and the
release or discharge of the obligations of one Guarantor shall not modify,
affect, release or discharge the obligations of the other Guarantors
hereunder.
SECTION 3. Waiver. The Guarantors hereby waive notice of acceptance
of this Guarantee, notice of any liability to which it may apply, and
further waive presentment, demand of payment, protest, notice of dishonor
or nonpayment of any such liabilities, suit or taking of other action by
the Guaranteed Parties against, and any other notice to, Hughes or any
other party liable with respect to the Guaranteed Obligations (including
the Guarantors or any other Person executing a guaranty of the obligations
of Hughes).
SECTION 4. Waiver of Subrogation. No Guarantor will exercise any
rights against Hughes which it may acquire by way of subrogation or
contribution, by any payment made hereunder or otherwise. Each Guarantor
hereby expressly waives any claim, right or remedy which such Guarantor may
now have or hereafter acquire against Hughes that arises hereunder and/or
from the performance by any Guarantor hereunder, including, without
limitation, any claim, right or remedy of the Guaranteed Parties against
Hughes or any security which the Guaranteed Parties now have or hereafter
acquire, whether or not such claim, right or remedy arises in equity, under
contract, by statute, under color of law or otherwise.
SECTION 5. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 6. Amendments, Etc. No amendment or waiver of any provision
of this Guarantee nor consent to any departure by a Guarantor therefrom
shall in any event be effective unless the same shall be in writing
executed by the Guaranteed Parties.
SECTION 7. Notices. All notices and other communications provided
for hereunder shall be given in the manner specified in the Agreements (i)
in the case of the Guaranteed Parties, at the address specified for the
Guaranteed Parties in the Agreements, and (ii) in the case of the
Guarantors, at the respective addresses specified for such Guarantors in
this Guarantee.
SECTION 8. No Waiver; Remedies. No failure on the part of the
Guaranteed Parties to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. No notice to or
demand on any Guarantor in any case shall entitle such Guarantor to any
other further notice or demand in any similar or other circumstances or
constitute a waiver of the rights of the Guaranteed Parties to any other or
further action in any circumstances without notice or demand. The remedies
herein provided are cumulative and not exclusive of any remedies provided
by law.
SECTION 9. Right of Set-Off. In addition to and not in limitation of
all rights of offset that the Guaranteed Parties may have under applicable
law, the Guaranteed Parties shall, upon the occurrence of any Event of
Default and whether or not the Guaranteed Parties have made any demand or
the Guaranteed Obligations are matured, have the right to appropriate and
apply to the payment of the Guaranteed Obligations, all indebtedness or
property then or thereafter owing by the Guaranteed Parties to any
Guarantor, whether or not related to this Guarantee or any transaction
hereunder. The Guaranteed Parties shall promptly notify the relevant
Guarantor of any offset hereunder.
SECTION 10. Continuing Guarantee; Transfer of Obligations. This
Guarantee is a continuing guaranty and shall (i) remain in full force and
effect until payment in full of the Guaranteed Obligations and all other
amounts payable under this Guarantee and the termination of the Agreements,
(ii) be binding upon each Guarantor, its successors and assigns, and (iii)
inure to the benefit of and be enforceable by the Guaranteed Parties.
SECTION 11. Governing Law. THIS GUARANTEE AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT
TO THE CONFLICT OF LAW PRINCIPLES THEREOF).
SECTION 12. Subordination of Hughes's Obligations to the Guarantors.
As an independent covenant, each Guarantor hereby expressly covenants and
agrees for the benefit of the Guaranteed Parties that all obligations and
liabilities of Hughes to such Guarantor of whatsoever description
including, without limitation, all intercompany receivables of such
Guarantor from Hughes ("Junior Claims") shall be subordinate and junior in
right of payment to all obligations of Hughes to the Guaranteed Parties
under the terms of the Agreements and the other documents, instruments and
agreements evidencing any Guaranteed Obligations ("Senior Claims").
If an Event of Default shall occur, then, unless and until such Event
of Default shall have been cured, waived, or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities by setoff or
otherwise) shall be made by Hughes to any Guarantor on account of or in any
manner in respect of any Junior Claim except such payments and
distributions the proceeds of which shall be applied to the payment of
Senior Claims.
In the event of a Proceeding (as hereinafter defined), all Senior
Claims shall first be paid in full before any direct or indirect payment or
distribution (in cash, property, securities by setoff or otherwise) shall
be made to any Guarantor on account of or in any manner in respect of any
Junior Claim except such payments and distributions the proceeds of which
shall be applied to the payment of Senior Claims. For the purposes of the
previous sentence, "Proceeding" means Hughes or any Guarantor shall
commence a voluntary case concerning itself under the Bankruptcy Code of
1978, as amended (the "Bankruptcy Code"), or any other applicable
bankruptcy laws; or any involuntary case is commenced against Hughes or any
Guarantor; or a custodian (as defined in the Bankruptcy Code or any other
applicable bankruptcy laws) is appointed for, or takes charge of, all or
any substantial part of the property of Hughes or any Guarantor, or Hughes
or any Guarantor commences any other proceedings under any reorganization
arrangement, adjustment of debt, relief of debtor, dissolution, insolvency
or liquidation or similar law of any jurisdiction whether now or hereafter
in effect relating to Hughes or any Guarantor, or any such proceeding is
commenced against Hughes or any Guarantor, or Hughes or any Guarantor is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or Hughes or any
Guarantor suffers any appointment of any custodian or the like for it or
any substantial part of its property; or Hughes or any Guarantor makes a
general assignment for the benefit of creditors; or Hughes or any Guarantor
shall fail to pay, or shall state that it is unable to pay, or shall be
unable to pay, its debts generally as they become due; or Hughes or any
Guarantor shall call a meeting of its creditors with a view to arranging a
composition or adjustment of its debts; or Hughes or any Guarantor shall by
any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action shall be
taken by Hughes or any Guarantor for the purpose of effecting any of the
foregoing.
In the event any direct or indirect payment or distribution is made to
a Guarantor in contravention of this Section 12, such payment or
distribution shall be deemed received in trust for the benefit of the
Guaranteed Parties and shall be immediately paid over to the Guaranteed
Parties for application against the Guaranteed Obligations in accordance
with the terms of the Agreements.
Each Guarantor agrees to execute such additional documents as the
Guaranteed Parties may reasonably request to evidence the subordination
provided for in this Section 12.
SECTION 13. Savings Clause. (a) It is the intent of each Guarantor
and the Guaranteed Parties that each Guarantor's maximum obligations
hereunder shall be, but not in excess of:
(i) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code on or within one year from
the date on which any of the Guaranteed Obligations are incurred,
the maximum amount which would not otherwise cause the Guaranteed
Obligations (or any other obligations of such Guarantor to the
Guaranteed Parties) to be avoidable or unenforceable against such
Guarantor under (A) Section 548 of the Bankruptcy Code or (B) any
state fraudulent transfer or fraudulent conveyance act or statute
applied in such case or proceeding by virtue of Section 544 of
the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code subsequent to one year from
the date on which any of the Guaranteed Obligations are incurred,
the maximum amount which would not otherwise cause the Guaranteed
Obligations (or any other obligations of the Guarantor to the
Guaranteed Parties) to be avoidable or unenforceable against such
Guarantor under any state fraudulent transfer or fraudulent
conveyance act or statute applied in any such case or proceeding
by virtue of Section 544 of the Bankruptcy Code; or
(iii) in a case or proceeding commenced by or against
such Guarantor under any law, statute or regulation other than
the Bankruptcy Code (including, without limitation, any other
bankruptcy, reorganization, arrangement, moratorium, readjustment
of debt, dissolution, liquidation or similar debtor relief laws),
the maximum amount which would not otherwise cause the Guaranteed
Obligations (or any other obligations of such Guarantor to the
Guaranteed Parties) to be avoidable or unenforceable against such
Guarantor under such law, statute or regulation including,
without limitation, any state fraudulent transfer or fraudulent
conveyance act or statute applied in any such case or proceeding.
(The substantive laws under which the possible avoidance or
unenforceability of the Guaranteed Obligations (or any other obligations of
such Guarantor to the Guaranteed Parties) shall be determined in any such
case or proceeding shall hereinafter be referred to as the "Avoidance
Provisions").
(b) To the end set forth in Section 13(a), but only to the
extent that the Guaranteed Obligations would otherwise be subject
to avoidance under the Avoidance Provisions if such Guarantor is
not deemed to have received valuable consideration, fair value or
reasonably equivalent value for the Guaranteed Obligations, or if
the Guaranteed Obligations would render the Guarantor insolvent,
or leave the Guarantor with an unreasonably small capital to
conduct its business, or cause the Guarantor to have incurred
debts (or to have intended to have incurred debts) beyond its
ability to pay such debts as they mature, in each case as of the
time any of the Guaranteed Obligations are deemed to have been
incurred under the Avoidance Provisions and after giving effect
to contribution as among Guarantors, the maximum Guaranteed
obligations for which such Guarantor shall be liable hereunder
shall be reduced to that amount which, after giving effect
thereto, would not cause the Guaranteed Obligations (or any other
obligations of such Guarantor to the Guaranteed Parties), as so
reduced, to be subject to avoidance under the Avoidance
Provisions. This Section 13(b) is intended solely to preserve
the rights of the Guaranteed Parties hereunder to the maximum
extent that would not cause the Guaranteed Obligations of any
Guarantor to be subject to avoidance under the Avoidance
Provisions, and neither such Guarantor nor any other Person shall
have any right or claim under this Section 13 as against the
Guaranteed Parties that would not otherwise be available to such
Person under the Avoidance Provisions.
SECTION 14. Information. Each of the Guarantors assumes all
responsibility for being and keeping itself informed of Hughes' financial
condition and assets, and of all other circumstances bearing upon the risk
of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks that such Guarantor assumes and incurs hereunder, and
agrees that none of the Guaranteed Parties will have any duty to advise any
of the Guarantors of information known to it or any of them regarding such
circumstances or risks.
SECTION 15. Survival of Agreement. All agreements, representations
and warranties made herein shall survive the execution and delivery of this
Guarantee.
SECTION 16. Counterparts. This Guarantee and any amendments,
waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same
instrument.
SECTION 17. Additional Guarantors. Upon execution and delivery by
any Material Subsidiary of Hughes of an instrument in the form of this
Guarantee, such Material Subsidiary of Hughes shall become a Guarantor
hereunder with the same force and effect as if originally named a Guarantor
herein (each an "Additional Guarantor"). The execution and delivery of any
such instrument shall not require the consent of any Guarantor hereunder.
The rights and obligations of each Guarantor hereunder shall remain in full
force and effect notwithstanding the addition of any Additional Guarantor
as a party to this Guarantee.
SECTION 18. Successors and Assigns. This Guarantee shall be binding
upon the successors and assigns of the Guarantors. This Guarantee shall
inure to the benefit of the successors and assigns of the Guaranteed
Parties including any subsequent holder of any Notes. No Guarantor may
assign its obligations hereunder to any other Person.
SECTION 19. Defined Terms. All capitalized terms used herein and not
otherwise defined herein shall have their respective defined meanings as
set forth in the Agreements.
IN WITNESS WHEREOF, each Guarantor and Hughes caused this Guarantee to be
duly executed and delivered by their respective duly authorized officers as of
the date first above written.
ATLANTIC PUMP & EQUIPMENT COMPANY
OF MIAMI, INC.
CAROLINA PUMP AND SUPPLY CORP.
COASTAL WHOLESALE, INC.
DOMINION PIPE & SUPPLY, CO.
ELASCO AGENCY SALES, INC.
ELEC-TEL SUPPLY COMPANY
ELECTRIC LABORATORIES AND SALES
CORPORATION
FLORIDA PIPE & SUPPLY COMPANY
GPEC, INC.
GAYLE SUPPLY COMPANY, INC.
GILLELAND CONCRETE PRODUCTS, INC.
H VENTURE CORP.
HHH, INC.
HUGHES ACQUISITION CORP.
HUGHES AVIATION
HUGHES SUPPLY FSC, INC.
JI SERVICES CORPORATION
J & J, INC.
JUNO INDUSTRIES, INC.
METALS, INC. - GULF COAST DIVISION
METALS, INCORPORATED
MILLS & LUPTON SUPPLY COMPANY
MOORE ELECTRIC SUPPLY, INC.
OLANDER & BROPHY, INCORPORATED
ONE STOP SUPPLY, INC.
PALM POOL PRODUCTS, INC.
PAINE SUPPLY OF JACKSON, INC.
PANHANDLE PIPE & SUPPLY CO., INC.
PORT CITY ELECTRICAL SUPPLY, INC.
R & G PLUMBING SUPPLY, INC.
[Guarantor Subsidiaries continued on next page]
[Page 2 of Guarantee Signature Page]
SHRADER HOLDING COMPANY, INC.
SOUTHWEST STAINLESS, L.P.
STAINLESS TUBULAR PRODUCTS, INC.
SUNBELT SUPPLY COMPANY
USCO INCORPORATED
WHOLESALE ELECTRIC SUPPLY
CORPORATION
By:
Title:
Address for Notices:
[Insert Guarantor]
c/o Hughes Supply, Inc.
20 North Orange Avenue
Orlando, Florida 32801
Attention: General Counsel
SECTION 12 OF THE
FOREGOING GUARANTEE
ACKNOWLEDGED AND
AGREED TO:
HUGHES SUPPLY, INC.
By: /s/ J. Stephen Zepf
Name: J. Stephen Zepf
Title: Treasurer and Chief Financial Officer
EXHIBIT 4.11(b) TO NOTE PURCHASE AGREEMENT
Form of Contribution Agreement
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT, dated as of August [28], 1997 (this
"Contribution Agreement"), by and among HUGHES SUPPLY, INC. ("Hughes"), a
corporation organized and existing under the laws of the State of Florida
and each of the undersigned signatories hereto as Guarantors (each of such
undersigned referred to herein as a "Guarantor" and collectively the
"Guarantors") for the purpose of establishing rights and obligations of
contribution among the Guarantors in connection with the Guarantee
Agreement (as such term is defined below).
R E C I T A L S
WHEREAS, Hughes Supply, Inc., a corporation organized and
existing under the laws of the State of Florida ("Hughes"), and [List exact
names of Purchasers] the foregoing corporations, together with their
successors and assigns, individually a "Guaranteed Party" and collectively
the "Guaranteed Parties") have entered into those certain identical (except
for the names of the purchasers and the amounts of Notes, as defined below,
to be purchased) Note Purchase Agreements dated as of August [28],
1997(together the "Agreements" and separately each an "Agreement"),
pursuant to which Hughes has issued to the Guaranteed Parties its 7.14%
Senior Notes due May 30, 2012 and its 7.19% Senior Notes dated May 30,
2012(the "Notes"), in the aggregate principal amount of $80,000,000;
WHEREAS, the obligation of Guaranteed Parties to purchase the
Notes under the Agreements is conditioned on, among other things, the
provision of a Contribution Agreement in the form hereof;
WHEREAS, the Guarantors have entered into the Subsidiary
Guarantee Agreement dated as of even date herewith (the "Guarantee
Agreement") pursuant to which such Guarantors have agreed to guarantee all
the obligations of Hughes pursuant to the Agreements and all other
Guaranteed Obligations;
WHEREAS, as a result of transactions contemplated by the
Agreements, Guarantors will benefit from the Guaranteed Obligations and in
consideration thereof desire to enter into this Contribution Agreement to
provide a fair and equitable arrangement to make contributions in the event
payments are made under the Guarantee Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Hughes, each Guarantor hereby agrees as
follows:
SECTION 1. Indemnity and Subrogation. In addition to all
such rights of indemnity and subrogation as the Guarantors may have under
applicable law (but subject to Section 3), Hughes agrees that in the event
a payment shall be made by any Guarantor under the Guarantee Agreement in
respect of any Guaranteed Obligations, Hughes shall indemnify such
Guarantor for the full amount of such payment. Each Guarantor has waived
its rights to subrogation, pursuant to Section 4 of the Guarantee
Agreement.
SECTION 2. Contribution and Subrogation. Each Guarantor
agrees (subject to Section 3) that in the event a payment shall be made by
any Guarantor under the Guarantee Agreement or assets of any Guarantor
shall be sold to satisfy a claim of any Guaranteed Party, and such
Guarantor (the "Claiming Guarantor") shall not have been indemnified by
Hughes as provided in Section 1, each other Guarantor (a "Contributing
Guarantor") shall indemnify the Claiming Guarantor in an amount equal to
the amount of such payment or the greater of the book value or the fair
market value of such assets, as the case may be, multiplied by a fraction,
the numerator of which shall be the net worth of the Contributing Guarantor
on the date hereof, and the denominator of which shall be the sum of the
net worth of all the Guarantors on the date hereof. Any Contributing
Guarantor making any payment to a Claiming Guarantor pursuant to this
Section 2 shall be subrogated to the rights of such Claiming Guarantor
under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of
this Agreement to the contrary, (i) all rights of the Guarantors under
Sections 1 and 2 and all other rights of indemnity or contribution under
applicable law or otherwise shall be fully subordinated to the indefeasible
payment in full in cash of the Guaranteed Obligations, and (ii) no such
rights shall be exercised until all of the Guaranteed Obligations shall
have been irrevocably paid in full in cash and the Agreements shall have
been irrevocably terminated. If any amount shall be paid to any Guarantor
on account of such indemnity or contribution rights at any time when all of
the Guaranteed Obligations shall not have been paid in full in cash, such
amount shall be held in trust for the benefit of the Guaranteed Parties and
shall forthwith be paid to the Guaranteed Parties to be credited and
applied upon the Guaranteed Obligations in accordance with the terms of the
Agreements. No failure on the part of Hughes or any Guarantor to make the
payments required by Sections 1 and 2 (or any other payments required under
applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Guarantor with respect to the Guarantee Agreement, and
each Guarantor shall remain liable for the full amount of the obligations
of such Guarantor under such Guarantee Agreement.
SECTION 4. Allocation. If at any time there exists more than
one Claiming Guarantor with respect to the Guarantee Agreement, then
payment from other Guarantors pursuant to this Contribution Agreement shall
be allocated among such Claiming Guarantors in proportion to the total
amount of money paid for or on account of the Guaranteed Obligations by
each such Claiming Guarantor pursuant to the Guarantee Agreement.
SECTION 5. Preservation of Rights. This Contribution
Agreement shall not limit or affect any right which any Guarantor may have
against any other Person that is not a party hereto.
SECTION 6. Subsidiary Payment. The amount of contribution
payable under this Contribution Agreement by any Guarantor with respect to
the Guarantee Agreement shall be reduced by the amount of any contribution
paid hereunder by a Subsidiary of such Guarantor with respect to the
Guarantee Agreement.
SECTION 7. Asset Sale. If all of the stock of any Guarantor
shall be sold or otherwise disposed of (including by merger or
consolidation) in an asset sale not prohibited by the Agreements or
otherwise consented to by the Guaranteed Parties under the Agreements, the
agreements of such Guarantor hereunder shall automatically be discharged
and released without any further action by such Guarantor and shall be
assumed in full by the corporation which prior to such asset sale or
consent owned the stock of such Guarantor, effective as of the time of such
asset sale or consent. Hughes shall cause any such corporation which is
not a Guarantor to become a party to this Contribution Agreement and the
Guarantee Agreement unless otherwise agreed in writing by the Guaranteed
Parties.
SECTION 8. Equitable Allocation. If as a result of any
reorganization, recapitalization or other corporate change in Hughes or any
of its Subsidiaries, or as a result of any amendment, waiver or
modification of the terms and conditions governing the Guarantee Agreement
or any of the Guaranteed Obligations, or for any other reason, the
contributions under this Contribution Agreement become inequitable, the
parties hereto shall promptly modify and amend this Contribution Agreement
to provide for an equitable allocation of contributions. All such
modifications and amendments shall be in writing and signed by all parties
hereto.
SECTION 9. Asset of Party to Which Contribution and
Indemnification Are Owing. The parties hereto acknowledge that the right
to contribution and indemnification hereunder shall each constitute an
asset in favor of the party to which such contribution or indemnification
is owing.
SECTION 10. Successors and Assigns; Amendments. This
Contribution Agreement shall be binding upon each party hereto and its
respective successors and assigns and shall inure to the benefit of the
parties hereto and their respective successors and assigns. None of any
Guarantor's rights or any interest therein under this Contribution
Agreement may be assigned or transferred without the written consent of the
Guaranteed Parties. In the event of any such transfer or assignment of
rights by any Guarantor, the rights and privileges herein conferred upon
that Guarantor shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof.
This Contribution Agreement shall not be amended without the prior written
consent of the Guaranteed Parties.
SECTION 11. Termination. This Contribution Agreement, as it
may be modified or amended from time to time, shall remain in effect, and
shall not be terminated as to the Guarantee Agreement, until the Guarantee
Agreement has been discharged or otherwise satisfied in accordance with its
terms.
SECTION 12. CHOICE OF LAW. THIS CONTRIBUTION AGREEMENT SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF.
SECTION 13. Counterparts. This Contribution Agreement and any
amendments, waivers, consents or supplements may be executed in any number
of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed
an original, but all such counterparts shall constitute but one and the
same instrument.
SECTION 14. Additional Guarantors. Upon execution and
delivery, after the date hereof, by a Material Subsidiary of Hughes of an
instrument in the form of this Contribution Agreement, such Material
Subsidiary of Hughes shall become a Guarantor hereunder with the same force
and effect as if originally named as a Guarantor hereunder. The rights and
obligations of each Guarantor hereunder shall remain in full force and
effect notwithstanding the addition of any new Guarantor as a party to this
Contribution Agreement.
SECTION 15. Severability. In case any provision in or
obligation under this Contribution Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality or enforceability
of the remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
SECTION 16. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic or telecopy communication) and mailed, telegraphed, telecopied
or delivered, if to any Guarantor, addressed to it at the address set forth
for such party in the Guarantee Agreement, and if to any other party, at
the address set forth for such party in the Agreements. All such notices
and other communications shall be given and deemed to have been received as
provided by the terms of the Agreements.
SECTION 17. Defined Terms. All capitalized terms used herein
and not defined herein shall have their respective defined meanings as set
forth or used in the Guarantee Agreement.
IN WITNESS WHEREOF, Hughes and the Guarantors have duly executed
this Contribution Agreement as of the day and year first above written.
HUGHES SUPPLY, INC.
By: /s/ J. Stephen Zepf
Title: Treasurer
THE GUARANTORS:
ATLANTIC PUMP & EQUIPMENT COMPANY
OF MIAMI, INC.
CAROLINA PUMP AND SUPPLY CORP.
COASTAL WHOLESALE, INC.
DOMINION PIPE & SUPPLY, CO.
ELASCO AGENCY SALES, INC.
ELEC-TEL SUPPLY COMPANY
ELECTRIC LABORATORIES AND SALES
CORPORATION
FLORIDA PIPE & SUPPLY COMPANY
GPEC, INC.
GAYLE SUPPLY COMPANY, INC.
GILLELAND CONCRETE PRODUCTS, INC.
H VENTURE CORP.
HHH, INC.
HUGHES ACQUISITION CORP.
HUGHES AVIATION
HUGHES SUPPLY FSC, INC.
JI SERVICES CORPORATION
J & J, INC.
JUNO INDUSTRIES, INC.
METALS, INC. - GULF COAST DIVISION
METALS, INCORPORATED
MILLS & LUPTON SUPPLY COMPANY
MOORE ELECTRIC SUPPLY, INC.
OLANDER & BROPHY, INCORPORATED
ONE STOP SUPPLY, INC.
PALM POOL PRODUCTS, INC.
[Guarantors continued on next page]
[Page 2 of Contribution Agreement Signature Page
PAINE SUPPLY OF JACKSON, INC.
PANHANDLE PIPE & SUPPLY CO., INC.
PORT CITY ELECTRICAL SUPPLY, INC.
R & G PLUMBING SUPPLY, INC.
SHRADER HOLDING COMPANY, INC.
SOUTHWEST STAINLESS, L.P.
STAINLESS TUBULAR PRODUCTS, INC.
SUNBELT SUPPLY COMPANY
USCO INCORPORATED
WHOLESALE ELECTRIC SUPPLY
CORPORATION
By: /s/ J. Stephen Zepf
Title: Treasurer or Assistant Treasurer
Address for Notices:
[Insert Guarantor]
c/o Hughes Supply, Inc.
20 North Orange Avenue
Orlando, Florida 32801
Attention: General Counsel
==========================================================
HUGHES SUPPLY, INC.
$40,000,000 7.14% Senior Notes due May 30, 2012
$40,000,000 7.19% Senior Notes due May 30, 2012
NOTE PURCHASE AGREEMENT
Dated August 28, 1997
==========================================================
TABLE OF CONTENTS
1. AUTHORIZATION OF NOTES 1
2. SALE AND PURCHASE OF NOTES 1
3. CLOSING 2
4. CONDITIONS TO CLOSING 2
4.1 Representations and Warranties 2
4.2 Performance; No Default 2
4.3 Compliance Certificates 3
4.4 Opinions of Counsel 3
4.5 Purchase Permitted by Applicable Law, etc. 3
4.6 Sale of Other Notes 3
4.7 Payment of Special Counsel Fees 4
4.8 Private Placement Number 4
4.9 Changes in Corporate Structure 4
4.10 Proceedings and Documents 4
4.11 Guarantees of Subsidiaries 4
4.12 Copy of Bank Credit Agreement 4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 5
5.1 Organization; Power and Authority 5
5.2 Authorization, etc. 5
5.3 Disclosure 5
5.4 Organization and Ownership of Shares of Subsidiaries;
Affiliates 6
5.5 Financial Statements 7
5.6 Compliance With Laws, Other Instruments, etc. 7
5.7 Governmental Authorizations, etc. 7
5.8 Litigation; Observance of Agreements, Statutes and
Orders 7
5.9 Taxes 8
5.10 Title to Property; Leases 8
5.11 Licenses, Permits, etc 9
5.12 Compliance With ERISA 9
5.13 Private Offering by the Company 10
5.14 Use of Proceeds; Margin Regulations 10
5.15 Existing Debt; Future Liens 10
5.16 Foreign Assets Control Regulations, etc. 11
5.17 Status Under Certain Statutes 11
5.18 Environmental Matters 11
6. REPRESENTATIONS OF THE PURCHASER 12
6.1 Purchase for Investment 12
6.2 Source of Funds 12
7. INFORMATION AS TO COMPANY 13
7.1 Financial and Business Information 13
7.2 Officer's Certificate 17
7.3 Inspection 17
8. PREPAYMENT OF THE NOTES 18
8.1(A) Series A Required Prepayments 18
8.1(B) Series A Required Prepayments 18
8.2 Optional Prepayments With Make-Whole Amount 19
8.3 Allocation of Partial Prepayments 19
8.4 Maturity; Surrender, etc. 19
8.5 Purchase of Notes 19
8.6 Make-Whole Amount 20
9. AFFIRMATIVE COVENANTS 21
9.1 Compliance With Law 21
9.2 Insurance 22
9.3 Maintenance of Properties 22
9.4 Payment of Taxes and Claims 22
9.5 Corporate Existence, etc. 22
9.6 Covenant To Secure Notes Equally. 23
9.7 Covenant Relating to Subsidiary Guarantees. 23
9.8 Ownership of Subsidiary Guarantors. 23
10. NEGATIVE COVENANTS 23
10.1 Funded Debt. 24
10.2 Current Debt. 24
10.3 Minimum Net Worth. 24
10.4 Restricted Payments. 24
10.5 Liens. 25
10.6 Priority Debt. 27
10.7 Merger or Consolidation. 27
10.8 Sale of Assets. 28
10.9 Transactions With Related Party. 29
10.10 Nature of Business. 29
11. EVENTS OF DEFAULT 29
12. REMEDIES ON DEFAULT, ETC. 31
12.1 Acceleration 31
12.2 Other Remedies 32
12.3 Rescission 32
12.4 No Waivers or Election of Remedies, Expenses, etc. 33
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES 33
13.1 Registration of Notes 33
13.2 Transfer and Exchange of Notes 33
13.3 Replacement of Notes 34
14. PAYMENTS ON NOTES 34
14.1 Place of Payment 34
14.2 Home Office Payment 34
15. EXPENSES, ETC 35
15.1 Transaction Expenses 35
15.2 Survival 36
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT 36
17. AMENDMENT AND WAIVER 36
17.1 Requirements 36
17.2 Solicitation of Holders of Notes 36
17.3 Binding Effect, etc. 37
17.4 Notes Held by Company, etc. 37
18. NOTICES 37
19. REPRODUCTION OF DOCUMENTS 38
20. CONFIDENTIAL INFORMATION 38
21. SUBSTITUTION OF PURCHASER 39
22. MISCELLANEOUS 40
22.1 Successors and Assigns 40
22.2 Payments Due on Non-Business Days 40
22.3 Severability 40
22.4 Construction 40
22.5 Counterparts 40
22.6 Governing Law 41
SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 4.11 -- Subsidiaries Executing and Delivering Guarantees
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of
Subsidiary Stock; Company's Affiliates; Company's
Directors and Senior Officers
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.11 -- Patents, etc.
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Debt
SCHEDULE 10.5 -- Liens
EXHIBIT 1 -- Form of Senior Note
EXHIBIT 4.4(a) -- Matters To Be Covered by Opinion of General
Counsel for the Company
EXHIBIT 4.4(b) -- Matters To Be Covered by Opinion of Special
Counsel to the Purchasers
EXHIBIT 4.11(a) -- Form of Guarantee
EXHIBIT 4.11(b) -- Form of Contribution Agreement
Exhibit 11.1
HUGHES SUPPLY, INC.
SUMMARY SCHEDULE OF EARNINGS PER SHARE CALCULATIONS
(in thousands, except per share amounts)
Potentially dilutive securities:
Options for common stock, issued under stock option plan.
Three Months
Ended July 31,
1997 1996
Line
- ----
SHARES
------
1 Average shares outstanding 17,770 15,632
2 Incremental shares (options) -
Assuming options outstanding at end of period
were exercised at beginning of period (or time
of issuance, if later) and proceeds were used
to purchase shares at average market price
during the period 298 339
---------- ----------
3 Shares used in calculating Earnings Per
Common and Common Equivalent Share 18,068 15,971
4 Incremental shares (options) -
Assuming options outstanding at end of period
were exercised at beginning of period (or time
of issuance, if later) and proceeds were used
to purchase shares at the higher of the
average market price during the period or the
market price at the end of the period; and
that options exercised during the period were
exercised at the beginning of the period (or
time of issuance, if later) and the proceeds
were used to purchase shares at the market
price at the date of exercise 10 4
---------- ----------
5 Shares used in calculating Earnings Per
Common Share - Assuming Full Dilution 18,078 15,975
========== ==========
EARNINGS
--------
6 Net income per financial statements $ 12,283 $ 9,198
========== ==========
RESULTING PER SHARE DATA
------------------------
7 Earnings per common share (Line 6/Line 1) $ .69 $ .59
=========== ===========
8 Earnings per common share and common
equivalent share (Line 6/Line 3) $ .68 $ .58
=========== ===========
9 Dilution 1.4% 1.7%
=========== ===========
10 Earnings per common share - assuming full
dilution (Line 6/Line 5) $ .68 $ .58
=========== ===========
11 Dilution 1.4% 1.7%
=========== ===========
12 Used in statements of income:
[ ] Line 7, if dilution less than 3%, or antidilution, exists for all
periods.
[ X ] Lines 8 and 10, if dilution >= 3% for any period.
Six Months
Ended July 31,
1997 1996
Line
- ----
SHARES
------
1 Average shares outstanding 17,673 14,207
2 Incremental shares (options) -
Assuming options outstanding at end of period
were exercised at beginning of period (or time
of issuance, if later) and proceeds were used
to purchase shares at average market price
during the period 277 297
---------- ----------
3 Shares used in calculating Earnings Per
Common and Common Equivalent Share 17,950 14,504
4 Incremental shares (options) -
Assuming options outstanding at end of period
were exercised at beginning of period (or time
of issuance, if later) and proceeds were used
to purchase shares at the higher of the
average market price during the period or the
market price at the end of the period; and
that options exercised during the period were
exercised at the beginning of the period (or
time of issuance, if later) and the proceeds
were used to purchase shares at the market
price at the date of exercise 41 18
---------- ----------
5 Shares used in calculating Earnings Per
Common Share - Assuming Full Dilution 17,991 14,522
========== ==========
EARNINGS
--------
6 Net income per financial statements $ 20,060 $ 14,721
========== ==========
RESULTING PER SHARE DATA
------------------------
7 Earnings per common share (Line 6/Line 1) $ 1.14 $ 1.04
=========== ===========
8 Earnings per common share and common
equivalent share (Line 6/Line 3) $ 1.12 $ 1.01
=========== ===========
9 Dilution 1.8% 2.9%
=========== ===========
10 Earnings per common share - assuming full
dilution (Line 6/Line 5) $ 1.12 $ 1.01
=========== ===========
11 Dilution 1.8% 2.9%
=========== ===========
12 Used in statements of income:
[ ] Line 7, if dilution less than 3%, or antidilution, exists for all
periods.
[ X ] Lines 8 and 10, if dilution >= 3% for any period.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF HUGHES SUPPLY, INC. AS OF JULY 31, 1997, AND THE
RELATED STATEMENT OF INCOME FOR THE SIX MONTHS THEN ENDED AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000049029
<NAME> HUGHES SUPPLY, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-30-1998
<PERIOD-END> JUL-31-1997
<CASH> 10,712
<SECURITIES> 0
<RECEIVABLES> 251,595
<ALLOWANCES> 5,259
<INVENTORY> 265,458
<CURRENT-ASSETS> 548,612
<PP&E> 159,617
<DEPRECIATION> 71,963
<TOTAL-ASSETS> 748,476
<CURRENT-LIABILITIES> 176,308
<BONDS> 262,096
0
0
<COMMON> 17,916
<OTHER-SE> 289,676
<TOTAL-LIABILITY-AND-EQUITY> 748,476
<SALES> 882,779
<TOTAL-REVENUES> 882,779
<CGS> 693,752
<TOTAL-COSTS> 693,752
<OTHER-EXPENSES> 149,427
<LOSS-PROVISION> 507
<INTEREST-EXPENSE> 8,414
<INCOME-PRETAX> 33,159
<INCOME-TAX> 13,099
<INCOME-CONTINUING> 20,060
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,060
<EPS-PRIMARY> 1.12
<EPS-DILUTED> 1.12
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS OF HUGHES SUPPLY, INC. AND RELATED STATEMENTS OF
INCOME AS OF AND FOR THE PERIODS ENDED APRIL 30, 1997, JANUARY 31, 1997,
OCTOBER 31, 1996, JULY 31, 1996, AND APRIL 30, 1996. THIS SCHEDULE IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000049029
<NAME> HUGHES SUPPLY, INC.
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR 9-MOS 6-MOS 3-MOS
<FISCAL-YEAR-END> JAN-30-1998 JAN-31-1997 JAN-31-1997 JAN-31-1997 JAN-31-1997
<PERIOD-END> APR-30-1997 JAN-31-1997 OCT-31-1996 JUL-31-1996 APR-30-1996
<CASH> 11,110 6,329 3,423 652 3,286
<SECURITIES> 0 0 0 0 0
<RECEIVABLES> 234,751 199,009 223,737 212,380 186,125
<ALLOWANCES> 4,647 3,809 8,611 7,403 6,061
<INVENTORY> 266,776 250,113 224,209 202,296 171,842
<CURRENT-ASSETS> 528,713 476,769 466,011 430,077 376,249
<PP&E> 146,723 140,928 141,062 135,393 129,758
<DEPRECIATION> 67,796 67,890 71,391 67,985 64,561
<TOTAL-ASSETS> 712,591 649,502 625,128 588,416 470,558
<CURRENT-LIABILITIES> 191,964 146,381 162,827 150,611 152,924
<BONDS> 230,438 221,988 194,755 184,853 141,241
0 0 0 0 0
0 0 0 0 0
<COMMON> 17,417 17,277 16,951 16,360 12,841
<OTHER-SE> 270,444 261,657 248,476 234,573 161,653
<TOTAL-LIABILITY-AND-EQUITY> 712,591 649,502 625,128 588,416 470,558
<SALES> 421,385 1,516,088 1,150,670 745,317 349,500
<TOTAL-REVENUES> 421,385 1,516,088 1,150,670 745,317 349,500
<CGS> 332,224 1,200,179 914,270 594,378 280,157
<TOTAL-COSTS> 332,224 1,200,179 914,270 594,378 280,157
<OTHER-EXPENSES> 73,214 255,794 188,332 123,193 58,982
<LOSS-PROVISION> 344 842 2,701 1,683 851
<INTEREST-EXPENSE> 3,981 13,520 9,603 5,926 2,461
<INCOME-PRETAX> 12,856 51,706 40,429 23,745 8,644
<INCOME-TAX> 5,079 19,178 15,293 9,024 3,121
<INCOME-CONTINUING> 7,777 32,528 25,136 14,721 5,523
<DISCONTINUED> 0 0 0 0 0
<EXTRAORDINARY> 0 0 0 0 0
<CHANGES> 0 0 0 0 0
<NET-INCOME> 7,777 32,528 25,136 14,721 5,523
<EPS-PRIMARY> .44 2.05 1.64 1.01 .42
<EPS-DILUTED> .44 2.05 1.64 1.01 .42
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS OF HUGHES SUPPLY, INC. AND RELATED STATEMENTS OF
INCOME AS OF AND FOR THE PERIODS ENDED JANUARY 26, 1996, OCTOBER 31, 1995,
JULY 31, 1995, APRIL 30, 1995, AND JANUARY 27, 1995. THIS SCHEDULE IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000049029
<NAME> HUGHES SUPPLY, INC.
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C> <C>
<PERIOD-TYPE> YEAR 9-MOS 6-MOS 3-MOS YEAR
<FISCAL-YEAR-END> JAN-26-1996 JAN-26-1996 JAN-26-1996 JAN-26-1996 JAN-27-1995
<PERIOD-END> JAN-26-1996 OCT-31-1995 JUL-31-1995 APR-30-1995 JAN-27-1995
<CASH> 3,644 1,792 3,231 2,090 3,774
<SECURITIES> 0 0 0 0 0
<RECEIVABLES> 160,570 176,254 167,261 169,182 146,122
<ALLOWANCES> 4,868 7,903 6,500 5,715 5,224
<INVENTORY> 167,138 153,431 158,607 157,156 149,461
<CURRENT-ASSETS> 353,722 340,419 339,560 339,596 316,142
<PP&E> 123,513 121,522 120,387 118,334 115,528
<DEPRECIATION> 60,762 59,360 58,471 57,593 56,381
<TOTAL-ASSETS> 440,795 429,100 425,211 424,581 391,153
<CURRENT-LIABILITIES> 136,576 132,232 124,117 138,042 119,190
<BONDS> 131,682 127,661 137,176 128,441 121,728
0 0 0 0 0
0 0 0 0 0
<COMMON> 12,698 12,661 12,718 12,722 12,421
<OTHER-SE> 158,068 154,693 149,452 143,730 136,268
<TOTAL-LIABILITY-AND-EQUITY> 440,795 429,100 425,211 424,581 391,153
<SALES> 1,242,446 938,481 610,065 289,543 994,811
<TOTAL-REVENUES> 1,242,446 938,481 610,065 289,543 994,811
<CGS> 989,214 750,121 487,198 230,824 797,123
<TOTAL-COSTS> 989,214 750,121 487,198 230,824 797,123
<OTHER-EXPENSES> 212,039 155,496 101,611 49,657 169,202
<LOSS-PROVISION> 1,907 2,454 1,247 625 1,415
<INTEREST-EXPENSE> 9,380 7,133 4,772 2,252 6,414
<INCOME-PRETAX> 34,867 27,111 17,549 7,192 23,860
<INCOME-TAX> 11,661 8,980 5,643 2,183 7,979
<INCOME-CONTINUING> 23,206 18,131 11,906 5,009 15,881
<DISCONTINUED> 0 0 0 0 0
<EXTRAORDINARY> 0 0 0 0 0
<CHANGES> 0 0 0 0 0
<NET-INCOME> 23,206 18,131 11,906 5,009 15,881
<EPS-PRIMARY> 1.82 1.42 .94 .40 1.34
<EPS-DILUTED> 1.80 1.41 .94 .40 1.32
</TABLE>
