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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 27, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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JUNO LIGHTING, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 3640 36-2852993
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
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1300 SOUTH WOLF ROAD
DES PLAINES, ILLINOIS 60018
(847) 827-9880
(Address, including Zip Code, and Telephone Number, including Area Code,
of Registrant's Principal Executive Offices)
------------------------
GLENN R. BORDFELD
PRESIDENT AND CHIEF OPERATING OFFICER
JUNO LIGHTING, INC.
1300 SOUTH WOLF ROAD
DES PLAINES, ILLINOIS 60018
(847) 827-9880
(Name, Address, including Zip Code, and Telephone Number, including Area Code,
of Agent for Service)
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COPIES TO:
GREGORY C. SMITH, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
525 UNIVERSITY AVE, SUITE 220
PALO ALTO, CALIFORNIA 94301
(650) 470-4500 TELEPHONE
(650) 470-4570 FACSIMILE
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APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register securities for an offering pursuant to
Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED
MAXIMUM PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE(1)
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11 7/8% Series B Senior Subordinated
Notes
Due 2009............................... $125,000,000 100% $125,000,000 $34,750
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Guarantees of the 11 7/8% Series B Senior
Subordinated Notes Due 2009(2)......... -- -- -- --
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(f) under the Securities Act.
(2) No separate consideration will be received for the Guarantees, and,
therefore, no additional registration fee is required.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
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CO-REGISTRANTS
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STATE OR OTHER I.R.S.
JURISDICTION OF PRIMARY STANDARD EMPLOYER
EXACT NAME OF CO-REGISTRANT INCORPORATION OR INDUSTRIAL CLASSIFICATION IDENTIFICATION
AS SPECIFIED IN ITS CHARTER ORGANIZATION CODE NUMBER NUMBER
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Juno Manufacturing, Inc. ............................. Illinois 3640 36-4180708
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Indy Lighting, Inc. .................................. Indiana 3640 35-1174751
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Advanced Fiberoptic Technologies, Inc. ............... Florida 3640 59-3392179
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION -- DATED AUGUST 27, 1999
PROSPECTUS
OFFER TO EXCHANGE ALL
11 7/8% SERIES A SENIOR SUBORDINATED NOTES DUE 2009 FOR
11 7/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2009
OF
[JUNO LIGHTING INC. LOGO]
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.
NEW YORK CITY TIME, ON , 1999, UNLESS EXTENDED.
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TERMS OF THE EXCHANGE OFFER:
- We are offering a total of $125,000,000 new notes, which are registered
with the Securities and Exchange Commission, to all holders of our old
notes.
- We will exchange for new notes all outstanding old notes that are validly
tendered and not validly withdrawn.
- You may withdraw tenders of old notes at any time before the exchange
offer expires.
- We will not receive any cash proceeds from the exchange offer.
- The exchange of notes will not be a taxable exchange for U.S. federal
income tax purposes.
- The economic terms of the new notes are identical to those of the old
notes.
- The old notes are, and the new notes will be, guaranteed on a senior
subordinated basis by each of our material existing and future domestic
subsidiaries.
- There is no existing market for the new notes, and we do not intend to
apply for their listing on any securities exchange or for quotation
through the Nasdaq Stock Market.
INVESTING IN THE NEW NOTES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE NOT REQUESTED TO SEND US A
PROXY.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE NOTES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS , 1999
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This prospectus incorporates by reference important business and financial
information about us which is not included in or delivered with this prospectus.
See "Available Information" and "Incorporation by Reference." You can obtain any
of the documents incorporated by reference in this prospectus through us or from
the Securities and Exchange Commission through its web site at
http://www.sec.gov. Documents incorporated by reference are available from us
without charge, excluding all exhibits unless we have specifically incorporated
by reference an exhibit in this prospectus. You can obtain documents
incorporated by reference in this prospectus by writing to us at Juno Lighting,
Inc., 1300 South Wolf Road, Des Plaines, Illinois 60018, Attention: Chief
Financial Officer, or calling us at (847) 827-9880.
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TABLE OF CONTENTS
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PAGE
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Summary.............................. 1
Risk Factors......................... 5
Use of Proceeds...................... 11
Capitalization....................... 12
Selected Consolidated Financial
Data............................... 13
The Exchange Offer................... 15
Management's Discussion and Analysis
of Results of Operations and
Financial Condition................ 22
Business............................. 27
Management........................... 34
Certain Relationships and Related
Party Transactions................. 36
Description of Capital Stock......... 38
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Security Ownership of Certain
Beneficial Owners and Management... 40
Executive Compensation............... 43
Description of Senior Credit
Facilities......................... 45
Description of Notes................. 47
United States Federal Tax
Consequences....................... 85
Plan of Distribution................. 89
Legal Matters........................ 89
Independent Public Accountants....... 90
Available Information................ 90
Incorporation by Reference........... 90
Pro Forma Consolidated Financial
Data............................... P-1
Index to Financial Statements........ F-1
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Juno, Indy, Air-Loc, Real Nail, Trac-Master and Wireforms are registered
trademarks of Juno.
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This prospectus is based on information provided by us and other sources
that we believe are reliable. However, we cannot assure you that the information
provided by these other sources is accurate or complete. For example, in
preparing estimates of market share and industry data, we utilized third party
sources when possible, but cannot verify some of the estimates through
independent sources. Certain of the data cited herein regarding markets and
Juno's positions and the positions of other manufacturers within these markets,
such as (1) the size of the U.S. recessed and track lighting market segments,
(2) Juno's industry-leading position in both the styling and development of
recessed and track lighting products and (3) Juno's reputation as an industry
leader in customer service, are not the product of independent research or
market share studies. Juno believes these statements are accurate as of the date
of this prospectus, based upon its knowledge of the industry and its
communications with its customers. However, these statements may prove to be
inaccurate.
i
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FORWARD-LOOKING STATEMENTS MAY BE INACCURATE
This prospectus (including information we have incorporated into this
prospectus by reference) contains forward-looking statements that are subject to
risks and uncertainties. You should not place undue reliance on those
statements. Forward-looking statements include information concerning our
possible or assumed future results of operations, including descriptions of our
business strategies. These statements often include words such as "believe,"
"expect," "anticipate," "intend," "plan," "estimate," "seek," "will" or "may" or
similar expressions. These statements are based on certain assumptions that we
have made in light of our experience in the industry as well as our perceptions
of historical trends, current conditions, expected future developments and other
factors we believe are appropriate in these circumstances. As you read and
consider this prospectus, you should understand that these statements are not
guarantees of performance or results. They involve risks, uncertainties and
assumptions. Many factors could affect our actual financial results or results
of operations and could cause actual results to differ materially from those in
the forward-looking statements. These factors include:
- general economic or business conditions affecting the lighting fixture
industry being less favorable than expected;
- our failure to develop or successfully introduce new products;
- increased competition in the lighting fixture market;
- substantial increases in our future required capital expenditures;
- the level of remodeling and construction activities;
- disruptions in production or distribution;
- raw material prices;
- our ability to obtain and retain patent and trademark protection for our
designs and inventions and defend ourselves against infringement claims
by other entities; and
- various other factors beyond our control.
All future written and oral forward-looking statements by us or persons
acting on our behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to above. We do not have any obligation or
intention to release publicly any revisions to any forward-looking statements to
reflect events or circumstances in the future or to reflect the occurrence of
unanticipated events. YOU SHOULD READ CAREFULLY THE FACTORS DESCRIBED IN THE
"RISK FACTORS" SECTION OF THIS PROSPECTUS FOR A DESCRIPTION OF CERTAIN RISKS
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER FROM THESE FORWARD-LOOKING STATEMENTS.
ii
<PAGE> 6
SUMMARY
In this prospectus, unless otherwise noted, the words "Juno," "we," "our,"
"ours" and "us" refer only to Juno Lighting, Inc. and its consolidated
subsidiaries. The following summary contains the basic information about this
exchange offer. It does not contain all of the information that is important to
you in deciding whether to exchange your old notes and invest in the new notes.
We encourage you to read the prospectus in its entirety.
OUR COMPANY
We are a leading designer, assembler and marketer of recessed and track
lighting fixtures. Our broad product line is used in commercial and residential
remodeling and new construction. Our principal products use a variety of light
sources and are designed for reliable and flexible function, efficient
operation, attractive appearance and simple installation and servicing.
We were recapitalized on June 30, 1999 in a transaction sponsored by
Fremont Investors I, LLC, a Delaware limited liability company formed by Fremont
Partners, L.P., and certain affiliated entities. The investment by Fremont
Investors represented as of June 30, 1999 on an as-converted basis an indirect
ownership interest of approximately 60.5% of our fully diluted common stock.
THE EXCHANGE OFFER
On June 30, 1999, we completed the private offering of our 11 7/8% Series A
Senior Subordinated Notes due 2009. We entered into a registration rights
agreement with the initial purchasers in the private offering in which we agreed
to deliver to you this prospectus and to complete the exchange offer. If the
exchange offer is not completed on or before November 27, 1999, the interest
rate on the 11 7/8% Series A Senior Subordinated Notes due 2009 will increase by
0.5% per annum during each subsequent 90-day period up to a maximum overall
increase of 2.0% per annum until we complete the exchange offer. You should read
the discussion under the headings "-- Summary Description of the New Notes" and
"Description of the Notes" for more information about the new notes.
We believe that the notes issued in the exchange offer may be resold by you
without compliance with the registration and prospectus delivery provisions of
the Securities Act, unless you are an affiliate of Juno or an underwriter or a
broker-dealer. You should read the discussion under the heading "The Exchange
Offer" for further information regarding the exchange offer and resale of the
notes.
SUMMARY OF THE TERMS OF THE EXCHANGE OFFER
Registration rights
agreement..................... This agreement entitles holders of old notes to
exchange such notes for new, registered notes
with identical economic terms. The exchange
offer will satisfy those rights. After the
exchange offer is complete, you will no longer
be entitled to any exchange or registration
rights with respect to your notes.
The exchange offer............ We are offering to exchange up to $125.0
million of the new notes for up to $125.0
million of the old notes. Old notes may be
exchanged only in $1,000 increments.
Tenders; expiration date;
withdrawal.................... The exchange offer will expire at 5:00 p.m.,
New York City time, on , 1999, unless
we extend it. If you decide to exchange your
old notes for new notes, you must acknowledge
that you are not engaging in, and do not intend
to engage in, a distribution of the new notes.
You may withdraw your tender of old notes at
any time before , 1999. If we decide
for any reason not to accept your notes for
exchange, we will return
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<PAGE> 7
them to you promptly and without expense after
the exchange offer expires or terminates.
Conditions to the exchange
offer......................... We are not required to accept any old notes in
exchange for new notes. We may terminate or
amend the exchange offer if we determine that
the exchange offer violates applicable law or
any applicable interpretation of the
Commission.
Federal tax considerations.... The exchange of old notes for new notes under
the exchange offer will not result in any gain
or loss to you for federal income tax purposes.
Use of proceeds............... We will receive no proceeds from the exchange
offer.
Exchange agent................ Firstar Bank, N.A. is the exchange agent for
the exchange offer. The address and telephone
number of the exchange agent are set forth
under the heading "The Exchange
Offer -- Exchange Agent."
SUMMARY DESCRIPTION OF THE NEW NOTES
The terms of the new notes and the old notes are identical in all material
respects but two:
- the transfer restrictions and registration rights relating to the old
notes do not apply to the new notes; and
- if we do not complete the exchange offer by November 27, 1999, the
interest rate on the old notes will increase by 0.5% per annum during
each subsequent 90-day period up to a maximum overall increase of 2.0%
per annum until we complete it.
Issuer..................... Juno Lighting, Inc., a Delaware corporation.
Securities................. $125.0 million in principal amount of 11 7/8%
Series B Senior Subordinated Notes due 2009.
Maturity................... July 1, 2009.
Interest................... Annual rate: 11 7/8%.
Payment frequency: every six months on January 1
and July 1. First payment: January 1, 2000.
Ranking.................... The notes are senior subordinated debt.
Accordingly, they will rank:
- behind all our existing and future senior debt;
- equally with all our existing and future
subordinated, unsecured debt that does not
expressly provide that it is subordinated to the
notes;
- ahead of any of our future debt that expressly
provides that it is subordinated to the notes;
and
- behind the liabilities of our existing and future
foreign subsidiaries.
Assuming the recapitalization was completed on May
31, 1999, the notes would have been subordinated to
approximately $97.3 million of our senior debt. In
addition, the notes would have been effectively
subordinated to all of the liabilities of our
foreign subsidiary.
Guarantees................. The notes will be unconditionally guaranteed on a
senior subordinated basis by each of our material
existing and future domestic subsidiaries.
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Optional Redemption........ On or after July 1, 2004, we may redeem some or all
of the notes at any time at the redemption prices
described in the section "Description of
Notes -- Optional Redemption."
Prior to July 1, 2002, we may redeem up to 35% of
the notes with the proceeds of public offerings of
our equity at the price listed in the section
"Description of Notes -- Optional Redemption."
Mandatory Offer to
Repurchase................. If we sell certain assets or experience specific
kinds of changes in control, we must offer to
repurchase the notes at the prices listed in the
section "Description of Notes -- Repurchase at the
Option of Holders."
Basic Covenants of
Indenture.................. We will issue the notes under an indenture which
will, among other things, restrict our ability to:
- borrow money;
- pay dividends on stock or repurchase stock;
- make investments;
- use assets as security in other transactions; and
- sell certain assets or merge with or into other
companies.
See "Description of Notes -- Certain Covenants."
YOU SHOULD REFER TO THE SECTION ENTITLED "RISK FACTORS" FOR AN EXPLANATION
OF CERTAIN RISKS OF INVESTING IN THE NOTES.
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Our executive offices are located at 1300 South Wolf Road, Des Plaines,
Illinois 60018 and our telephone number is (847) 827-9880.
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SUMMARY CONSOLIDATED FINANCIAL DATA
The summary historical financial data set forth below for the fiscal years
ended November 30, 1996, 1997 and 1998 and the six-month periods ended May 31,
1998 and 1999 are derived from and should be read in conjunction with the
audited financial statements and the unaudited quarterly financial statements of
Juno and the related notes thereto appearing elsewhere in this prospectus. The
historical consolidated financial data of Juno for the six-month periods ended
and as of May 31, 1998 and 1999, in the opinion of our management, contain all
adjustments (consisting only of normally recurring adjustments) necessary for a
fair presentation of such data. The summary pro forma financial data for Juno
set forth below has been derived from the pro forma financial data included
elsewhere in this prospectus and gives effect to the recapitalization. The pro
forma statement of operations data and other financial data give effect to the
recapitalization as if it had occurred on December 1, 1997, and the pro forma
balance sheet data gives effect to the recapitalization as if it had occurred on
May 31, 1999. The pro forma financial data does not purport to represent what
Juno's financial position and results of operations would have been if the
recapitalization had actually been completed as of the dates indicated and is
not intended to project Juno's financial position or results of operations for
any future period.
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SIX MONTHS ENDED PRO FORMA
YEAR ENDED NOVEMBER 30, MAY 31, TWELVE MONTHS
------------------------------ ----------------- ENDED
1996 1997 1998 1998 1999 MAY 31, 1999
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(DOLLARS IN THOUSANDS)
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STATEMENT OF OPERATIONS DATA:
Net sales.............................. $131,479 $139,855 $160,941 $75,232 $82,781 $168,490
Gross profit........................... 63,160 67,974 81,059 37,271 40,749 84,537
Operating income....................... 26,394 27,373 36,976 15,930 18,077 38,798
Net income............................. $ 19,897 $ 20,303 $ 26,625 $11,587 $13,315 $ 9,188
OTHER FINANCIAL DATA:
EBITDA(1).............................. $ 29,468 $ 30,857 $ 40,654 $17,772 $20,153 $ 43,035
Depreciation and amortization.......... 3,074 3,484 3,678 1,842 2,076 3,912
Capital expenditures................... 13,316 13,226 5,293 2,536 3,133 5,890
Gross margin........................... 48.0% 48.6% 50.4% 49.5% 49.2% 50.2%
EBITDA margin.......................... 22.4% 22.1% 25.3% 23.6% 24.3% 25.5%
PRO FORMA FINANCIAL DATA:
Ratio of EBITDA to cash interest
expense.............................. 1.9x
Ratio of debt to EBITDA................ 5.1x
Pro forma ratio of earnings to fixed
charges(2)........................... 1.5x 1.5x 1.6x
Pro forma ratio of earnings to combined
fixed charges and preferred stock
dividend(3).......................... 1.0x 0.9x 1.0x
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MAY 31, 1999
--------------------
ACTUAL PRO FORMA
BALANCE SHEET DATA: -------- ---------
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Cash and marketable securities.............................. $102,717 $ 1,000
Working capital............................................. 152,546 49,134
Total assets................................................ 217,599 125,629
Total debt.................................................. 3,325 221,363
Stockholders' equity (deficit).............................. 200,417 (109,591)
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(1) EBITDA is defined as operating income before depreciation, amortization and,
on a pro forma basis, a management fee payable to Fremont Partners L.L.C.
EBITDA is presented because it is a widely accepted financial indicator used
by certain investors and analysts to analyze and compare companies on the
basis of operating performance. EBITDA is not intended to represent cash
flows for the period, is not presented as an alternative to operating income
as an indicator of operating performance, should not be considered in
isolation or as a substitute for measures of performance prepared in
accordance with generally accepted accounting principles in the United
States ("GAAP") and is not indicative of operating income or cash flow from
operations as determined under GAAP.
(2) In calculating the pro forma ratio of earnings to fixed charges, earnings
consist of income before taxes plus fixed charges. Fixed charges consist of
interest expense (which includes amortization of deferred financing costs
and debt issuance costs) and one-third of rental expense, deemed
representative of that portion of rental expense, estimated to be
attributable to interest.
(3) In calculating the pro forma ratio of earnings to combined fixed charges and
preferred stock dividend, earnings consist of income before taxes plus fixed
charges. Fixed charges consist of interest expense (which includes
amortization of deferred financing costs and debt issuance costs) and
one-third of rental expense, deemed representative of that portion of rental
expense, estimated to be attributable to interest, and non-cash dividends
payable on our Series A convertible preferred stock issued to Fremont
Investors or its assigns in the recapitalization.
4
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RISK FACTORS
You should read and consider carefully each of the following factors, as
well as the other information contained in or incorporated by reference into
this prospectus, before making a decision to tender your old notes in the
Exchange Offer. The risk factors set forth below (other than the first risk
factor described below) are generally applicable to the old notes as well as the
new notes.
RISKS RELATED TO THE NOTES
If You Do Not Exchange Your Notes Pursuant to this Exchange, You Might Not Be
Able to Ever Sell Your Notes.
It may be difficult for you to sell notes that are not exchanged in the
exchange offer. Those notes may not be offered or sold unless they are
registered or there are exemptions from the registration requirements under the
Securities Act and applicable state securities laws.
If you do not tender your old notes or if we do not accept some of your old
notes, those notes will continue to be subject to the transfer and exchange
restrictions in:
- the indenture,
- the legend on the old notes, and
- the offering memorandum relating to the old notes.
The restrictions on transfer of your old notes arise because we issued the
old notes pursuant to an exemption from the registration requirements of the
Securities Act and applicable state securities laws. In general, you may only
offer or sell the old notes if they are registered under the Securities Act and
applicable state securities laws, or offered and sold pursuant to an exemption
from such requirements. We do not intend to register the old notes under the
Securities Act. To the extent old notes are tendered and accepted in the
exchange offer, the trading market, if any, for the old notes would be adversely
affected.
We Are Substantially Leveraged and Have Limited Liquidity, Which Could Limit Our
Flexibility to Obtain Additional Capital or Grow Our Business.
We have recently incurred approximately $222.3 million of indebtedness,
consisting of $97.3 million of borrowings under senior credit facilities and
$125 million of senior subordinated notes in connection with the
recapitalization. These funds were used to fund a portion of the consideration
paid in the recapitalization and transaction expenses associated with the
recapitalization. The terms of the indebtedness include significant operating
and financial restrictions, such as limits on our ability to incur indebtedness,
create liens, sell assets, engage in mergers or consolidations, make investments
and pay dividends. In addition, under the senior credit facilities, we are
required to comply with certain financial covenants. See "Description of Senior
Credit Facilities."
As of May 31, 1999, after giving pro forma effect to the recapitalization,
we had approximately $235.2 million of total liabilities. This substantial
leverage may have important consequences for us, including the following:
- Our ability to obtain additional financing for working capital, capital
expenditures or other purposes may be impaired or any such financing may
not be available on terms favorable to us;
- During certain periods, a substantial portion of our cash flow available
from operations will be dedicated to the payment of principal and
interest expense, thereby reducing the funds that would otherwise be
available to us for operations and future business opportunities;
- Certain of our borrowings will be at variable rates of interest, which
could result in higher interest expense;
- A substantial decrease in operating income and cash flows or an increase
in expenses may make it difficult for us to meet our debt service
requirements or force us to modify our operations; and
5
<PAGE> 11
- Our substantial leverage may make us more vulnerable to economic
downturns and competitive pressure.
In addition, substantial leverage will have a negative effect on our net
income. Pro forma net income for the fiscal year ended November 30, 1998 and the
six months ended May 31, 1999 would have been $7.9 million and $3.7 million,
respectively, as compared to $26.6 million and $13.3 million, respectively, for
the same periods on a historical basis, and pro forma interest expense for
fiscal 1998 and the six months ended May 31, 1999 would have increased to $23.6
million and $11.7 million, respectively.
Our principal sources of liquidity are cash flow from our operations and
our revolving credit facility. Our ability to make scheduled payments of the
principal of, or to pay interest on, or to refinance our indebtedness and to
make scheduled payments under our other obligations depends on our future
performance, which is subject to economic, financial, competitive and other
factors beyond our control. Our business may not continue to generate sufficient
cash flow from operations in the future to service our debt and make necessary
capital expenditures after satisfying certain liabilities arising in the
ordinary course of business. If we are unable to do so, we may be required to
refinance all or a portion of our debt, sell assets or obtain additional
financing, and we cannot be assured of being able to complete such actions.
Our Business Activities and Our Ability to Raise Additional Funds Are Limited by
Covenants Under the Indenture and Senior Credit Facilities.
The indenture and the senior credit facilities contain numerous restrictive
covenants, including, but not limited to, covenants that restrict our ability to
incur indebtedness, pay dividends, create liens, sell assets and engage in
certain mergers and acquisitions. In addition, the terms of the senior credit
facilities also require us to maintain certain financial ratios. Our ability to
comply with the covenants and other terms of the indenture and the senior credit
facilities and to satisfy our other respective debt obligations (including,
without limitation, borrowings and other obligations under the senior credit
facilities) and our ability to make cash payments with respect to the notes will
depend on our future operating performance. In the event that we fail to comply
with the various covenants contained in the indenture or the senior credit
facilities, as applicable, we would be in default thereunder and the maturity of
substantially all of our long-term indebtedness could be accelerated.
A default under the indenture would also constitute an event of default
under the senior credit facilities. In addition, the lenders under the senior
credit facilities could elect to declare all amounts borrowed thereunder,
together with accrued interest, to be due and payable. If we were unable to
repay such borrowings, such lenders could proceed against our assets, which
secure our borrowings under the senior credit facilities. If the indebtedness
under the senior credit facilities were to be accelerated, our assets might not
be sufficient to repay such indebtedness and the notes in full. The terms of the
senior credit facilities prohibit the repayment, purchase, redemption,
defeasance or other payment of the notes at any time prior to their stated
maturity. See "Description of Senior Credit Facilities" and "Description of
Notes."
The Notes and Guarantees Are Unsecured Senior Subordinated Obligations.
The indebtedness evidenced by the notes are an unsecured obligation of Juno
and the indebtedness evidenced by the guarantees entered into by subsidiaries of
Juno are unsecured obligations of such subsidiaries. The payment of principal of
and premium, if any, and interest on the notes is subordinated in right of
payment to all senior indebtedness of Juno, including the payment of the senior
credit facilities, and the guarantees entered into by subsidiaries of Juno are
subordinated in right of payment to all senior indebtedness of our subsidiary
guarantors, including the subsidiary guarantors' respective guarantees of the
senior credit facilities. As of May 31, 1999, senior indebtedness of Juno was
approximately $97.3 million, after giving pro forma effect to the
recapitalization.
Because of the subordination provisions of the indenture, in the event of
insolvency, liquidation, reorganization, dissolution or other winding-up of Juno
or any of our subsidiary guarantors, holders of
6
<PAGE> 12
senior indebtedness of Juno or any of our subsidiary guarantors, as the case may
be, will have to be paid in full before we may make payments in respect of the
notes or before any of our subsidiary guarantors make payment in respect of
their subsidiary guarantees. In addition, we may not make any payment in respect
of the notes during the continuance of a payment default under any Designated
Senior Debt (as defined in the indenture). As a result, if certain non-payment
defaults exist with respect to Designated Senior Debt, the holders of such
Designated Senior Debt will be able to prevent payments on the notes for certain
periods of time. See "Description of Notes -- Subordination."
We May Not Be Able to Purchase the Notes upon a Change of Control, Which May
Prevent Us from Entering into Certain Business Combinations.
If we undergo a change of control, we may need to refinance large amounts
of our debt, including the debt under the notes and under the senior credit
facilities. If a change of control occurs, we must offer to buy back the notes
for a price equal to 101% of their principal amount, plus any interest which has
accrued and remains unpaid as of the repurchase date. We would fund any
repurchase obligation with our available cash, cash generated from other sources
such as borrowings, sales of equity, or funds provided by a new controlling
person. However, we cannot assure you that there will be sufficient funds
available for any required repurchases of the notes if a change of control
occurs. In addition, the senior credit facilities prohibit us from repurchasing
the notes after a change of control until we first repay our indebtedness under
the senior credit facilities in full. If we fail to repurchase the notes in that
circumstance, we will go into default under both the notes and the senior credit
facilities. Any future debt which we incur may also contain restrictions on
repayment which come into effect upon a change of control. If a change of
control occurs, we cannot assure you that we will have sufficient funds to
satisfy all of our debt obligations. These buyback requirements may also delay
or make it harder for others to obtain control of Juno. In addition, certain
important corporate events, such as leveraged recapitalizations, that would
increase the level of our indebtedness, would not constitute a change of control
under the indenture. See "Description of Notes -- Repurchase at the Option of
Holders -- Change of Control" and "-- Certain Definitions."
Fraudulent Transfer Risks: Under Certain Circumstances, a Court Could Cancel Our
Obligations Under the Notes or the Subsidiaries' Guarantees.
If we become the debtor in a bankruptcy case or encounter other financial
difficulty, a court could, under the fraudulent transfer provisions of federal
bankruptcy law and corresponding state laws, avoid (i.e., cancel) our
obligations under the notes. A court could do so if it found that, when we
issued the notes, we (1) received less than fair consideration or reasonably
equivalent value and (2) either (a) were or were rendered insolvent, (b) were
engaged in a business or transaction for which our remaining unencumbered assets
constituted unreasonably small capital, or (c) intended to incur or believed (or
should have believed) that we would incur debts beyond our ability to pay.
A court would likely find that we received less than fair consideration or
reasonably equivalent value to the extent that we pay the notes' proceeds to our
stockholders in connection with the recapitalization.
Our material existing and future domestic subsidiaries will guarantee the
notes. Under the laws described above, a court could cancel a subsidiary
guarantee if it found that when the guarantor entered into its guarantee (or, in
some jurisdictions, when payments became due thereunder), clauses (1) and (2)
above applied to the guarantor. A court would likely conclude that a guarantor
did not receive fair consideration or reasonably equivalent value unless it
received direct or indirect benefits from the notes' issuance.
If the court avoids the notes or a guarantee, you would have no rights
against us or the guarantor, respectively, with respect thereto. Moreover, the
court could order you to return any payments received from us or from the
guarantor.
The measure of insolvency for the above purposes will depend on the law of
the jurisdiction being applied. Generally, an entity would be considered
insolvent if the sum of its debts is greater than the fair value of its property
or if the present fair salable value of its assets is less than the amount that
will be
7
<PAGE> 13
required to pay its probable liability on its existing debts as they become
absolute and matured. For these purposes, "debts" includes contingent and
unliquidated debts.
There Is No Established Trading Market for the New Notes and No Guarantee That a
Market Will Develop or That You Will Be Able to Sell Your New Notes.
The new notes will constitute a new issue of securities, and there has not
been an established trading market for the new notes. A market may not develop,
and you may not be able to resell your new notes. Future trading prices of the
new notes will depend on many factors, including, among other things, prevailing
interest rates, our operating results and the market for similar securities. The
initial purchasers have advised us that they currently intend to make a market
in the new notes. However, the initial purchasers are not obligated to do so,
and any market-making may be discontinued at any time without notice.
The liquidity of, and trading market for, the new notes may also be
materially and adversely affected by declines in the market for high yield
securities generally. Such a decline may materially and adversely affect such
liquidity and trading independent of our financial performance and prospects.
RISKS RELATED TO THE RECAPITALIZATION
We Are Controlled by Fremont Investors
Fremont Investors own a new series of convertible preferred stock initially
representing as of June 30, 1999, on an as-converted basis, approximately 60.5%
of the fully diluted common stock of Juno. Fremont Investors have significant
voting power to control the direction and policies of Juno, the election of all
directors and the outcome of any matter requiring stockholder approval,
including adopting amendments to our certificate of incorporation and approving
the merger or a sale of all or substantially all of our assets. The directors
elected by Fremont Investors have the authority to make decisions affecting the
appointment of new management and the capital structure of Juno, including the
issuance of additional capital stock, the implementation of stock repurchase
programs and the declaration of dividends, if any.
We Are a Defendant in a Lawsuit Challenging the Recapitalization That Could
Adversely Affect Our Business.
One of our stockholders has brought a purported class action lawsuit
against us, our directors and Fremont Investors and Fremont Partners in Delaware
state court alleging the terms of our agreement with Fremont Investors and
Fremont Partners in the recapitalization are not in the best interests of the
stockholders. The plaintiff has sought relief in the form of an injunction
prohibiting the recapitalization or, if the recapitalization is completed prior
to the resolution of this litigation, a rescission of the recapitalization and
unspecified monetary damages. The plaintiff is seeking class certification and
because the lawsuit is in its early stages, we are unable to predict its
outcome. If this lawsuit, or any other proceeding described under
"Business -- Legal Proceedings," is decided or settled adversely to us, requires
us to make cash payments or requires significant management attention, our
business could suffer.
RISKS RELATED TO JUNO AND OUR INDUSTRY
Our Business Could Suffer If We Are Unable to Develop and Introduce New
Products.
We seek to expand our product lines in market segments in which we compete
and to introduce new products in market segments in which we do not currently
compete. The marketing efforts and strategies for product extensions and new
products may be substantially different from those associated with our
historical operations. Although we continue to make significant investments in
product development, we may not be successful in adding new products to our
current product lines or in developing new products. If we are not successful in
adding new products to our current product lines or in developing new products,
our operating results could be adversely affected. See "Business -- Products."
8
<PAGE> 14
The Market in Which We Operate Is Highly Competitive, and We May Not Be Able to
Compete Effectively, Especially Against Established Competitors with
Significantly Greater Financial Resources.
The lighting industry in which we operate is highly competitive. We compete
primarily on the basis of product quality, design, customer service,
distribution strength, brand awareness and price. Competitors range from large
global diversified companies to foreign manufacturers. A number of competitors,
including our two largest competitors, are divisions or subsidiaries of larger
companies which have substantially greater resources than us. Competition could
prevent the institution of price increases or could require price reductions or
increased spending on product development and marketing and sales which could
adversely effect our results of operations. See "Business -- Competition."
We Rely on Third Party Manufacturers to Supply Our Key Components.
A majority of the components utilized in our products are supplied by third
party manufacturers. While we have generally been able to obtain adequate
supplies of components from existing sources, in the future our suppliers may
not be able to meet our demand for components in a timely and cost-effective
manner. Although we believe alternative suppliers exist, our business, operating
results, financial condition or customer relationships could be adversely
affected by either an increase in prices for, or an interruption or reduction in
supply of, key components.
Our Business Could Suffer in the Event of a Work Stoppage by Our Unionized Labor
Force.
At May 31, 1999, all of our production employees, who constitute
approximately 56% of our employees, were covered by one of two collective
bargaining agreements. The collective bargaining agreements pertaining to our
Des Plaines, Illinois and Fishers, Indiana locations expire in September 1999
and September 2001, respectively. We believe that we have satisfactory relations
with our unions and, therefore, anticipate reaching new agreements on
satisfactory terms as existing agreements expire. However, new agreements may
not be reached without a work stoppage or strike or reached on terms
satisfactory to us. A prolonged work stoppage or strike could have a material
adverse effect on our results of operations. See "Business -- Employees."
We Depend on Key Personnel.
We are dependent to a significant extent upon the efforts and abilities of
our senior management personnel. The loss of services of one or more of our
senior management personnel could harm our business. We have entered into change
of control benefit agreements with certain of our executive officers, the terms
of which are set forth under "Certain Relationships and Related Party
Transactions -- Change of Control Benefits Arrangements." In addition, we do not
carry key-man life insurance on any of our executive officers.
Our Failure to Make or Integrate Acquisitions Effectively Could Impair Our
Business.
As part of our business strategy, we intend to pursue strategic
acquisitions. We cannot assure you that we will succeed in consummating any such
acquisitions. If any such acquisitions are consummated, we cannot assure you
that such acquisitions will be successfully integrated or operated profitably.
Acquisitions can present significant challenges to management due to the
increased time and resources required to properly integrate management,
employees, accounting controls, personnel and administrative functions. We
cannot assure you that we will not encounter such difficulties or that we will
be able to realize the benefits that we hope to achieve from future strategic
acquisitions.
We May Be Adversely Impacted by the Year 2000 Issue.
We have been assessing our "Year 2000" readiness and exposure to Year 2000
issues. Partly in connection with such assessment, we initiated a program to
upgrade our systems hardware and software.
9
<PAGE> 15
Our assessment has been focused on information technology systems and has also
included a review of non-information technology systems, principally embedded
building and facility systems. We entered into an agreement to acquire new
enterprise system software and certain related consulting services. The vendor
has advised us that the system is Year 2000 compliant. We implemented and tested
a portion of the new system in the fourth calendar quarter of 1998 and expect
the new system to be fully implemented and operational in our U.S. facilities
and in our Canadian facility in the third calendar quarter of 1999. We have also
solicited confirmation from our principal suppliers that they are Year 2000
compliant.
We believe that the principal cost of addressing our Year 2000 issues are
costs associated with implementing our new enterprise system. Through May 31,
1999 we incurred costs of approximately $4,300,000 with respect to such system
and estimate that we will incur approximately an additional $625,000 in costs
with respect to such system. However, the ultimate costs that we may incur with
respect to such system or Year 2000 matters may be significantly greater.
The failure of one or more of our systems to be Year 2000 compliant or of
our vendors or customers to be Year 2000 compliant could (1) prevent us from
engaging in our normal business operations for a time period, (2) cause us to
resort to alternate or manual processes and incur material additional expenses
to correct or replace deficient systems and (3) have a material effect on our
results of operations, liquidity and financial condition, although the ultimate
impact of such events is uncertain. Based on our assessment of our principal
information technology systems, including the advice of our enterprise system
vendor, we believe that our material systems will be Year 2000 compliant.
However, the impact of the failure of such systems to be compliant is uncertain
and we are unable to determine our most reasonably likely worst case scenario.
We have not undertaken and do not anticipate undertaking further analysis of the
uncertainty or development of a plan to address this uncertainty or the
potential that we or our vendors or customers fail to be Year 2000 compliant.
10
<PAGE> 16
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. The net proceeds
to us from the sale of the old notes were approximately $120.4 million, after
deducting underwriting discounts and commissions and other expenses of the
offering of old notes payable by us. We used all of the net proceeds to finance
the recapitalization.
11
<PAGE> 17
CAPITALIZATION
The following table sets forth as of May 31, 1999 (1) the unaudited
consolidated cash and cash equivalents and capitalization of Juno and (2) the
consolidated cash and the cash equivalents and capitalization of Juno on a pro
forma basis giving effect to the recapitalization.
<TABLE>
<CAPTION>
MAY 31, 1999
---------------------
ACTUAL PRO FORMA
-------- ---------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents................................... $102,717 $ 1,000
======== ========
Long-term debt, including current maturities:
Senior credit facilities:
Revolving credit facility(1).............................. $ -- $ 7,260
Term loan A............................................... -- 40,000
Term loan B............................................... -- 50,000
Industrial development revenue bond......................... 3,325 --
-------- --------
Total senior debt................................. 3,325 97,260
Notes offered hereby........................................ -- 124,103
-------- --------
Total subordinated debt........................... -- 124,103
-------- --------
Total long-term debt............................ 3,325 221,363
Stockholders' equity (deficit)
Series A convertible preferred stock...................... -- 106,000
Common stock.............................................. 186 24
Paid-in capital........................................... 5,864 756
Accumulated other comprehensive income.................... (402) (537)
Retained earnings (deficit)............................... 194,769 (215,834)
-------- --------
Total stockholders' equity (deficit).............. 200,417 (109,591)
-------- --------
Total capitalization............................ $203,742 $111,772
======== ========
</TABLE>
- -------------------------
(1) The revolving credit facility is a six-year facility with maximum borrowing
availability (including letters of credit) of $35.0 million for working
capital and general corporate purposes. See "Description of Senior Credit
Facilities."
12
<PAGE> 18
SELECTED CONSOLIDATED FINANCIAL DATA
The following tables present selected consolidated financial data of Juno
for each of the fiscal years in the five-year period ended November 30, 1998 and
the six-month periods ended May 31, 1998 and 1999. The historical financial data
for the fiscal years ended November 30, 1996, 1997 and 1998 and the balance
sheets as of November 30, 1997 and 1998 are derived from, and should be read in
conjunction with, the audited financial statements and the unaudited quarterly
financial statements of Juno and the notes related thereto appearing elsewhere
in this prospectus. The historical financial data for the fiscal years ended
November 30, 1994 and 1995 and the balance sheets as of November 30, 1994, 1995
and 1996 are derived from audited financial statements of Juno not included in
this prospectus. The consolidated financial data of Juno for each of the
six-month periods ended May 31, 1998 and 1999 and the balance sheets as of May
31, 1998 and 1999 are derived from, and should be read in conjunction with,
Juno's unaudited consolidated financial statements and the related notes thereto
appearing elsewhere in this prospectus which, in the opinion of our management,
contain all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of this data. The results for the six-month
period ended May 31, 1999 are not necessarily indicative of the results for the
full year or for any future period.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED NOVEMBER 30, MAY 31,
-------------------------------------------------------------- -----------------------
1994 1995 1996 1997 1998 1998 1999
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales...................... $ 126,777 $ 126,364 $ 131,479 $ 139,855 $ 160,941 $ 75,232 $ 82,781
Cost of sales.................. 61,228 65,085 68,319 71,881 79,882 37,961 42,032
---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross profit................. 65,549 61,279 63,160 67,974 81,059 37,271 40,749
Selling, general and
administrative............... 31,895 33,634 36,766 40,601 44,083 21,341 22,672
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income............. 33,654 27,645 26,394 27,373 36,976 15,930 18,077
Other income................... 2,712 3,269 3,718 4,020 4,281 2,071 2,395
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before taxes on
income..................... 36,366 30,914 30,112 31,393 41,257 18,001 20,472
Taxes on income................ 13,459 10,940 10,215 11,090 14,632 6,414 7,157
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income................... $ 22,907 $ 19,974 $ 19,897 $ 20,303 $ 26,625 $ 11,587 $ 13,315
========== ========== ========== ========== ========== ========== ==========
PER SHARE DATA:
Net income
Basic........................ $ 1.24 $ 1.08 $ 1.08 $ 1.10 $ 1.43 $ .62 $ .72
Diluted...................... 1.23 1.08 1.08 1.10 1.43 .62 .71
Shares used in per share
calculation
Basic........................ 18,423,120 18,483,220 18,451,366 18,522,270 18,576,015 18,562,199 18,599,184
Diluted...................... 18,549,662 18,563,341 18,494,548 18,540,835 18,614,863 18,594,120 18,654,308
OTHER FINANCIAL DATA:
EBITDA(1)...................... $ 36,865 $ 30,430 $ 29,468 $ 30,857 $ 40,654 $ 17,772 $ 20,153
Depreciation and
amortization................. 3,211 2,785 3,074 3,484 3,678 1,842 2,076
Capital expenditures........... 4,416 3,708 13,316 13,226 5,293 2,536 3,133
Gross margin................... 51.7% 48.5% 48.0% 48.6% 50.4% 49.5% 49.2%
EBITDA margin.................. 29.1% 24.1% 22.4% 22.1% 25.3% 23.6% 24.3%
Cash flows provided by (used
in)
Operating activities......... 22,902 20,166 22,162 17,200 22,567 7,351 10,567
Investing activities......... (15,439) (11,641) (19,011) (7,611) (12,637) (8,528) 10,567
Financing activities......... (4,698) (6,611) (6,197) (6,256) (6,238) (3,150) (3,400)
Ratio of earnings to fixed
charges(2)................... 63.8x 50.3x 49.9x 61.6x 91.2x 88.4x 92.5x
Pro forma ratio of earnings to
fixed charges(3)............. 1.5x 1.5x
Pro forma ratio of earnings to
combined fixed charges and
preferred dividend(4)........ 1.0x 0.9x
</TABLE>
13
<PAGE> 19
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED NOVEMBER 30, MAY 31,
-------------------------------------------------------------- -----------------------
1994 1995 1996 1997 1998 1998 1999
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and marketable
securities................... $ 68,307 $ 79,181 $ 81,815 $ 83,945 $ 100,383 $ 90,754 $ 102,717
Working capital................ 89,451 102,294 104,465 110,876 133,409 122,909 152,546
Total assets................... 145,756 160,089 178,181 187,389 208,839 196,795 217,599
Total debt..................... 6,857 6,434 5,976 3,500 3,385 3,443 3,325
Stockholders' equity........... 126,748 141,368 155,661 170,630 191,448 179,399 200,417
</TABLE>
- -------------------------
(1) EBITDA is defined as operating income before depreciation and amortization.
EBITDA is presented because it is a widely accepted financial indicator used
by certain investors and analysts to analyze and compare companies on the
basis of operating performance. EBITDA is not intended to represent cash
flows for the period, is not presented as an alternative to operating income
as an indicator of operating performance, should not be considered in
isolation or as a substitute for measures of performance prepared in
accordance with GAAP and is not indicative of operating income or cash flow
from operations as determined under GAAP.
(2) In calculating the ratio of earnings to fixed charges, earnings consist of
income before income taxes plus fixed charges. Fixed charges consist of
interest expense (which includes amortization of deferred financing costs
and debt issuance costs) and one-third of rental expense, deemed
representative of that portion of rental expense estimated to be
attributable to interest.
(3) In calculating the pro forma ratio of earnings to fixed charges, earnings
consist of income before taxes plus fixed charges. Fixed charges consist of
interest expense, (which includes amortization of deferred financing costs
and debt issuance costs) and one-third of rental expense, deemed
representative of that portion of rental expense, estimated to be
attributable to interest.
(4) In calculating the pro forma ratio of earnings to combined fixed charges and
preferred stock dividend, earnings consist of income before taxes plus fixed
charges. Fixed charges consist of interest expense (which includes
amortization of deferred financing costs and debt issuance costs) and
one-third of rental expense, deemed representative of that portion of rental
expense, estimated to be attributable to interest, and non-cash dividends
payable on our series A convertible preferred stock issued to Fremont
Investors or its assigns in the recapitalization.
14
<PAGE> 20
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES
Subject to the terms and conditions set forth in this prospectus and in the
accompanying letter of transmittal, we will accept for exchange old notes that
are properly tendered on or before the Expiration Date and not withdrawn as
permitted below. As used in this prospectus, the term "Expiration Date" means
5:00 p.m., New York City time, on , 1999, or such later date and time
to which we, in our sole discretion, extend the exchange offer.
The form and terms of the new notes being issued in the exchange offer are
the same as the form and terms of the old notes except that:
- the notes being issued in the exchange offer will have been registered
under the Securities Act and thus will not bear restrictive legends
restricting their transfer pursuant to the Securities Act, and
- the notes being issued in the exchange offer will not contain the
registration rights contained in the old notes.
As of the date of this prospectus, there is $125.0 million in total
principal amount of notes outstanding. This prospectus and the letter of
transmittal are first being sent on or about September , 1999, to all holders
of old notes known to us. Our obligation to accept old notes for exchange
pursuant to the exchange offer is subject to the conditions set forth below
under "-- Conditions to the Exchange Offer."
Notes tendered in the exchange offer must be in denominations of principal
amount of $1,000 and any integral multiple thereof.
We expressly reserve the right, at any time or from time to time, to extend
the period of time during which the Exchange Offer is open, and thereby delay
acceptance for exchange of any old notes, by giving oral or written notice of
such extension to the holders of old notes as described below. During any such
extension, all old notes previously tendered will remain subject to the exchange
offer and may be accepted for exchange by us. We will return at no expense to
the holder, any old notes not accepted for exchange as promptly as practicable
after the expiration or termination of the exchange offer.
If any of the events specified in "-- Conditions to the Exchange Offer"
should occur, we may amend or terminate the exchange offer, and not accept for
exchange any old notes not previously accepted for exchange. We will give oral
or written notice of any extension, amendment, non-acceptance or termination to
holders of old notes as promptly as practicable. In the case of an extension, we
will issue a press release or other public announcement no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date.
Following consummation of the exchange offer, we may commence one or more
additional exchange offers to those holders of old notes who did not exchange
their old notes for new notes on terms which may differ from those contained in
the registration rights agreement. We may use this prospectus, as amended or
supplemented from time to time, in connection with additional exchange offers.
Such additional exchange offers will take place from time to time until all
outstanding old notes have been exchanged for new notes.
PROCEDURES FOR TENDERING OLD NOTES
The tendering by a holder of old notes, and our mutual acceptance of the
old notes, will constitute a binding agreement between us and the holder on the
terms and subject to the conditions set forth in this prospectus and in the
accompanying letter of transmittal. Except as set forth below, to tender in the
15
<PAGE> 21
exchange offer, a holder must transmit to Firstar Bank of Minnesota, N.A., the
exchange agent, at the address set forth under "-- Exchange Agent" on or before
the Expiration Date either:
- a properly completed and duly executed letter of transmittal, including
all other documents required by such letter of transmittal, or
- if the old notes are tendered pursuant to the book-entry procedures set
forth below, an agent's message instead of a letter of transmittal.
In addition, on or prior to the Expiration Date, either:
- the exchange agent must receive the certificates for the old notes along
with the letter of transmittal; or
- the exchange agent must receive a timely confirmation of a book-entry
transfer of such old notes into the exchange agent's account at The
Depository Trust Company ("DTC") according to the procedure for
book-entry transfer described below, along with a letter of transmittal
or an agent's message instead of a letter of transmittal; or
- the holder must comply with the guaranteed delivery procedures described
below.
The term "agent's message" means a message, transmitted by DTC and received by
the exchange agent and forming a part of the book-entry confirmation, which
states that DTC has received an express acknowledgment from the tendering holder
that such holder has received and agrees to be bound by the letter of
transmittal and that we may enforce the letter of transmittal against the
holder.
THE METHOD OF DELIVERY OF OLD NOTES, LETTERS OF TRANSMITTAL OR AGENT'S
MESSAGES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE
HOLDERS. IF DELIVERY IS BY MAIL, WE RECOMMEND REGISTERED MAIL, PROPERLY INSURED,
WITH RETURN RECEIPT REQUESTED. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO
GUARANTEE TIMELY DELIVERY. DO NOT SEND LETTERS OF TRANSMITTAL, AGENT'S MESSAGES
OR OLD NOTES TO US.
Signature requirements
Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the notes surrendered for exchange are
tendered:
- by a registered holder of old notes who has not completed the box
entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the letter of transmittal, or
- for the account of an eligible institution.
An "eligible institution" is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office or correspondent in the
United States.
If signatures on a letter of transmittal or a notice of withdrawal are
required to be guaranteed, the guarantor must be by an eligible institution. If
old notes are registered in the name of a person other than a signer of the
letter of transmittal, the old notes surrendered for exchange must be endorsed
by, or be accompanied by a written instrument or instruments of transfer or
exchange, in satisfactory form as determined by us in our sole discretion, duly
executed by the registered holder with the holder's signature guaranteed by an
eligible institution.
If a person or persons other than the registered holder or holders of old
notes signs the letter of transmittal, such old notes must be endorsed or
accompanied by appropriate powers of attorney, in either case signed exactly as
the name or names of the registered holder or holders that appear on the old
notes.
If trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity sign the letter of transmittal or any old notes or powers of attorney,
those persons should so indicate when signing, and must submit proper evidence
satisfactory to us of their authority to sign unless we waive this requirement.
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<PAGE> 22
Our interpretations are binding on you
We will determine all questions as to the validity, form, eligibility,
including time of receipt, and acceptance of old notes tendered for exchange in
our sole discretion. Our determination will be final and binding. We reserve the
absolute right to:
- reject any and all tenders of any old note not properly tendered,
- refuse acceptance of any old note if, in our judgment or the judgment of
our counsel, acceptance of the old note might be unlawful, and
- waive any defects or irregularities or conditions of the exchange offer
as to any old note either before or after the Expiration Date. This
includes the right to waive the ineligibility of any holder who seeks to
tender old notes in the exchange offer.
Our interpretation of the terms and conditions of the exchange offer as to
any particular old notes either before or after the Expiration Date, including
the letter of transmittal and the instructions to it, will be final and binding
on all parties. Holders must cure any defects or irregularities in connection
with tenders of old notes for exchange within such reasonable period of time as
we will determine, unless we waive such defects or irregularities. Neither we,
the exchange agent, nor any other person shall have duty to notify anyone of any
defect or irregularity regarding any tender of old notes for exchange, nor shall
any of us incur any liability for failing to notify any person.
Representations you make by tendering
By tendering your old notes, you represent to us that, among other things,
- you are not our "affiliate," as defined in Rule 144 under the Securities
Act,
- you are acquiring the new notes you receive in the exchange offer in the
ordinary course of your business,
- neither you nor anyone receiving new notes from me has any arrangement or
understanding with any person to participate in a distribution, in
violation of the Securities Act, of the new notes issued in the exchange
offer,
- if you are not a broker-dealer, that you are not engaged in, and do not
intend to engage in, a distribution of new notes, and
- if you are a broker-dealer that receives new notes for your own account
in exchange for old notes that you acquired as a result of market-making
or other trading activities (other than old notes you acquired directly
from us or any of our affiliates), you will receive the new notes for
your own account in exchange for such old notes, and you will deliver a
prospectus meeting the requirements of the Securities Act in connection
with any resale of the new notes you receive in the exchange offer.
The letter of transmittal states that by so representing and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" under the Securities Act. See "Plan of Distribution."
If you are using the exchange offer to participate in a distribution of the
new notes, by tendering your old notes you will represent and agree that, if the
resales are of new notes obtained by you in exchange for old notes acquired by
you in the exchange offer directly from us or our affiliates, you may not rely
on the position of the Commission stated in its letters to Morgan Stanley & Co.,
Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available
May 13, 1998), as interpreted in the Commission's letter to Shearman & Sterling
(available July 2, 1993) and similar no-action letters, and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any secondary resale transaction and that such a secondary
resale transaction must be covered by an effective
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<PAGE> 23
registration statement containing the selling security holder information
required by Item 507 or 508, as applicable, of Regulation S-K under the
Securities Act.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon satisfaction or waiver of all of the conditions to the exchange offer,
we will accept, promptly after the Expiration Date, all old notes properly
tendered and will issue the new notes promptly after acceptance of the old
notes. See "-- Conditions to the Exchange Offer." For purposes of the exchange
offer, we will be deemed to have accepted properly tendered old notes for
exchange when, as and if we have given oral or written notice to the exchange
agent, with written confirmation of any oral notice to be given promptly
thereafter.
For each old note accepted for exchange, the old note holder will receive a
new note having a principal amount of maturity equal to that of the surrendered
note. Interest on the new notes will accrue from June 30, 1999, the original
issue date of the old notes. If the exchange offer is not consummated by
November 27, 1999, the interest rate on the old notes, from and including such
date until but excluding the date of consummation of the exchange offer, will
increase by 0.5% per annum during each subsequent 90-day period up to a maximum
overall increase of 2.0% per annum. We will pay such interest, if any, on old
notes in exchange for which new notes were issued to the persons who, at the
close of business on June 15 or December 15 immediately preceding the interest
payment date, are registered holders of such old notes if such record date
occurs prior to such exchange, or are registered holders of the new notes if
such record date occurs on or after the date of such exchange, even if notes are
cancelled after the record date and on or before the interest payment date.
In all cases, we will issue new notes in the exchange offer for old notes
that are accepted for exchange only after the exchange agent timely receives
either:
- certificates for such old notes or a timely book-entry confirmation of
such old notes into the exchange agent's account at DTC, and
- a properly completed and duly executed letter of transmittal or, in the
case of a book-entry confirmation, an agent's message, and all other
required documents.
If tendered old notes are not accepted for any reason set forth in the
terms and conditions of the exchange offer or if a holder submits old notes for
a greater principal amount than the holder desired to exchange, we will return
such unaccepted or non-exchanged old notes without expense to the tendering
holder as promptly as practicable after the expiration or termination of the
exchange offer. In the case of old notes tendered by book-entry transfer into
the exchange agent's account at DTC, such unaccepted or non-exchanged old notes
will be credited to an account maintained with DTC as promptly as practicable
after the expiration or termination of the exchange offer.
BOOK-ENTRY TRANSFER
The exchange agent will request to establish an account for the old notes
at DTC for the exchange offer within two business days after the date of this
prospectus. Any financial institution that is a participant in DTC's systems may
make book-entry delivery of old notes by causing DTC to transfer such old notes
into the exchange agent's account at DTC in accordance with DTC's procedures for
transfer. However, although delivery of old notes may be effected through
book-entry transfer at DTC, the letter of transmittal or facsimile thereof, with
any required signature guarantees, or an agent's message in lieu of such letter
of transmittal, and any other required documents, must, in any case, be
transmitted to and received by the exchange agent at one of the addresses set
forth below under "-- Exchange Agent" on or prior to the Expiration Date or the
guaranteed delivery procedures described below must be complied with.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of the old notes desires to tender such old notes
and the old notes are not immediately available, or time will not permit such
holder's old notes or other required documents to
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<PAGE> 24
reach the exchange agent before the Expiration Date, or the procedure for
book-entry transfer cannot be completed on a timely basis, a tender may be
effected if:
- the tender is made through an eligible institution;
- before the Expiration Date, the exchange agent receives from such
eligible institution a properly completed and duly executed letter of
transmittal, or a facsimile thereof, and notice of guaranteed delivery,
substantially in the form provided by us, by telegram, telex, facsimile
transmission, mail or hand delivery, setting forth the name and address
of the holder of old notes and the amount of old notes tendered, stating
that the tender is being made thereby and guaranteeing that within three
New York Stock Exchange trading days after the date of execution of the
notice of guaranteed delivery, the certificates for all physically
tendered old notes, in proper form for transfer, or a book-entry
confirmation, as the case may be, and any other documents required by the
letter of transmittal will be deposited by the eligible institution with
the exchange agent; and
- the exchange agent receives the certificates for all physically tendered
old notes, in proper form for transfer, or a book-entry confirmation, as
the case may be, and all other documents required by the letter of
transmittal, within three NYSE trading days after the date of execution
of the notice of guaranteed delivery.
WITHDRAWAL RIGHTS
You may withdraw tenders of old notes at any time before the Expiration
Date.
For a withdrawal to be effective, you must send a written notice of
withdrawal to the exchange agent at one of the addresses set forth below under
"-- Exchange Agent." Any such notice of withdrawal must:
- specify the name of the person having tendered the old notes to be
withdrawn,
- identify the old notes to be withdrawn, including the principal amount of
such old notes and
- if you have transmitted certificates for old notes, specify the name in
which such old notes are registered, if different from that of the
withdrawing holder.
If certificates for old notes have been delivered or otherwise identified
to the exchange agent, then, before the release of such certificates, the
withdrawing holder must also submit the serial numbers of the particular
certificates to be withdrawn and a signed notice of withdrawal with signatures
guaranteed by an eligible institution unless such holder is an eligible
institution.
If old notes have been tendered pursuant to the procedure for book-entry
transfer described above, any notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawn old notes and
otherwise comply with the procedures of such facility.
We will determine all questions as to the validity, form and eligibility,
including time of receipt, of such notices. Our determination will be final and
binding on all parties.
Any old notes so withdrawn will be deemed not to have been validly tendered
for exchange for purposes of the exchange offer. Any old notes which have been
tendered for exchange but which are not exchanged for any reason will be
returned to the holder without cost to such holder. In the case of old notes
tendered by book-entry transfer into the exchange agent's account at DTC
pursuant to the book-entry transfer procedures described above, any withdrawn or
unaccepted old notes will be credited to the tendering holder's account
maintained with DTC for the old notes. Any return or credit will occur as soon
as practicable after withdrawal, rejection of tender or termination of the
exchange offer. Properly withdrawn old notes may be retendered by following one
of the procedures described under "-- Procedures for Tendering Old Notes" above
at any time on or before the Expiration Date.
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<PAGE> 25
CONDITIONS TO THE EXCHANGE OFFER
We are not required to accept for exchange, or to issue new notes in
exchange for, any old notes. We may terminate or amend the exchange offer if, at
any time before the acceptance of such old notes for exchange or the exchange of
the new notes for such old notes, we determine in our sole and absolute
discretion, that the exchange offer violates applicable law or any applicable
interpretation of the staff of the Commission.
EXCHANGE AGENT
Firstar Bank, N.A., has been appointed as the exchange agent for the
exchange offer. All completed letters of transmittal and agent's messages should
be directed to the exchange agent at one of the addresses set forth below.
Questions and requests for assistance, requests for additional copies of this
prospectus or of the letter of transmittal and requests for notices of
guaranteed delivery should be directed to the exchange agent addressed as
follows:
Delivery to: Firstar Bank, N.A., Exchange Agent
<TABLE>
<CAPTION>
By Hand/Overnight Delivery: By Registered or Certified Mail:
<S> <C>
Firstar Bank, N.A. Firstar Bank, N.A.
101 E. Fifth Street 101 E. Fifth Street
St. Paul, Minnesota 55101 St. Paul, Minnesota 55101
Attention: Frank Leslie Attention: Frank Leslie
</TABLE>
(eligible guarantor institutions only)
By Facsimile: 651-229-6415
Confirm by Telephone: 651-229-2600
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE IS NOT VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
FEES AND EXPENSES
We will not pay any brokers, dealers or others soliciting acceptances of
the exchange offer.
We will pay the estimated cash expenses to be incurred in connection with
the exchange offer, which are estimated to total $200,000.
TRANSFER TAXES
Holders who tender their old notes for exchange will not be obligated to
pay any transfer taxes in connection with the exchange. However, holders who
instruct us to register new notes in the name of, or request that old notes not
tendered or not accepted in the exchange offer be returned to, a person other
than the registered tendering holder will be responsible for the paying of any
applicable transfer tax.
HOLDERS, OTHER THAN AFFILIATES, MAY OFFER OR SELL THE NEW NOTES
Based on interpretations by the Commission staff, as set forth in no-action
letters issued to third parties, we believe that new notes issued in the
exchange offer for old notes may be offered for resale, resold or otherwise
transferred by the holders of such new notes, other than any such holder that is
an "affiliate" of Juno within the meaning of Rule 405 under the Securities Act.
Such new notes may be offered for resale, resold or otherwise transferred
without compliance with the registration and prospectus delivery requirements of
the Securities Act, if:
- such new notes issued in the exchange offer are acquired in the ordinary
course of such holder's business, and
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<PAGE> 26
- such holders have no arrangement or understanding with any person to
participate in the distribution of such new notes issued in the exchange
offer.
Each holder, other than a broker-dealer, must acknowledge that it is not
engaged in, and does not intend to engage in, a distribution of new notes and
has no arrangement or understanding to participate in a distribution of new
notes.
However, we do not intend to request the Commission to consider, and the
Commission has not considered, the exchange offer in the context of a no-action
letter. We cannot guarantee that the Commission staff would make a similar
determination with respect to the exchange offer as in other circumstances.
If any holder is an "affiliate" of ours, as defined in Rule 405 under the
Securities Act of 1933, is engaged in or intends to engage in or has any
arrangement or understanding with respect to the distribution of the new notes
to be acquired pursuant to the exchange offer such holder:
- could not rely on the applicable interpretations of the Commission staff,
and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction.
Each broker-dealer that receives new notes for its own account in exchange
for old notes, where such old notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of such new
notes. See "Plan of Distribution."
In addition, to comply with state securities laws, the new notes may not be
offered or sold in any state unless they have been registered or qualified for
sale in such state or an exemption from registration or qualification is
available and is complied with. The offer and sale of the new notes to
"qualified institutional buyers," as that term is defined under Rule 144A of the
Securities Act, is generally exempt from registration or qualification under the
state securities laws. We currently do not intend to register or qualify the
sale of the new notes in any state where an exemption from registration or
qualification is required and not available.
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<PAGE> 27
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
OVERVIEW
We are a leading designer, assembler and marketer of recessed and track
lighting fixtures. Our broad product line is used in commercial and residential
remodeling and new construction. Our principal products use a variety of light
sources and are designed for reliable and flexible function, efficient
operation, attractive appearance and simple installation and servicing. The
following discussion should be read in conjunction with our consolidated
financial statements and notes thereto included elsewhere in this prospectus.
RESULTS OF OPERATIONS
The following table sets forth the percentage relationship of certain items
to net sales for Juno for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED NOVEMBER 30, MAY 31,
------------------------ -------------
1996 1997 1998 1998 1999
------ ------ ------ ----- -----
<S> <C> <C> <C> <C> <C>
Net sales.............................................. 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales.......................................... 52.0 51.4 49.6 50.5 50.8
----- ----- ----- ----- -----
Gross profit......................................... 48.0 48.6 50.4 49.5 49.2
----- ----- ----- ----- -----
Selling, general and administrative expenses........... 28.0 29.0 27.4 28.4 27.4
----- ----- ----- ----- -----
Operating income..................................... 20.1% 19.6% 23.0% 21.2% 21.8%
===== ===== ===== ===== =====
</TABLE>
FIRST SIX MONTHS OF FISCAL 1999 COMPARED TO FIRST SIX MONTHS OF FISCAL 1998
During the six-month period ended May 31, 1999, net sales increased 10.0%
to $82,781,000 compared to $75,232,000 for the like period in 1998. In the
opinion of management, sales increases were due primarily to market share gains
and increases in demand from improved economic conditions.
Cost of sales as a percentage of net sales increased slightly to 50.8%
compared to 50.5% for the like period in 1998. This increase is due primarily to
changes in sales mix for Juno's Canadian and Indy Lighting subsidiaries.
Selling, general and administrative expenses as a percentage of sales
decreased to 27.4% as compared to 28.4% in 1998 due to economies of scale
associated with the increase in sales.
FISCAL 1998 COMPARED TO FISCAL 1997
For the fiscal year ended November 30, 1998, net sales increased
approximately $21,086,000 or 15.1% to $160,941,000 from $139,855,000 for the
like period in 1997. This increase is due primarily to an overall increase in
demand from improving economic conditions and is represented by growth across
substantially all product lines and markets. Sales through our Canadian
subsidiary increased 8.4% to $9,290,000 for the year ended November 30, 1998
compared to $8,571,000 for the like period in 1997.
Gross profit expressed as a percentage of sales increased to 50.4% in
fiscal 1998 compared to 48.6% in fiscal 1997 due to increased productivity,
stable raw material costs and benefits from the redesign and retooling of high
volume parts.
Selling, general and administrative expenses as a percentage of sales
decreased to 27.4% in fiscal 1998 compared to 29.0% in fiscal 1997 due primarily
to economies of scale associated with the sales increase. In addition, we
incurred one-time charges in fiscal 1997 of approximately $700,000 to repair a
defective component in certain exit and emergency lighting fixtures. The
fixtures from this product line required the
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<PAGE> 28
replacement of an electric component that was supplied by a vendor. We also
incurred a one-time charge of approximately $300,000 for our move to our new
factory and corporate office facilities in 1997.
The effective income tax rate for fiscal 1998 increased slightly to 35.5%
compared to 35.3% for fiscal 1997. Since our investment portfolio consists
largely of municipal bonds, the interest earned is substantially tax exempt.
Therefore, in periods when operating earnings increase compared to prior years,
the relationship of tax-exempt income to total income decreases thus producing a
higher effective income tax rate.
FISCAL 1997 COMPARED TO FISCAL 1996
For the fiscal year ended November 30, 1997, net sales increased
approximately $8,376,000 or 6.4% to $139,855,000 in fiscal 1997 compared to
$131,479,000 in fiscal 1996. This increase is due primarily to sales of new
products introduced in 1996. Sales through our Canadian subsidiary increased
11.2% to $8,571,000 for the year ended November 30, 1997 compared to $7,711,000
for the like period in 1996.
Gross profit expressed as a percentage of sales increased slightly to 48.6%
in fiscal 1997 compared to 48.0% in fiscal 1996 due primarily to reductions in
raw material costs and improvements in manufacturing productivity.
Selling, general and administrative expenses as a percentage of sales
increased to 29.0% in fiscal 1997 compared to 28.0% in fiscal 1996 due, in part,
to costs associated with the move to our new factory and corporate office
facilities in the fourth quarter of 1997. In addition, we incurred one-time
charges in fiscal 1997 of approximately $700,000 to repair a defective component
in certain exit and emergency lighting fixtures.
The effective income tax rate for fiscal 1997 increased to 35.3% compared
to 33.9% for fiscal 1996. Since our investment portfolio consists largely of
municipal bonds, the interest earned is substantially tax exempt. Therefore, in
periods when operating earnings increase compared to prior years, the
relationship of tax-exempt income to total income decreases thus producing a
higher effective income tax rate.
INFLATION
While Juno believes that it generally has been successful in controlling
the prices it pays for materials and passing on increased costs by increasing
its prices, we may not have future success in limiting material price increases
or reflecting any material price increases in the prices we charge our customers
or offsetting such price increases through improved efficiencies.
FINANCIAL CONDITION
During the six-month period ended May 31, 1999, we generated positive net
cash flow from operating activities of $10,567,000. This was comprised
principally of net income, depreciation and amortization and a decrease in
prepaid expenses (aggregating $16,688,000), net of increases in accounts
receivable of $3,819,000, inventory of $1,203,000 and other assets of $950,000.
We used the net cash provided from operating activities to finance capital
expenditures of $3,133,000 and pay dividends of $3,720,000.
FISCAL 1998. We generated positive cash flow from operating activities of
$22,567,000 comprised principally of net income, depreciation and amortization
and an increase in accounts payable (collectively aggregating $31,165,000), net
of an increase in accounts receivable ($2,601,000) and an increase in inventory
($5,408,000). Accounts receivable increased 9.1% in support of the higher sales
level compared to 1997. In order to maintain our commitment to prompt delivery
of product to our customers and to restore inventory to appropriate levels
following the move of our principal corporate office and assembly facility,
inventory increased by 23.8% compared to 1997 levels. Miscellaneous other assets
decreased to $607,000 from $4,456,000 due to the sale of the building that
formerly served as our principal corporate office and production facility.
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<PAGE> 29
We used the net cash provided from operating activities to increase our
investment portfolio by $11,949,000, finance capital expenditures of $5,293,000,
and pay dividends of $6,686,000, which reflected a quarterly dividend rate of
$.09 per share.
On October 27, 1998 we announced the declaration of a cash dividend of $.10
per share payable January 15, 1999 to stockholders of record December 15, 1998.
This represents an 11% increase from the previous quarterly rate of $.09 per
share.
We generated additional positive cash flow of $4,605,000 from the sale of
the building that formerly served as our principal corporate office and
production facility. This building was previously classified in miscellaneous
other assets.
FISCAL 1997. We generated positive cash flow from operating activities of
$17,200,000 comprised principally of net income, depreciation and amortization,
and a decrease in inventory in preparation of the move of our principal
corporate office and production facility (collectively aggregating $24,355,000),
net of a decrease in accrued liabilities ($3,773,000) and an increase in
accounts receivable ($1,359,000). Miscellaneous other assets increased to
$4,456,000 from $67,000 due to the reclassification of our remaining unsold
building to other assets in recognition of its status as a non-productive asset.
We used the net cash provided from operating activities to finance capital
expenditures of $13,226,000, primarily for our new corporate office and
production facility, make principal payments on long-term debt of $1,048,000 and
pay dividends of $5,925,000, which reflected a quarterly dividend rate of $.08
per share.
On October 22, 1997 we announced the declaration of a cash dividend of $.09
per share payable January 15, 1998 to stockholders of record December 15, 1997.
This represents a 13% increase from the previous quarterly rate of $.08 per
share.
We completed our new corporate office and production facility in Des
Plaines, Illinois. Final occupancy took place on October 12, 1997. The cost of
the project, including furniture and equipment, amounted to $22,470,000 and was
financed out of existing corporate funds.
We generated additional positive cash flow of $4,322,000 from the sale of
two of our three buildings, all of which were vacant due to the move to the new
corporate office and production facility. We used these proceeds to retire an
Industrial Development Revenue Bond of approximately $950,000.
FISCAL 1996. We generated positive cash flow from operating activities of
$22,162,000 comprised principally of net income, depreciation and amortization,
and an increase in accrued liabilities (collectively aggregating $27,365,000),
net of increases in inventory ($3,692,000) and accounts receivable ($1,965,000).
In order to maintain our commitment to prompt delivery of product to our
customers and to support our planned move to our new facility in 1997, inventory
increased by 18.9% compared to 1995 levels. Accounts receivable increased 11.7%
which approximates the increase in the sales volume for the fourth quarter of
1996 compared to 1995. Net property and equipment increased 32.2% and accrued
liabilities increased 70.9% due primarily to the construction of the new
facility.
We used the net cash provided from operating activities to finance capital
expenditures of $13,316,000, increase our investment portfolio by $5,695,000,
and pay dividends of $5,903,000, which reflected a quarterly dividend rate of
$.08 per share.
LIQUIDITY AND CAPITAL RESOURCES
We historically have funded our operations principally from cash generated
from operations, available cash and income from marketable securities. We will
incur substantial indebtedness in connection with the recapitalization. Our
liquidity needs are expected to arise primarily from operating activities and
servicing indebtedness incurred in connection with the recapitalization.
Principal and interest payments under the senior credit facilities and the
notes represent significant liquidity requirements for us. As of May 31, 1999,
after giving pro forma effect to the recapitalization, we
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<PAGE> 30
had cash of approximately $1,000,000 and approximately $27,740,000 available for
borrowing under our revolving credit facility and total indebtedness of
approximately $221,363,000.
Our principal source of cash to fund our liquidity needs will be net cash
from operating activities and borrowings under the senior credit facilities. We
believe these sources will be adequate to meet our anticipated future
requirements for working capital, capital expenditures, and scheduled payments
of principal and interest on our existing indebtedness for at least the next 12
months. We estimate capital expenditures for the fiscal year ending November 30,
1999 will be approximately $4,500,000. However, we may not generate sufficient
cash flow from operations or have future working capital borrowings available in
an amount sufficient to enable us to services our indebtedness, including the
notes, or to make necessary capital expenditures. See "Risk Factors -- We Will
Be Substantially Leveraged and Will Have Decreased Liquidity After the
Recapitalization, Which Could Limit Our Flexibility to Obtain Additional Capital
or Grow Our Business" and "-- Our Business Activities and Our Ability to Raise
Additional Funds Are Limited by Covenants Under the Indenture and Senior Credit
Facilities."
YEAR 2000 READINESS
We have been assessing our "Year 2000" readiness and exposure to Year 2000
issues. Partly in connection with such assessment, we initiated a program to
upgrade our systems hardware and software. Our assessment has been focused on
information technology systems and has also included a review of non-information
technology systems, principally embedded building and facility systems. We
entered into an agreement to acquire new enterprise system software and certain
related consulting services. The vendor has advised us that the system is Year
2000 compliant. We implemented and tested a portion of the new system in the
fourth calendar quarter of 1998 and expect the new system to be fully
implemented and operational in our U.S. facilities and in our Canadian facility
in the third calendar quarter of 1999. We have also solicited confirmation from
our principal suppliers that they are Year 2000 compliant.
We believe that the principal cost of addressing our Year 2000 issues are
costs associated with implementing our new enterprise system. Through May 31,
1999 we incurred costs of approximately $4,300,000 with respect to such system
and estimate that we will incur approximately an additional $625,000 in costs
with respect to such system. However, the ultimate costs that we may incur with
respect to such system or Year 2000 matters may be significantly greater.
The failure of one or more of our systems to be Year 2000 compliant or of
our vendors or customers to be Year 2000 compliant could (1) prevent us from
engaging in our normal business operations for a time period, (2) cause us to
resort to alternate or manual processes and incur material additional expenses
to correct or replace deficient systems and (3) have a material effect on our
results of operations, liquidity and financial condition, although the ultimate
impact of such events is uncertain. Based on our assessment of our principal
information technology systems, including the advice of our enterprise system
vendor, we believe that our material systems will be Year 2000 compliant.
However, the impact of the failure of such systems to be compliant is uncertain
and we are unable to determine our most reasonably likely worst case scenario.
We have not undertaken and do not anticipate undertaking further analysis of the
uncertainty or development of a plan to address this uncertainty or the
potential that we or our vendors or customers fail to be Year 2000 compliant.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1997, the FASB issued Statement No. 130, "Reporting Comprehensive
Income." SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains, and losses)
in a full set of general-purpose financial statements. This statement requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. SFAS No. 130
requires that an enterprise (a) classify items of other comprehensive income by
their nature in a financial statement and (b) display the accumulated balance of
other comprehensive income separately from retained earnings and additional
paid-in capital in the equity
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<PAGE> 31
section of a statement of financial position. The Statement is effective for
fiscal years beginning after December 15, 1997. Reclassification of financial
statements for earlier periods provided for comparative purposes is required.
The adoption of SFAS No. 130 in the first quarter of 1999 has not had a material
impact on our financial statements.
In June 1997, the FASB issued Statement No. 131, "Disclosure about Segments
of an Enterprise and Related Information." This statement, effective for
financial statements for periods beginning after December 15, 1997, requires
that a public business enterprise report financial and descriptive information
about its reportable operating segments. Generally, financial information is
required to be reported on the basis that it is used internally for evaluating
segment performance and deciding how to allocate resources to segments. We are
evaluating the effects of this pronouncement.
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<PAGE> 32
BUSINESS
GENERAL
We are a leading designer, assembler and marketer of recessed and track
lighting fixtures. Our broad product line is used in commercial and residential
remodeling and new construction. Our principal products use a variety of light
sources and are designed for reliable and flexible function, efficient
operation, attractive appearance and simple installation and servicing. Our
business model is differentiated based upon our proven design philosophy, strong
distributor relationships, exceptional customer service and flexible and
efficient assembly process. We outsource manufacturing of virtually all
components to minimize fixed costs and capital requirements and to provide
flexibility in responding to market needs. Our business is geographically
diverse, and while the Company generally does not sell to end-use customers and
accordingly cannot precisely determine the allocation of sales by use, Juno
estimates that sales related to remodeling represented approximately two-thirds
of 1998 sales. As a result, we believe our revenues and cash flow have exhibited
minimal cyclicality. Our net sales and EBITDA for the twelve-month period ended
May 31, 1999 were $168.5 million and $43.0 million, respectively. Since becoming
a public company in 1983, we have generated compound annual sales growth of over
14% and consistently generated EBITDA margins in excess of 20%.
We produce a wide variety of fixtures and related equipment for the
recessed and track lighting market segments. Our recessed lighting fixtures are
designed to be installed directly into ceilings, while our track lighting
fixtures are mounted on electrical tracks affixed to ceilings or walls.
End-users of our products generally prefer them due to their superior design,
reliability and ease of installation. We design and assemble substantially all
of our products in-house. However, we outsource virtually all component
manufacturing to a number of independent vendors principally located near our
production facilities. Inventories are maintained at our two production and
distribution facilities located near Chicago and Indianapolis and at our
distribution facilities near Atlanta, Dallas, Los Angeles, Philadelphia and
Toronto.
Our primary means of distribution is through over 1,200 distributors of
lighting products located throughout the United States and Canada. We have
established ourselves as a preferred lighting supplier by providing high quality
and well-designed products, superior customer service, timely delivery,
technical advice and product training. Our distributors maintain their own
inventory of our products, and, in turn, sell to electrical contractors and
builders and, in some cases, at the retail level. Sales to distributors are made
through our knowledgeable sales staff and through manufacturers' agents who also
sell other, non-competing electrical products. We also have a national accounts
sales force that focuses on department store, specialty retail, supermarket and
commercial accounts. We work closely with these national accounts to provide
custom solutions to their lighting needs and, in turn, to have Juno's products
specified for their major renovations or store expansions.
Economic Industry Reports, Inc., based upon data provided by the U.S.
Department of Commerce, estimates that manufacturers' U.S. sales of
non-automotive lighting fixtures were approximately $8.2 billion in 1997 and
expects this figure to increase by an average of 5.4% annually from 1998 to
reach $11.2 billion in 2003. Juno estimates that the U.S. track and recessed
segments of the lighting industry in which we participate accounted for
approximately $750 million in sales in 1997 and that Juno and two other
manufacturers account for the majority of sales in this core market. Juno
estimates that we have approximately a 20% share of this core market.
COMPETITIVE STRENGTHS
We have the following significant competitive strengths:
- Industry Leadership in Recessed and Track Lighting. We believe we have a
leading position in both the domestic recessed and track lighting market
segments, representing approximately a 20% aggregate market share in
these segments. We believe we are the only major independent lighting
company in the United States with a leading position in both of these
segments. We have
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achieved our leading position by providing innovative and high quality
products, superior customer service and rapid product delivery.
- Strong Distributor Relationships. We have developed strong relationships
with our distributor customers by serving their recessed and track
lighting needs for over 20 years. We have relationships with a broad base
of over 1,200 distributors across the United States and Canada. In
addition, we have strong relationships with a variety of national
department store, specialty retail, supermarket and commercial accounts.
We believe we are the preferred lighting supplier for our key accounts,
and many carry our products exclusively. We fill most orders within 48
hours of receipt which contributes to our reputation as an industry
leader in customer service. We are able to respond quickly to customer
needs by maintaining inventories at our production and distribution
facilities located near Chicago and Indianapolis as well as in our
distribution centers near Atlanta, Dallas, Los Angeles, Philadelphia and
Toronto.
- Innovative Product Design. We believe we are the industry leader in both
the styling and development of recessed and track lighting products. We
generate continuous new product flow through the development of original
products, introduction of product line extensions and improvements of
existing products. This product flow generates sales of new products,
increases demand for related products and heightens market awareness of
our existing products. Our proven design philosophy is focused on the
needs of the market and of our customers, and on products that can be
manufactured efficiently and at low cost. Many of our new and existing
products are protected by patents. Examples of our innovative products
include: Air-Loc Ready, Real Nail Bar Hangers, Sloped Ceiling Downlights,
Trac 12, White Baffles and Wireforms.
- Efficient and Flexible Assembly Model. We design and assemble
substantially all of our products in-house. The fabrication and
production of component parts is outsourced to independent manufacturers
principally located near our production facilities. We believe this
business model is the most efficient method of production, requiring
minimal capital investment by us in plant and equipment, while providing
us with highly flexible and low cost manufacturing capabilities. In
addition, our extensive use of common componentry across product lines
lowers production costs, increases product quality and reduces inventory
investment. In October 1997, we moved our executive offices and Illinois
production and distribution facility to a newly constructed building
located in Des Plaines, Illinois with approximately 540,000 square feet
of space. We believe that this building will allow us to substantially
increase sales volume without material additional investment in this
facility.
- Experienced and Committed Management Team. The members of our management
team, in aggregate, have over 100 years of experience in the lighting
industry and extensive experience with our operations and customers.
Management's successful execution of our differentiated business model
has enabled us to achieve EBITDA margins in excess of 20% through several
economic cycles and has positioned us to capitalize on attractive growth
opportunities. The incentive plan for senior management is linked to
future financial performance and includes options or other equity-based
incentives for up to approximately 14% of our fully diluted common stock
on an as-converted basis.
BUSINESS AND GROWTH STRATEGIES
Our primary business and growth strategies are as follows:
- Continue to Gain Market Share. We have historically been successful in
increasing our share of the recessed and track lighting markets. We
intend to further increase our share through continued emphasis on
delivery of innovative and high-quality products to our customers through
our differentiated business model. In addition, we intend to leverage our
strong distributor relationships to further penetrate existing
end-markets.
- Introduce New Products. We are continually developing and introducing new
products that utilize our production and distribution strengths and
represent profitable growth opportunities. We also
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<PAGE> 34
review existing product lines for potential product improvements and line
extensions. Our development efforts are geared toward designing high
quality products that are innovative, efficient to produce and easy to
install. New products we recently developed or introduced include LED
Edgelit Exit Lights, Multi-Spots, Real Nail 2 Bar Hangers, Slants,
Three-Port Fiberoptic Illuminator and Trac-Sign.
- Add Product Lines. We estimate that the recessed and track lighting
market segments represent less than 10% of total U.S. lighting fixture
industry sales. We seek to add product lines in market segments in which
we do not currently compete, which may include outdoor lighting,
industrial lighting and fluorescent lighting. Many of the products we may
add are sold through the same distribution channels as our current
product lines. Strong relationships with our distributors should allow us
to secure shelf space for new products and expand our product offerings.
We recently introduced a line of exit and emergency lighting products
and, through our acquisition of Advanced Fiberoptic Technologies entered
the fiberoptic lighting products segment.
- Pursue Strategic Acquisitions. We compete in what we believe to be a
large, highly fragmented domestic lighting market that provides numerous
potential acquisition opportunities. We have successfully made
acquisitions that expanded our product offerings and end-markets and
strengthened our distributor relationships, including the acquisitions of
Indy Lighting and Danalite. Our management team has substantial
experience in acquiring and integrating companies in the lighting
industry, and we believe their experience will enable us to successfully
pursue selective strategic acquisitions. Future acquisitions will focus
on broadening our product offering and expanding our distributor and
customer relationships.
PRODUCTS
We produce a wide variety of lighting fixtures and related equipment of
both contemporary and traditional design, most of which are available in a
variety of styles, sizes and finishes. Some styles differ from others only in
size, light source capacity or other minor modifications. Fixtures that we
produce are designed to be installed in recesses in ceilings, mounted on
electrified tracks affixed to ceilings or walls and used in merchandise display
cases.
Each recessed fixture is composed of a housing and a separate trim.
Housings may be fitted with a variety of trims which offer a wide choice of
diffusers, lenses and louvers to satisfy different optical and aesthetic
requirements. Recessed fixtures are generally used for down-lighting, but by
special configuration they also may be used for wall-washing and spot lighting.
We have designed recessed lighting fixtures, sold under the Sloped Ceiling
Downlights name, that provide lighting perpendicular to a floor from a sloped
ceiling. We also produce a series of recessed fixtures, sold under the Air-Loc
Ready name, that are designed to restrict the passage of air into and out of a
residence through the fixture to minimize energy loss.
Our principal track lighting system, sold under the Trac-Master name, is
made up of an electrified extruded aluminum channel, called the track, and a
wide variety of individual fixtures that may be connected to any point on the
track. The individual fixtures are available in different geometric styles,
light source sizes and finishes. Our Trac-Master line of track fixtures allows
each track light to be controlled by either of two switches and includes a
series of miniature low voltage halogen track lights that provides higher lumens
per watt than standard incandescent light sources. We also have a line of track
fixtures, sold under the name of Vector by Juno, to complement our Trac-Master
line of products. This line is a lower priced but high quality line of products
that do not contain some of the features of Trac-Master.
We produce and market a line of miniature track lighting products under the
name Trac 12. This is a low voltage track lighting system featuring small
individual fixtures and a miniature lamp holder used in linear lighting
applications. We also assemble and distribute Trac-Sign, where our patent is
pending, a line of flexible, internally illuminated sign products that work in
conjunction with our existing track system. The product consists of an aluminum
enclosure with a fluorescent light source and permits the end-user to easily and
economically display and light advertising material in the form of standard-size
transparencies.
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As a result of our acquisition of Danalite several years ago, we began
manufacturing and selling a line of fixtures used in show case lighting
applications. Danalite's linear configuration uses low voltage and fluorescent
light sources in show cases as well as other merchandise display cases and other
commercial and residential accent lighting applications. The products are made
utilizing aluminum extruded channels in various lengths and finishes. These
products primarily utilize miniature 12-volt halogen light sources with hinged
sockets to simplify the process of changing the light source.
Advanced Fiberoptic Technologies, Inc., our wholly-owned subsidiary,
designs and assembles a system of fiberoptic lighting products. This system
consists of an illuminator, which uses either halogen or high intensity
discharge light sources, fiberoptic cable and fixtures. The electrically powered
illuminator generates the light and transfers it to the optical fiber. The
principal advantage of fiberoptic lighting is that the light at the application
level is free of heat and ultraviolet light, which can damage displayed items.
We produce a line of energy efficient Exit and Emergency lighting products
that are electronically controlled and surge protected. This product line uses
LED (light emitting diode) technology for its light source.
Indy Lighting, Inc., our wholly owned subsidiary, produces a wide variety
of commercial lighting fixture products for use primarily in department and
specialty retail stores. These products use incandescent, fluorescent, high
intensity discharge and compact fluorescent light sources to provide specialty
and general purpose lighting.
We believe our innovations in simplifying installation and improving the
function of our lighting products have served to increase demand for our
products.
Juno, Indy, Air-Loc, Real Nail, Trac-Master and Wireforms are registered
trademarks of Juno.
INTELLECTUAL PROPERTY
As of May 31, 1999, we owned 45 United States patents and had 6 patent
applications on file with the United States Patent Office. We also have 21
corresponding foreign patents, and 10 registered trademarks in the United
States. We cannot assure you that any patents will be issued with respect to
pending or future applications. As we develop products for new markets and uses,
we normally seek available patent protection. Juno believes that its patents are
important, but does not consider itself materially dependent upon any single
patent or group of related patents.
PRODUCTION
We design and assemble substantially all of our products in-house. However,
we outsource virtually all component manufacturing to a number of independent
vendors located principally near our production facilities. Tools, dies and
molds are manufactured by outside sources to our designs and specifications.
Tooling is consigned to independent job shops, mostly located near our
production facilities, which fabricate and finish the basic components of our
products. We inspect the components and assemble, test, package, store and ship
the finished products. We perform most assembly operations at our production
facilities located near Chicago and Indianapolis.
We outsource manufacturing of virtually all components to minimize fixed
costs and capital requirements and to produce flexibility in responding to
market needs. We believe our utilization of subcontractors with specialized
skills is the most efficient method of manufacturing our products. We further
believe alternate tool making specialists and fabricators are generally
available. We use multiple subcontractors for most of our components to
facilitate availability. In addition, we purchase many of the raw materials used
in the manufacturing of our components to control the quality of the raw
materials used by the subcontractors and to receive more competitive prices for
the raw materials.
We spent approximately $4,095,000, $4,719,000 and $4,309,000 on research,
development and testing of new products and on development of related tooling in
fiscal 1998, 1997 and 1996, respectively.
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SALES AND DISTRIBUTION
We have relationships with a broad base of over 1,200 distributors across
the United States and Canada. Each of our distributors maintains its own
inventory of Juno products and in turn, sells to electrical contractors and
builders and, in some cases, also sells at the retail level. Sales to
distributors are made through our own knowledgeable sales staff and also through
manufacturers' agents who sell other non-competing electrical products. We also
seek to have our products specified by architects, engineers and contractors for
large commercial and institutional projects with actual sales made through our
distributors. We also sell to certain wholesale lighting outlets and national
accounts. Indy sells its products primarily to the department store, specialty
retail, supermarket and commercial construction industries. Indy's products are
generally shipped from the factory directly to the job site.
Inventories are maintained at our production and distribution facilities
near Chicago and Indianapolis as well as in our distribution centers near
Atlanta, Dallas, Los Angeles, Philadelphia and Toronto. Inventories of Indy's
products are maintained at Indy's facility. Most orders are shipped from stock
inventory within 48 hours of receipt.
BACKLOG AND MATERIAL CUSTOMERS
We have no material long-term contracts. Orders are generally filled within
48 hours of receipt and therefore we have no backlog.
COMPETITION
Although we are not aware of published information regarding the market for
our products, we believe that our sales place us among the five highest-selling
manufacturers of track and recessed lighting products in the United States. We
estimate that there are more than fifty manufacturers of competing track and
recessed lighting products. We also compete with manufacturers of a variety of
fluorescent, high intensity discharge, exit and emergency and decorative
lighting products. A number of competitors, including our two largest
competitors, are divisions or subsidiaries of larger companies that have
substantially greater resources than us.
There is wide price variance in competitive products, and we believe that
our line can be described as moderately priced in order to be attractive to the
high-volume commercial and residential markets. However, lighting fixtures are
often purchased in small quantities and, as a result, product features may be
more important to a purchaser in small quantities than cost. We believe that our
growth has been attributable principally to our innovative and high-quality
products, the quality of our sales force and our superior customer service and
rapid product delivery. See "Risk Factors -- The Market in Which We Operate Is
Highly Competitive, and We May Not Be Able to Compete Effectively, Especially
Against Established Competitors with Significantly Greater Financial Resources."
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PROPERTIES
Our executive offices are located at 1300 South Wolf Road, Des Plaines,
Illinois 60018. Our assembly and distribution activities are conducted at the
facilities described in the following table.
<TABLE>
<CAPTION>
APPROXIMATE
LOCATION SQUARE FOOTAGE FUNCTION OWNED/LEASED
-------- -------------- -------- ------------
<S> <C> <C> <C>
Des Plaines, Illinois (Chicago)....... 540,000 Executive Offices, Owned
Production and
Distribution
Fishers, Indiana (Indianapolis)....... 130,000 Production and Owned
Distribution
Cerritos, California (Los Angeles).... 71,000 Distribution Leased
Bridgeport, New Jersey 49,000 Distribution Owned
(Philadelphia)......................
Brampton, Ontario (Toronto)........... 47,000 Distribution Owned
Norcross, Georgia (Atlanta)........... 44,700 Distribution Owned
Carrollton, Texas (Dallas)............ 39,000 Distribution Leased
Palmetto, Florida (Tampa)............. 10,000 Production and Leased
Distribution
</TABLE>
RECENT EVENTS
We were recapitalized in June 1999 and deposited approximately $406.1
million in cash with our exchange agent for payment as merger consideration to
our stockholders. As of today, holders of approximately 533,800 shares of our
common stock have asserted dissenters' rights and have not been paid any merger
consideration. When we use the term recapitalization, we mean the
recapitalization which was effected by the exchange of approximately 87% of the
outstanding shares of our common stock for cash and the merger of Jupiter
Acquisition Corp. with and into us and the related financings.
LEGAL PROCEEDINGS
Juno, its directors, Fremont Investors and Fremont Partners have been named
as defendants in a lawsuit purported to be a class action commenced on or about
April 1, 1999 in the Court of Chancery in and for New Castle County, Delaware.
Such action is captioned Linda Parnes v. George M. Ball, Thomas Tomsovic, Allan
Coleman, Robert S. Fremont, Julius Lewis, Fremont Investors I, LLC, Fremont
Partners, L.P. and Juno Lighting, Inc. (Case No. 17084NC). The complaint in such
lawsuit alleges, among other things, that the Juno Board of Directors breached
its fiduciary duties to Juno stockholders by failing to appoint additional
independent directors and by entering into the merger agreement, and that
Fremont Investors and Fremont Partners aided and abetted such breach of
fiduciary duties. More specifically, the plaintiff alleges, among other things,
that the Juno Board of Directors failed to engage in any market check and agreed
to sell control of Juno to Fremont Investors for a price that was less than
Juno's true worth. As relief, the complaint seeks, among other things, an
injunction against consummation of the merger or, to the extent the merger is
concluded, a rescission of the merger, damages in an unspecified amount, a court
order compelling Juno to appoint two additional independent directors, and an
award to plaintiff of her costs and expenses, including attorneys' and expert's
fees, incurred in connection with such lawsuit.
We believe that the allegations contained in the complaint are without
merit and intend to vigorously contest the action, on behalf of ourself and our
directors, if the plaintiff elects to proceed with her action.
On September 8, 1997, we were served with a complaint for patent
infringement alleged by Mr. Ole K. Nilssen (Case No. 97 C 4624 in the United
States District Court for the Northern District of Illinois). In this complaint,
Mr. Nilssen alleges that we have infringed seven of Mr. Nilssen's patents and
seeks a permanent injunction against our sale of products utilizing the
inventions claimed by such patents
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and unspecified monetary damages, including a request for treble damages. These
patents relate variously to low-voltage, high frequency power supplies for
lighting systems and to track lighting systems incorporating such low-voltage
high frequency power supplies. We have filed an answer and counterclaim denying
the allegations of the complaint and asserting a number of affirmative defenses
and prayers for declaratory relief. On February 17, 1999, the complaint was
amended to add Management Investment & Technology, Ltd. and Digital Lighting,
Inc. as plaintiffs and to claim lost profits of these entities as damages. These
parties are allegedly exclusive licensees under patents held by Mr. Nilssen.
EMPLOYEES
As of May 31, 1999, we employed approximately 1,062 persons. As of May 31,
1999, all of our production employees, who constitute 56% of our employees, were
represented by one of two unions. The expiration dates for the two collective
bargaining agreements pertaining to our Des Plaines, Illinois, and Fishers,
Indiana locations are September 1999 and September 2001, respectively. See "Risk
Factors -- Our Business Could Suffer in the Event of a Work Stoppage by Our
Unionized Labor Force."
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to persons
who are our directors and executive officers with their ages as of July 31,
1999:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL POSITION(S)
- ---- --- ---------------------
<S> <C> <C>
Robert Jaunich II...... 59 Chairman of the Board and Director
Mark N. Williamson..... 36 Director
Glenn R. Bordfeld...... 52 Director, President and Chief Operating Officer
Joel W. Chemers........ 62 Vice President, Human Resources and Legal Affairs
Thomas W. Tomsovic..... 57 Vice President, Operations
George J. Bilek........ 44 Vice President, Finance and Treasurer
Charles F. Huber....... 57 Vice President, Engineering and Special Projects
Scott L. Roos.......... 41 Vice President, Product Management & Development
Richard Stam........... 38 Vice President, Sales
Jacques P. LeFevre..... 44 Vice President; President of Indy Lighting, Inc.
R. Reed Powers......... 48 Vice President; President of Advanced Fiberoptic
Technologies, Inc.
</TABLE>
Robert Jaunich II has served as a director since June 30, 1999. He has
served as President and Chief Executive Officer of Fremont Investors I, LLC
since May 1998, as a Managing Director of Fremont Partners, L.P. and a member of
FP Advisors, L.L.C. since 1996, and as a Managing Director and a member of the
Board of Directors and Executive Committee of the Fremont Group since 1991.
Prior to joining the Fremont Group in 1991, he was Executive Vice President and
a member of the Chief Executive Office of Swiss-based Jacobs Suchard AG.
Previously, he was President of Osborne Computer Corporation, President of Sara
Lee Corporation, and Executive Vice President of Memorex Corporation. Among the
various board positions he holds, Mr. Jaunich is Chairman of the Boards of
Directors of Kinetic Concepts, Inc. and Tapco Holdings, Inc., a director of Kerr
Group, Inc., a director of CNF Transportation, Inc. and Chairman of the Managing
General Partner of Crown Pacific Partners, L.P. His previous board associations
include Coldwell Banker Corporation, Petro Stopping Centers, L.P., Sara Lee
Corporation, Douwe Egberts, The Wine Group, Brach Van houten Holding, Inc. and
Nabob Foods.
Mark N. Williamson has served as a director since June 30, 1999. He has
served as Vice President and Treasurer of Fremont Investors I, LLC since May
1998 and as a Managing Director of Fremont Partners and a member of FP Advisors,
L.L.C. since 1996. Prior to joining Fremont Partners in May 1996, Mr. Williamson
served as a Managing Director at the Harvard Private Capital Group, Inc. from
August 1991. Prior to that time, he was an Associate at ESL Partners, Inc., a
private investment partnership pursuing value-oriented investments in private
and public equity and debt securities. His previous board associations include
Tarquin, PLC and Risk Capital Holdings, Inc.
Glenn R. Bordfeld has served as a director since July 1999. He has been
President, Chief Operating Officer since January 19, 1999. He was the Company's
Vice President, Sales from July 1991 to January 1999. Previously, he was
employed by the Company as its National Sales Manager from November 1988 to July
1991; its Assistant Sales Manager from November 1985 to November 1988 and its
Advertising Manager from November 1982 to November 1985.
Joel W. Chemers has been Vice President, Corporate Planning since January
19, 1999. He was Director, Corporate Planning from October 1997 to January 1999.
From March, 1996 to October 1997 he was Executive Vice President and Chief
Operating Officer of Tisma Machinery, a designer and builder of automatic
cartoning machinery. From 1993 through March 1996 he was Managing Director,
Midwest Region for Starshak & Associates, a consulting firm to underperforming
companies.
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<PAGE> 40
Thomas W. Tomsovic has been employed by the Company since its founding in
1976. He was elected Vice President, Manufacturing in July 1983 and Vice
President, Operations in June 1986.
George J. Bilek has been Vice President, Finance and Treasurer since April
1990. He was employed by the Company as its Comptroller from September 1985 to
April 1990.
Charles F. Huber has been Vice President, Corporate Development since
December 1992. From January 1989 to December 1992 he was employed by the Company
as the Director of Corporate Development. From October 1984 to January 1989 he
was employed by Reliance Electric, Inc., a manufacturer and distributor of
electrical products, as its Vice President and General Manager.
Scott L. Roos rejoined Juno in October 1998 as Vice President, Product
Management and Development. From August 1994 through October 1998 he was Vice
President, Product Development and Marketing for Alkco, a division of the JJI
Lighting Group (a manufacturer of lighting products). From 1990 through August
1994 he was the Company's Director of New Product Development.
Richard Stam has been Vice President, Sales since August 1999. From 1997 to
1999, he was our national sales manager for North America. From 1994 to 1997, he
was the National Sales Manager for Juno Lighting, Ltd., our Canadian subsidiary.
Jacques P. LeFevre has served as a Vice President since August 1999. He has
been President of Indy Lighting, Inc. (acquired by Juno in 1988) since October
1994. He was Vice President and General Manager from October 1983 to October
1994. Previously he was a Certified Public Accountant with Arthur Young &
Company for six years.
R. Reed Powers has served as a Vice President since August 1999. He has
also been President of Advanced Fiberoptic Technologies, a subsidiary of Juno,
since June 1997. He was President of Sunlight Lighting Inc. from 1983 to 1997.
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<PAGE> 41
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
INDEMNIFICATION AND INSURANCE
Juno's certificate of incorporation and bylaws contain provisions identical
to those existing prior to the recapitalization with respect to elimination of
personal liability and indemnification. These provisions will not be amended,
repealed or otherwise modified for a period of six years in any manner that
would adversely affect the rights of present and former officers and directors
of Juno and its subsidiaries at the time of the recapitalization.
In addition, Juno has agreed to maintain for six years directors' and
officers' liability insurance policies on terms and conditions which are at
least as favorable as those in effect at the effective time of the
recapitalization, covering events occurring prior to the recapitalization. In no
event will Juno be required to spend in any year in excess of 300% of the
aggregate premiums paid by Juno in 1998 on an annualized basis for such purpose.
If Juno would be required to spend in excess of 300% of the aggregate premiums
paid by Juno in 1998 on an annualized basis for such purpose for any year, Juno
must buy as much insurance as can be obtained for a cost not exceeding such
amount.
CHANGE OF CONTROL BENEFITS ARRANGEMENTS
The Board approved and Juno has entered into change of control benefits
agreements with the following executive officers of Juno: Thomas W. Tomsovic,
Charles F. Huber, George J. Bilek, and Glenn R. Bordfeld, and with three other
officers of Juno. These agreements provide for severance and other benefits in
the event of a change of control of Juno and in the event of certain
terminations of employment under employment contracts becoming effective upon
the change of control and ending upon six months notice from Juno, but no
earlier than December 31, 2000. Some benefits would be provided immediately upon
the change of control. Severance benefits for termination of employment after
the change of control would be payable only if an executive's employment is
terminated by Juno without "cause" or by the executive for "good reason." For
this purpose, "good reason" includes material adverse changes in duties,
reduction in salary, or a required move of more than 40 miles. "Cause" for these
purposes means commission of certain felonies, substance abuse, and serious
misconduct or neglect in the course of duties.
The recapitalization and the merger constituted a change of control
pursuant to these agreements. Upon the consummation of the recapitalization, the
principal benefits that were provided include (1) an employment contract with
(a) a 5% minimum annual base salary increase payable beginning at the end of
fiscal year 1999, (b) no adverse change in duties, (c) no required move of more
than 40 miles, and (d) participation in benefit and welfare plans; (2) a
transaction bonus of $150,000; (3) a performance bonus based on projected
operating income for the year of the change of control, prorated for the portion
of the year elapsed prior to the change of control and multiplied by 115%; and
(4) the acceleration of vesting of all unvested stock options.
The principal benefits that would be provided as severance benefits upon
termination by the executive for good reason or by Juno other than for cause or
disability include: (1) a lump sum payment equal to the greater of (x) six
months' base salary or (y) the base salary which would have been payable through
December 31, 2000; (2) a payment equal to forfeited retirement benefits, if any;
and (3) continuation of medical, dental, life insurance and other fringe
benefits for the greater of (x) six months or (y) until December 31, 2000. In
addition, the agreements provide reimbursement of legal fees for actions to
enforce the agreements brought in good faith, regardless of whether the
executive prevails in such action. The benefits are capped at the maximum amount
payable without triggering excise tax under the golden parachute provisions of
the Internal Revenue Code.
Payments that would be made to the persons who are parties to the change of
control benefits agreements in the event of their termination during the
employment period after the recapitalization (other than for cause or by reason
of the executive's death or disability) amount to a maximum of approximately
$2,167,000 for all officers with change of control benefits agreements. This
amount is based on numerous
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<PAGE> 42
assumptions, including that all of the parties to the change of control benefit
agreements were terminated on July 31, 1999. However, no such persons have been
so terminated.
The foregoing is only a summary and is qualified in its entirety by
reference to the terms of each change of control benefits agreement.
MANAGEMENT SERVICES AGREEMENT
Juno and Fremont Partners L.L.C. entered into a management services
agreement at the effective time of the merger pursuant to which Fremont Partners
L.L.C. will render certain management services in connection with Juno's
business operations, including strategic planning, finance, tax and accounting
services. Juno will pay Fremont Partners L.L.C. an annual management fee of
$325,000 to render such services.
MANAGEMENT PARTICIPATION IN THE RECAPITALIZATION
In Fremont's prior acquisitions, entities affiliated with Fremont Partners
have offered equity ownership opportunities to the key management of the
companies they have acquired. In connection with the recapitalization, Fremont
Investors offered management and certain employees of Juno an opportunity to
purchase from Juno a portion of the Series A convertible preferred stock and
several such persons have purchased 8,030 shares in the aggregate.
37
<PAGE> 43
DESCRIPTION OF CAPITAL STOCK
The following description of Juno's capital stock does not purport to be
complete and is subject in all respects to applicable Delaware law and to the
provisions of the amended and restated certificate of incorporation.
AUTHORIZED CAPITAL STOCK
Under the amended and restated certificate of incorporation, the total
number of shares of all classes of capital stock that Juno has authority to
issue is 50,000,000, par value $.001 per share, of which 45,000,000 are shares
of Juno common stock and 5,000,000 are shares of Juno preferred stock.
COMMON STOCK
Holders of Juno common stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders, including the election of
directors, and are entitled to receive ratably such dividends, if any, as may be
declared from time to time by the Board of Directors out of funds legally
available. In the event of a liquidation, dissolution or winding up of Juno,
holders of Juno common stock are entitled to share ratably in all assets
remaining after payment of Juno's liabilities and payment of the liquidation
preference of the Series A convertible preferred stock. Holders of Juno common
stock have no right to convert their shares of Juno common stock into other
securities, and there are no redemptive provisions with respect to such shares.
All of the outstanding shares of Juno are fully paid and non-assessable.
The rights, preferences and privileges of holders of Juno common stock are
subject to, and may be adversely affected by, the rights of holders of the
Series A convertible preferred stock and the shares of any other series of Juno
preferred stock which Juno may designate and issue in the future.
PREFERRED STOCK
Under the amended and restated certificate of incorporation, the Board of
Directors is authorized at any time and from time to time to provide for the
issuance of all or any shares of the Juno preferred stock in one or more classes
or series, and to fix for each such class or series such voting powers, full or
limited, or no voting powers, and such distinctive designations, preferences and
relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof as are permitted by Delaware
law, including, but not limited to, the authority to provide that any such class
or series be: (a) subject to redemption at such time or times and at such price
or prices; (b) entitled to receive dividends (which may be cumulative or
non-cumulative) at such rates, on such conditions, and at such times, and
payable in preference to, or in such relation to, the dividends payable on any
other class or classes or any other series; (c) entitled to such rights upon the
dissolution of, or upon any distribution of the assets of, Juno; or (d)
convertible into, or exchangeable for, shares of any class or classes of stock,
or other securities or property, of Juno at such price or prices or at such
rates of exchange and with such adjustments; all as the Board determines by
resolution.
Under the amended and restated certificate of incorporation, Juno has
designated 1,060,000 shares of Juno preferred stock as the Series A convertible
preferred stock, which shares were issued to Fremont Investors, members of
Juno's management and certain employees of Juno in connection with the
recapitalization.
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<PAGE> 44
SERIES A CONVERTIBLE PREFERRED STOCK
Holders of the Series A convertible preferred stock are entitled to receive
cumulative quarterly dividends, whether or not declared by the Board of
Directors, in an amount equal to the greater of:
- dividends which would have been payable to the holders of Series A
convertible preferred stock in such quarter had they converted their
Series A convertible preferred stock into Juno common stock prior to the
record date of dividends declared on the common stock in such quarter;
and
- the stated amount then in effect multiplied by 2%.
For the first five years following issuance, the dividends on the Series A
convertible preferred stock will be payable by an increase in the stated amount
of such stock. After five years from the issuance date, and continuing until
redemption or conversion, Juno will be required to pay the dividends on the
Series A convertible preferred stock in cash, calculated as described above,
subject to certain covenants and restrictions contained in the indenture and the
senior credit facilities.
PREEMPTIVE RIGHTS
No holder of any shares of any class of stock of Juno, other than the
Series A convertible preferred stock, has any preemptive or preferential right
to acquire or subscribe for any unissued shares of any class of stock or any
authorized securities which are convertible into or carry any right, option or
warrant to subscribe for or acquire shares of any class of stock.
39
<PAGE> 45
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
COMMON STOCK
PRINCIPAL HOLDERS
The following table sets forth, as of July 31, 1999, the number and
percentage of outstanding shares of common stock beneficially owned by each
person known to us to be the beneficial owner of more than five percent of the
outstanding shares of our common stock.
<TABLE>
<CAPTION>
PERCENTAGE OF SHARES OUTSTANDING(1)
----------------------------------------
ASSUMING NO ASSUMING
CONVERSION OF CONVERSION OF ALL
OUTSTANDING SHARES OUTSTANDING SHARES
SHARES OF SERIES A OF SERIES A
BENEFICIALLY CONVERTIBLE CONVERTIBLE
NAME AND ADDRESS OWNED PREFERRED STOCK PREFERRED STOCK(2)
---------------- ------------ ------------------ ------------------
<S> <C> <C> <C>
Fremont Investors I, LLC(3)...................... 4,007,695(3) 62.5% 62.2%
50 Fremont Street, Suite 3700
San Francisco, California 94105
Gabriel Capital Corporation(4)................... 730,125 30.4 11.3
450 Park Avenue
New York, New York 10022
Seneca Capital, L.P.(5).......................... 238,760 9.9 3.7
830 Third Avenue, 14th Floor
New York, New York 10022
</TABLE>
- -------------------------
(1) Assumes that all dissenting shareholders in the merger withdraw their
demands for appraisal rights and that 2,400,000 shares of common stock are
outstanding.
(2) Assumes the conversion of all 1,060,000 shares of series A convertible
preferred stock outstanding as of June 30, 1999 into 4,038,095 shares of
common stock.
(3) Based on a Schedule 13D filed July 13, 1999 by Fremont Investors I, LLC,
Fremont Partners, L.P., FP Advisors, L.L.C., Fremont Group, L.L.C. and
Fremont Investors, Inc. According to the Schedule 13D, as of June 30, 1999,
Fremont Investors owned 1,052,020 shares of Series A convertible preferred
stock, which was convertible as of June 30, 1999 into 4,007,695 shares of
common stock, and Fremont Partners as the managing member of Fremont
Investors, FP Advisors as the general partner of Fremont Partners, Fremont
Group as the managing member of FP Advisors and Fremont Investors, Inc. as
manager of Fremont Group may be deemed to beneficially own the Series A
convertible preferred stock, and the shares of common stock into which such
Series A convertible preferred stock is convertible, owned directly by
Fremont Investors, and all of the foregoing entities may be deemed to have
shared voting power and shared dispositive power with respect to such
shares.
(4) Based on a Schedule 13D filed July 29, 1999 by Gabriel Capital Corporation
("Gabriel") and J. Ezra Merkin. According to the Schedule 13D, Gabriel has
the power to vote or direct the vote and to dispose or direct the
disposition of 435,155 shares, Mr. Merkin has the power to vote or direct
the vote and to dispose or direct the disposition of 294,970 held by Gabriel
and may be deemed to have the power to vote or direct the vote and to
dispose or direct the disposition of 435,155 shares held by Ariel Fund
Limited.
(5) Based on a Schedule 13G filed August 3, 1999 by Seneca Capital, L.P. ("SC
LP"), Seneca Capital Advisors, LLC ("SC LLC"), Seneca Capital International,
Ltd. ("SCI Ltd."), Seneca Capital Investments, LLC ("SCI LLC") and Douglas
A. Hirsch (collectively, "Seneca") and other information provided by
representatives of Seneca. According to the Schedule 13G and representatives
of Seneca, Mr. Hirsch beneficially owns 238,760 shares and shares the power
to vote or direct the vote and to dispose or direct the disposition of
238,760 shares, SC LP and SC LLC each beneficially
40
<PAGE> 46
owns and shares the power to vote or direct the vote and to dispose or direct
the disposition of 84,756 shares, SCI Ltd. beneficially owns and shares the
power to vote or direct the vote and to dispose or direct the disposition of
143,849 shares, and SCI LLC beneficially owns 154,004 shares, of which it has
the sole power to vote or direct the vote and to dispose or direct the
disposition of 10,155 shares and shares the power to vote or direct the vote and
to dispose or direct the disposition of 143,849 shares.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, as of July 31, 1999, the number and
percentage of outstanding shares of our common stock beneficially owned by each
director, certain executive officers and all executive officers and directors as
a group. The persons named hold sole voting and investment power with respect to
the shares of Juno common stock listed below, except as otherwise indicated.
Unless otherwise indicated, the business address of each named person is 1300
South Wolf Road, Des Plaines, Illinois 60018.
<TABLE>
<CAPTION>
PERCENTAGE OF SHARES OUTSTANDING(1)
----------------------------------------
ASSUMING NO ASSUMING
CONVERSION OF CONVERSION OF ALL
SHARES OUTSTANDING SHARES OUTSTANDING SHARES
BENEFICIALLY OF SERIES A OF SERIES A
NAME OWNED PREFERRED STOCK PREFERRED STOCK(2)
---- ------------ ------------------ ------------------
<S> <C> <C> <C>
Robert Jaunich II(3)............................. 4,007,695(4) 62.5% 62.2%
Mark Williamson(3)............................... 4,007,695(4) 62.5 62.2
Robert S. Fremont(5)............................. 36,385 1.5 *
Glenn R. Bordfeld(6)(7).......................... 11,232 * *
Thomas W. Tomsovic(8)(9)......................... 21,904 * *
George J. Bilek(8)(10)........................... 24,416 * 1.0
Charles F. Huber(8)(11).......................... 22,185 * *
All directors and executive officers as a 4,144,733 63.2 63.2
group (9 persons)(12).....................
</TABLE>
- -------------------------
* Less than 1%.
(1) Assumes that all dissenting shareholders in the merger withdraw their
demands for appraisal rights and that 2,400,000 shares of common stock are
outstanding.
(2) Assumes the conversion of all 1,060,000 shares of series A convertible
preferred stock outstanding.
(3) Mr. Jaunich is President and Chief Executive Officer of Fremont Investors
I, LLC, and Mr. Williamson is Vice President and Treasurer of Fremont
Investors I, LLC. Messrs. Jaunich and Williamson each are Managing
Directors of Fremont Partners, the managing member of Fremont Investors.
They each may be deemed to have beneficial ownership of the shares of
common stock owned by Fremont Investors, but each disclaims any such
beneficial ownership. The business address of Mr. Jaunich and Mr.
Williamson is 50 Fremont Street, Suite 3700, San Francisco, California
94105.
(4) Assumes the conversion of 1,052,020 shares of preferred stock beneficially
owned by Fremont Investors as of June 30, 1999 into 4,007,695 shares of
common stock. See "-- Principal Holders."
(5) Mr. Fremont, our Chairman and Chief Executive Officer during the fiscal
year ended November 30, 1998, resigned such positions upon the merger on
June 30, 1999. The address of Mr. Fremont is 610 Brierhill Road, Deerfield,
Illinois 60015.
(6) Executive Officer and Director
(7) Includes 8,000 shares which Mr. Bordfeld has the right to acquire within 60
days of July 31, 1999 and assumes the conversion as of June 30, 1999 into
2,857 shares of common stock of 750 shares of preferred stock held by Mr.
Bordfeld.
(8) Executive Officer
(9) Includes 20,000 shares which Mr. Tomsovic has the right to acquire within
60 days of July 31, 1999 and assumes the conversion into 1,904 shares of
common stock of 500 shares of series A convertible preferred stock held by
Mr. Tomsovic.
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<PAGE> 47
(10) Includes 20,000 shares which Mr. Bilek has the right to acquire within 60
days of July 31, 1999 and assumes the conversion into 3,809 shares of
common stock of 1,000 shares of series A convertible preferred stock held
by Mr. Bilek.
(11) Includes 20,000 shares which Mr. Huber has the right to acquire within 60
days of July 31, 1999 and assumes the conversion into 1,904 shares of
common stock of 500 shares of series A convertible preferred stock held by
Mr. Huber.
(12) Includes 116,600 shares which nine executive officers have the right to
acquire within 60 days of July 31, 1999 and assumes the conversion into
18,476 shares of common stock of 4,850 shares of series A convertible
preferred stock held by such executive officers. Excludes shares owned by
Mr. Fremont.
SERIES A PREFERRED STOCK
Set forth below is information regarding the beneficial ownership of our
series A preferred stock, without giving effect to the conversion of such
preferred stock into common stock.
PRINCIPAL HOLDER
The following table sets forth, as of July 31, 1999, the number and
percentage of outstanding shares of series A convertible preferred stock
beneficially owned by each person known to us to be the beneficial owner of more
than five percent of the outstanding shares of our series A convertible
preferred stock.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
BENEFICIALLY OF SHARES
NAME AND ADDRESS OWNED OUTSTANDING
---------------- ------------ -----------
<S> <C> <C>
Fremont Investors I, LLC.................................... 1,052,020 99.2%
50 Fremont Street, Suite 3700
San Francisco, California 94105
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, as of July 31, 1999, the number and
percentage of outstanding shares of our series A preferred stock beneficially
owned by each director, certain executive officers and all executive officers
and directors as a group. The persons named hold sole voting and investment
power with respect to the shares of our common stock listed below, except as
otherwise indicated. Unless otherwise indicated, the business address of each
named person is 1300 South Wolf Road, Des Plaines, Illinois 60018.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
BENEFICIALLY OF SHARES
NAME AND ADDRESS OWNED OUTSTANDING
---------------- ------------ -----------
<S> <C> <C>
Robert Jaunich II(1)........................................ 1,052,020 99.2%
Mark N. Williamson(1)....................................... 1,052,020 99.2
Robert S. Fremont(2)........................................ 0 *
Glenn R. Bordfeld........................................... 750 *
Thomas W. Tomsovic.......................................... 500 *
George J. Bilek............................................. 1,000 *
Charles F. Huber............................................ 500 *
All directors and executive officers as a group (9
persons)............................................... 1,056,270 99.7
</TABLE>
- -------------------------
* Less than 1%.
(1) Mr. Jaunich is the President and Chief Executive Officer of Fremont
Investors and a Managing Director of Fremont Partners, the managing member
of Fremont Investors. Mr. Williamson is Vice President and Treasurer of
Fremont Investors and a Managing Director of Fremont Partners. They each may
be deemed to have beneficial ownership of the shares of preferred stock
owned by Fremont Investors, but each disclaims any such beneficial
ownership. The business address of Mr. Jaunich and Mr. Williamson is 50
Fremont Street, Suite 3700, San Francisco, California 94105.
(2) Mr. Fremont, our Chairman and Chief Executive Officer during the fiscal year
ended November 30, 1998, resigned such positions upon the merger on June 30,
1999. The address of Mr. Fremont is 610 Brierhill Road, Deerfield, Illinois
60015.
42
<PAGE> 48
EXECUTIVE COMPENSATION
The following Summary Compensation Table includes individual compensation
information regarding all compensation awarded to, earned by, or paid during the
fiscal years ended November 30, 1998, 1997 and 1996 to Juno's former Chief
Executive Officer, Mr. Fremont and the four other most highly compensated
executive officers in the fiscal year ended November 30, 1998 in all capacities
in which they served during the years in which they have been executive
officers. Mr. Fremont resigned as a director and officer upon the merger on June
30, 1999.
As reflected in the following table, Mr. Fremont participated and the four
other most highly paid executive officers of Juno currently participate in
Juno's 401(k) Plan. In addition, the named executives participate in, and
(except for Mr. Fremont) have received grants under, Juno's Stock Option Plans,
effective July 18, 1983 (the "1983 Stock Option Plan") and December 2, 1993 (the
"1993 Stock Option Plan"). No option grants were made to any of such named
executive officers in the fiscal year ended November 30, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------------
OTHER ANNUAL ALL OTHER
NAME & PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) COMPENSATION(2)
------------------------- ---- ------ ----- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Robert S. Fremont................... 1998 $504,400 $ -- -- $12,000
Chairman of the Board and 1997 504,400 -- -- 9,750
Chief Executive Officer 1996 504,000 -- -- 9,750
Glenn R. Bordfeld................... 1998 $186,539(3) $23,491 -- $12,000
President and Chief Operating
Officer 1997 176,154 -- -- 9,750
1996 166,346 -- -- 9,750
Thomas W. Tomsovic.................. 1998 $230,000 $23,491 -- $12,000
Vice President, Operations 1997 220,000 -- -- 9,750
1996 210,000 -- -- 9,750
George J. Bilek..................... 1998 $186,539 $23,491 -- $12,000
Vice President, Finance and
Treasurer 1997 176,154 -- -- 9,750
1996 165,481 -- -- 9,750
Charles F. Huber.................... 1998 $190,721 $23,491 -- $12,000
Vice President, Corporate
Development.................... 1997 180,077 -- -- 9,750
1996 169,471 -- -- 9,750
</TABLE>
- -------------------------
(1) With respect to each named executive officer for each fiscal year, excludes
perquisites which did not exceed the lesser of $50,000 or 10% of the named
executive officer's salary and bonus for the fiscal year.
(2) Includes Juno's matching and discretionary contributions under the 401(k)
Plan. Amounts are included without regard to vesting of any Company
discretionary contributions.
(3) Mr. Bordfeld became Juno's President and Chief Operating Officer on January
19, 1999. Mr. Bordfeld previously served as Vice President -- Sales.
Juno and the named executive officers have entered into Change of Control
Benefits Agreements. See "Certain Relationships and Related Party
Transactions -- Change in Control Benefits Arrangements."
43
<PAGE> 49
STOCK OPTION PLAN EXERCISES AND YEAR-END VALUE TABLE
The following table discloses, for each of the executive officers listed,
information regarding stock options exercised during, or held at the end of, the
fiscal year ended November 30, 1998 pursuant to Juno's 1983 and 1993 Stock
Option Plans.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
TOTAL NUMBER OF TOTAL VALUE OF UNEXERCISED
NUMBER UNEXERCISED OPTIONS HELD IN-THE-MONEY OPTIONS
OF SHARES AT FISCAL YEAR END(1) HELD AT FISCAL YEAR(1)(2)
ACQUIRED VALUE ------------------------------- -------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE(3) EXERCISABLE UNEXERCISABLE(3)
---- ----------- -------- ----------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Robert S. Fremont...... -- $ 0 0 0 $ 0 $ 0
Glenn R. Bordfeld...... 12,000 45,250 4,000 4,000 25,375 35,750
Thomas W. Tomsovic..... -- 0 16,000 4,000 91,125 35,750
George J. Bilek........ -- 0 16,000 4,000 91,125 35,750
Charles F. Huber....... -- 0 16,000 4,000 91,125 35,750
</TABLE>
- -------------------------
(1) All options outstanding at the end of the fiscal year ended November 30,
1998, are incentive stock options and were granted at 100% of the fair
market value of Juno's common stock on the date of the grant. For all such
options, up to 20% of the shares covered by each option may be purchased
commencing on the first anniversary of the date of the grant and the amount
increases by 20% on each anniversary thereafter. Such options will expire at
various dates between December 9, 2003 and October 19, 2008. For incentive
stock options granted after December 31, 1986, the aggregate fair market
value of common stock with respect to which Incentive Stock Options become
exercisable for the first time by any individual grantee during any calendar
year may not exceed $100,000.
(2) Total value of options is based on the difference between the fair market
value of Juno common stock of $23.375, as of November 30, 1998, and the
exercise price per share of the options.
(3) Upon consummation of the merger on June 30, 1999 all outstanding stock
options vested and became fully exercisable.
COMPENSATION OF DIRECTORS
Except to the extent Messrs. Jaunich and Williamson may be deemed to be
compensated through the management services agreement between Fremont Partners
L.L.C. and us, directors who are not our employees are not compensated.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Other than the Compensation Committee members and Mr. Fremont, who attended
meetings of the Compensation Committee at the request of the Compensation
Committee and made recommendations regarding the compensation level of executive
officers other than himself, no current or former officer or employee of Juno or
its subsidiaries participated in the deliberations of the Board concerning
executive compensation during the fiscal year ended November 30, 1998.
44
<PAGE> 50
DESCRIPTION OF SENIOR CREDIT FACILITIES
General. In connection with the recapitalization, Juno entered into the
senior credit facilities with NationsBank, N.A., Credit Suisse First Boston and
certain other lenders. The senior credit facilities provide for aggregate
borrowings by Juno of approximately $125.0 million.
The senior credit facilities include (1) a $40.0 million tranche A term
loan (the "Term Loan A"), (2) a $50.0 million tranche B term loan (the "Term
Loan B") and (3) a $35.0 million revolving credit facility. Up to $5.0 million
of the revolving credit facility may be utilized to issue letters of credit.
Amounts borrowed under the revolving credit facility may be repaid and
reborrowed from time to time prior to the sixth anniversary of the closing date.
Interest. Amounts outstanding under the senior credit facilities bear
interest, at Juno's option, at a rate per annum equal to either: (1) the
Eurodollar Rate (the London interbank offered rate for eurodollar deposits as
adjusted for statutory reserve requirements) or (2) the Base Rate, in each case,
plus the Applicable Percentage. The "Base Rate" is defined as the higher of (1)
NationsBank's Prime Rate and (2) the Federal Funds Effective Rate plus 0.50%.
The Applicable Percentage for the revolving credit facility and the Term Loan A
is initially 1.0% for Base Rate loans and 2.5% for Eurodollar loans. The
Applicable Percentage for the Term Loan B is initially 1.5% for Base Rate loans
and 3.0% for Eurodollar loans. The Applicable Percentage for the revolving
credit facility, the Term Loan A and the Term Loan B adjusts according to a
performance pricing grid based on Juno's ratio of total funded debt to
consolidated EBITDA, ranging from (1) for Eurodollar loans, 2.5% to 1.625% for
the revolving credit facility and the Term Loan A and 3.0% to 2.75% for the Term
Loan B and (2) for Base Rate loans, 1.0% to 0.125% for the revolving credit
facility and the Term Loan A and 1.5% to 1.25% for the Term Loan B. Swingline
loans under the revolving credit facility bear interest at the Base Rate plus
0.50% without regard to Juno's ratio of total funded debt to consolidated
EBITDA.
Maturity. Borrowings under the revolving credit facility are due and
payable on November 30, 2005. The Term Loan A is payable in quarterly
installments ranging from $750,000 to $2,500,000, commencing February 29, 2000.
The final maturity of the Term Loan A is November 30, 2005. Borrowings under the
Term Loan B are due and payable in quarterly installments of (1) $125,000, from
February 29, 2000 through November 30, 2005 and (2) $11,750,000, from February
28, 2006 through November 30, 2006. The final maturity of the Term Loan B is
November 30, 2006.
Mandatory Prepayment. Juno is required to prepay the Term Loan A and the
Term Loan B with: (1) 100% of the net cash proceeds of all asset sales by Juno
and its subsidiaries (including sales of stock of subsidiaries of Juno), net of
selling expenses and taxes, subject to limited exceptions, (2) 100% of the net
cash proceeds of issuances of equity and debt obligations of Juno and its
subsidiaries, subject to limited exceptions and (3) 75% of excess cash flow if
the total funded debt to consolidated EBITDA ratio is equal to or greater than
3.75:1.00, or 50% of excess cash flow if the total funded debt to consolidated
EBITDA ratio is less than 3.75:1.00. To the extent that the amount of any
mandatory prepayment exceeds the outstanding loans under the Term Loan A and the
Term Loan B, loans under the revolving credit facility will be repaid and the
commitments under the revolving credit facility will be reduced.
Voluntary Prepayment. Juno may, at its option, prepay the Term Loan A, the
Term Loan B and the loans under the revolving credit facility, in minimum
principal amounts of $1,000,000, without premium or penalty, subject to
reimbursement of the lenders' breakage or redeployment costs in the case of
prepayment of Eurodollar Rate borrowings.
Guarantees. All obligations of Juno under the senior credit facilities are
unconditionally guaranteed by each existing and each subsequently acquired or
organized domestic subsidiary of Juno.
Security. The senior credit facilities are secured by a first priority
perfected security interest in all existing and after-acquired tangible and
intangible assets of Juno and its domestic subsidiaries, including, without
limitation, intellectual property, real property, all of the capital stock owned
by Juno and each of its domestic subsidiaries (subject to a limit of 65% of the
capital stock of foreign subsidiaries) and any intercompany debt obligations
(subject to limited exceptions).
45
<PAGE> 51
Covenants. The senior credit facilities require Juno to satisfy certain
financial tests, including, without limitation, causing the ratio of total
funded debt to consolidated EBITDA not to exceed certain specified levels; and
causing Juno's interest coverage ratio and fixed charge coverage ratio to exceed
certain specified levels. The senior credit facilities also contain certain
covenants which, among other things, limit the incurrence of additional
indebtedness, liens and negative pledges, mergers, consolidations and sales of
assets, investments, loans, advances and acquisitions, capital expenditures,
dividends, stock redemptions and redemption or prepayment of other indebtedness
and transactions with affiliates. The senior credit facilities also prohibit
prepayments of the notes and amendments to the terms of the notes.
Events of Default. The senior credit facilities contain customary events of
default, including, without limitation, payment defaults, breaches of
representations and warranties, covenant defaults, cross-default to material
indebtedness and agreements, bankruptcy and similar events, material judgments,
ERISA defaults, failure of any guaranty or security document supporting the
senior credit facilities to be in full force and effect and the occurrence of a
change in control of Juno.
46
<PAGE> 52
DESCRIPTION OF NOTES
You can find the definitions of certain terms used in this description
under the subheading "Certain Definitions." In this description, the word
"Company" refers only to Juno Lighting, Inc., and not to any of its
subsidiaries.
The Company issued the old Notes, and will issue the new Notes, under an
Indenture (the "Indenture") among itself, the Guarantors and Firstar Bank of
Minnesota, N.A., as trustee (the "Trustee"). The terms of the new Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The
Company and the initial purchasers have also entered into the registration
rights agreement with respect to the old Notes (the "Registration Rights
Agreement").
The following description is a summary of the material provisions of the
Indenture. It does not restate the Indenture in its entirety. We urge you to
read the Indenture because it, and not this description, define your rights as
holders of the Notes. Certain defined terms used in this description but not
defined below under "-- Certain Definitions" have the meanings assigned to them
in the Indenture. The Indenture is filed as an exhibit to the registration
statement which includes this prospectus. The new Notes are identical in all
material respects to the terms of the old Notes, except for certain transfer
restrictions and registration rights relating to the old Notes and except that
if the exchange offer is not consummated by November 27, 1999, the interest rate
on the old Notes will increase by 0.5% per annum during each subsequent 90-day
period up to a maximum overall increase of 2.0% per annum until the exchange
offer is completed.
BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES
The Notes
The Notes:
- are general unsecured obligations of the Company;
- are subordinated in right of payment to all existing and future
Senior Debt of the Company;
- are pari passu in right of payment with any future senior
subordinated Indebtedness of the Company; and
- are unconditionally guaranteed by the Guarantors.
The Guarantees
The Notes are guaranteed by all of the material Domestic Subsidiaries of
the Company.
Each Guarantee of the Notes:
- is a general unsecured obligation of the Guarantor;
- is subordinated in right of payment to all existing and future
Senior Debt of the Guarantor; and
- is pari passu in right of payment with any future senior
subordinated Indebtedness of the Guarantor.
Not all of our subsidiaries will guarantee the Notes. In the event of a
bankruptcy, liquidation or reorganization of any of these non-guarantor
subsidiaries, these non-guarantor subsidiaries will pay the holders of their
debts and their trade and all other creditors before they will be able to
distribute any of their assets to us. Our sole non-guarantor subsidiary
generated 6.0% of our consolidated revenues in the twelve-month period ended May
31, 1999 and held 2.5% of our consolidated assets as of May 31, 1999. The
guarantor subsidiaries generated 21.5% of our consolidated revenues in the
twelve-month period ended May 31, 1999 and held 27.6% of our consolidated assets
as of May 31, 1999.
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As of the date of the Indenture, all of our subsidiaries will be
"Restricted Subsidiaries." However, under the circumstances described below
under the subheading "-- Certain Covenants -- Designation of Restricted and
Unrestricted Subsidiaries," we will be permitted to designate certain of our
subsidiaries as "Unrestricted Subsidiaries." Our Unrestricted Subsidiaries will
not be subject to many of the restrictive covenants in the Indenture. Our
Unrestricted Subsidiaries will not guarantee the Notes.
PRINCIPAL, MATURITY AND INTEREST
The Indenture provides for the issuance by the Company of Notes with a
maximum aggregate principal amount of $125 million. The Company may issue up to
$75 million of additional notes (the "Additional Notes") from time to time after
this offering. Any offering of Additional Notes is subject to the covenants
contained in the Indenture described below. The Notes and any Additional Notes
subsequently issued under the Indenture would be treated as a single class for
all purposes under the Indenture, including, without limitation, waivers,
amendments, redemptions and offers to repurchase. No offering of Additional
Notes is being made by this prospectus. In addition, we do not know whether we
will issue Additional Notes or the aggregate principal amount of such Additional
Notes. The Company will issue Notes only in registered form without coupons and
only in denominations of $1,000 and integral multiples of $1,000. The New Notes
will mature on July 1, 2009.
Interest on the Notes will accrue at the rate of 11 7/8% per annum and will
be payable semi-annually in arrears on January 1 and July 1, commencing on
January 1, 2000. The Company will make each interest payment to the Holders of
record on the immediately preceding December 15 and June 15.
Interest on the Notes will accrue from the date of original issuance or, if
interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
METHODS OF RECEIVING PAYMENTS ON THE NOTES
If a Holder has given wire transfer instructions to the Company, the
Company will pay all principal, interest and premium, if any, on that Holder's
Notes in accordance with those instructions. All other payments on Notes will be
made at the office or agency of the Paying Agent and Registrar within the City
and State of New York unless the Company elects to make interest payments by
check mailed to the Holders at their addresses set forth in the register of
Holders.
PAYING AGENT AND REGISTRAR FOR THE NOTES
The Trustee will initially act as Paying Agent and Registrar. The Company
may change the Paying Agent or Registrar without prior notice to the Holders,
and the Company or any of its Subsidiaries may act as Paying Agent or Registrar.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange Notes in accordance with the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents, and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to transfer or exchange any Note selected
for redemption. Also, the Company is not required to transfer or exchange any
Note for a period of 15 days before a selection of Notes to be redeemed.
The registered Holder of a Note will be treated as the owner of it for all
purposes.
SUBSIDIARY GUARANTEES
The Guarantors will jointly and severally guarantee on an unconditional,
senior subordinated basis the Company's obligations under the Notes (each a
"Subsidiary Guarantee"). Each Subsidiary Guarantee will be subordinated to the
prior payment in full of all Senior Debt of that Guarantor. The obligations of
each
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<PAGE> 54
Guarantor under its Subsidiary Guarantee will be limited as necessary to prevent
that Subsidiary Guarantee from constituting a fraudulent conveyance under
applicable law. See "Risk Factors -- Fraudulent Transfer Risks: Under Certain
Circumstances, a Court Could Cancel Our Obligations Under the Notes or the
Subsidiaries' Guarantees."
A Guarantor may not sell or otherwise dispose of all or substantially all
of its assets to, or consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person), another Person, other than the Company or
another Guarantor, unless:
(1) immediately after giving effect to that transaction, no Default or
Event of Default exists; and
(2) either:
(a) the Person acquiring the property in any such sale or disposition or
the Person formed by or surviving any such consolidation or merger
assumes all the obligations of that Guarantor under the Indenture,
its Subsidiary Guarantee and the Registration Rights Agreement
pursuant to a supplemental indenture satisfactory to the Trustee; or
(b) the Net Proceeds of such sale or other disposition are applied in
accordance with the "Asset Sale" provisions of the Indenture.
The Subsidiary Guarantee of a Guarantor will be released:
(1) in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way of
merger or consolidation) to a Person that is not (either before or
after giving effect to such transaction) a Subsidiary of the Company,
if the Guarantor applies the Net Proceeds of that sale or other
disposition in accordance with the "Asset Sale" provisions of the
Indenture;
(2) in connection with any sale of all of the Capital Stock of a Guarantor
to a Person that is not (either before or after giving effect to such
transaction) a Subsidiary of the Company, if the Company applies the
Net Proceeds of that sale in accordance with the "Asset Sale"
provisions of the Indenture; or
(3) if the Company properly designates any Restricted Subsidiary that is a
Guarantor as an Unrestricted Subsidiary.
See "-- Repurchase at the Option of Holders -- Asset Sales."
SUBORDINATION
The payment of principal, interest and premium, if any, on the Notes will
be subordinated in right of payment, as set forth in the Indenture, to the prior
payment in full of all Senior Debt of the Company, including Senior Debt
incurred after the date of the Indenture.
The holders of Senior Debt of the Company or the Guarantors, as applicable,
will be entitled to receive payment in full of all Obligations due in respect of
Senior Debt (including interest after the commencement of any bankruptcy
proceeding at the rate specified in the applicable Senior Debt) before the
Holders of Notes will be entitled to receive any payment with respect to the
Notes and until all Obligations with respect to such applicable Senior Debt are
paid in full, any distribution to which the Holders of Notes would be entitled
shall be made to the Holders of Senior Debt (except that Holders of Notes may
receive and retain Permitted Junior Securities and payments made from the trust
described under "-- Legal Defeasance and Covenant Defeasance"), in the event of
any distribution to creditors of the Company of the Company or the Guarantors,
as applicable:
(1) in a liquidation or dissolution of the Company or the Guarantors, as
applicable;
(2) in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or the Guarantors, as applicable or
its property;
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<PAGE> 55
(3) in an assignment for the benefit of creditors; or
(4) in any marshalling of the Company's assets and liabilities.
The Company also may not make any payment in respect of the Notes (except
in Permitted Junior Securities or from the trust described under "-- Legal
Defeasance and Covenant Defeasance") if:
(1) a payment default on Designated Senior Debt occurs and is continuing
beyond any applicable grace period; or
(2) any other default occurs and is continuing on any series of Designated
Senior Debt that permits holders of that series of Designated Senior
Debt to accelerate its maturity and the Trustee receives a notice of
such default (a "Payment Blockage Notice") from the Company or the
holders of any Designated Senior Debt.
Payments on the Notes may and shall be resumed:
(1) in the case of a payment default, upon the date on which such default
is cured or waived; and
(2) in case of any other default, the earlier of the date on which such
default is cured or waived or 179 days after the date on which the
applicable Payment Blockage Notice is received, unless the maturity of
any Designated Senior Debt has been accelerated and such acceleration
has not been rescinded or waived.
No new Payment Blockage Notice may be delivered unless and until:
(1) 360 days have elapsed since the delivery of the immediately prior
Payment Blockage Notice; and
(2) all scheduled payments of principal, interest and premium, if any, on
the Notes that have come due have been paid in full in cash.
No default (other than a payment default) that existed or was continuing on
the date of delivery of any Payment Blockage Notice to the Trustee shall be, or
be made, the basis for a subsequent Payment Blockage Notice.
If the Trustee or any Holder of the Notes receives a payment in respect of
the Notes (except in Permitted Junior Securities or from the trust described
under "-- Legal Defeasance and Covenant Defeasance") when:
(1) the payment is prohibited by these subordination provisions; and
(2) the Trustee or the Holder has actual knowledge that the payment is
prohibited;
the Trustee or the Holder, as the case may be, shall hold the payment in trust
for the benefit of the holders of Senior Debt. Upon the proper written request
of the holders of Senior Debt, the Trustee or the Holder, as the case may be,
shall deliver the amounts in trust to the holders of Senior Debt or their proper
representative.
The Company must promptly notify holders of Senior Debt if payment of the
Notes is accelerated because of an Event of Default.
As a result of the subordination provisions described above, in the event
of a bankruptcy, liquidation or reorganization of the Company or a Guarantor,
Holders of Notes may recover less ratably than creditors of the Company who are
holders of Senior Debt. See "Risk Factors -- The Notes and Guarantees Are
Unsecured Senior Subordinated Obligations."
OPTIONAL REDEMPTION
At any time prior to July 1, 2002, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes issued
under the Indenture at a redemption price of 111.875%
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<PAGE> 56
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the redemption date, with the net cash proceeds of one or more Public Equity
Offerings; provided that:
(1) at least 65% of the aggregate principal amount of Notes (including any
Additional Notes) issued under the Indenture remains outstanding
immediately after the occurrence of such redemption (excluding Notes
held by the Company and its Subsidiaries); and
(2) the redemption must occur within 90 days of the date of the closing of
such Public Equity Offering.
Except pursuant to the preceding paragraph, the Notes will not be
redeemable at the Company's option prior to July 1, 2004.
After July 1, 2004, the Company may redeem all or a part of the Notes upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest, if any, thereon, to the applicable redemption date, if redeemed
during the twelve-month period beginning on July 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2004........................................................ 105.9375%
2005........................................................ 103.9583%
2006........................................................ 101.9792%
2007 and thereafter......................................... 100.0000%
</TABLE>
MANDATORY REDEMPTION
The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
REPURCHASE AT THE OPTION OF HOLDERS
Change of Control
If a Change of Control occurs, each Holder of Notes will have the right to
require the Company to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of that Holder's Notes pursuant to a Change of
Control Offer on the terms set forth in the Indenture. In the Change of Control
Offer, the Company will offer a Change of Control Payment in cash equal to 101%
of the aggregate principal amount of Notes repurchased plus accrued and unpaid
interest, if any, thereon, to the date of repurchase. Within 30 days following
any Change of Control, the Company will mail a notice to each Holder describing
the transaction or transactions that constitute the Change of Control, which
offers to repurchase Notes on the Change of Control Payment Date specified in
such notice, which date shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed, pursuant to the procedures required by
the Indenture and described in such notice. The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control provisions of the Indenture, the
Company and its Restricted Subsidiaries will comply with the applicable
securities laws and regulations and will not be deemed to have breached their
respective obligations under the Change of Control provisions of the Indenture
by virtue of such conflict.
On the Change of Control Payment Date, the Company will, to the extent
lawful:
(1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Notes or portions thereof so tendered; and
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<PAGE> 57
(3) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officers' Certificate stating the aggregate principal
amount of Notes or portions thereof being repurchased by the Company.
The Paying Agent will promptly mail to each Holder of Notes so tendered the
Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unrepurchased portion of the Notes
surrendered, if any; provided that each such Note will be in a principal amount
of $1,000 or an integral multiple thereof.
Prior to complying with any of the provisions of the "Change of Control"
covenant, but in any event within 90 days following a Change of Control, the
Company will either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt to
permit the repurchase of Notes required by the Change of Control covenant. The
Company will publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment Date.
The provisions described above that require the Company to make a Change of
Control Offer following a Change of Control will be applicable regardless of
whether any other provisions of the Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the Holders of the Notes to require that the
Company repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the Company and
repurchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
The definition of Change of Control includes a phrase relating to the
direct or indirect sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole. Although there is a limited body of
case law interpreting the phrase "substantially all," there is no precise
established definition of the phrase under applicable law. Accordingly, the
ability of a Holder of Notes to require the Company to repurchase such Notes as
a result of a sale, lease, transfer, conveyance or other disposition of less
than all of the assets of the Company and its Restricted Subsidiaries taken as a
whole to another Person or group may be uncertain.
Asset Sales
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(2) such fair market value is determined by the Company's Board of
Directors and evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee; and
(3) at least 75% of the consideration therefor received by the Company or
such Restricted Subsidiary is in the form of cash or Cash Equivalents.
For purposes of this provision, each of the following shall be deemed
to be cash:
(a) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any
Subsidiary Guarantee) that are assumed by the transferee of any such
assets pursuant to a customary
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novation agreement that releases the Company or such Restricted
Subsidiary from further liability; and
(b) any securities, notes or other obligations received by the Company
or any such Restricted Subsidiary from such transferee that are
contemporaneously (subject to ordinary settlement periods) converted
by the Company or such Restricted Subsidiary into cash (to the
extent of the cash received in that conversion).
(1) to repay Senior Debt and, if the Senior Debt repaid is revolving credit
Indebtedness, to correspondingly reduce commitments with respect
thereto;
(2) to acquire all or substantially all of the assets of, or a majority of
the Voting Stock of, another Permitted Business;
(3) to make capital expenditures; and/or
(4) to acquire other long-term assets that are used or useful in a
Permitted Business.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $5.0 million,
the Company will make an Asset Sale Offer to all Holders of Notes and all
holders of other Indebtedness that is pari passu with the Notes (including any
Additional Notes) containing provisions similar to those set forth in the
Indenture with respect to offers to repurchase or redeem with the proceeds of
sales of assets to repurchase the maximum principal amount of Notes (including
any Additional Notes) and such other pari passu Indebtedness that may be
repurchased out of the Excess Proceeds. The offer price in any Asset Sale Offer
will be equal to 100% of principal amount plus accrued and unpaid interest, if
any, to the date of repurchase, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
such Excess Proceeds for any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount of Notes (including any Additional Notes) and
such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds
the amount of Excess Proceeds, the Trustee shall select the Notes (including any
Additional Notes) and such other pari passu Indebtedness to be repurchased on a
pro rata basis based on the principal amount of Notes and such other pari passu
Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of the Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of the Indenture by virtue of such
conflict.
The agreements governing the Company's and the Guarantor's outstanding
Senior Debt currently prohibit the Company from purchasing any Notes, and also
provide that certain change of control or asset sale events with respect to the
Company would constitute a default under these agreements. Any future credit
agreements or other agreements relating to Senior Debt to which the Company
becomes a party may contain similar restrictions and provisions. In the event a
Change of Control or Asset Sale occurs at a time when the Company is prohibited
from purchasing Notes, the Company could seek the consent of its senior lenders
to the repurchase of Notes or could attempt to refinance the borrowings that
contain such prohibition. If the Company does not obtain such a consent or repay
such borrowings, the Company will remain prohibited from purchasing Notes. In
such case, the Company's failure to repurchase tendered Notes would constitute
an Event of Default under the Indenture which would, in turn, constitute a
default under such Senior Debt. In such circumstances, the subordination
provisions in the Indenture would likely restrict payments to the Holders of
Notes.
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SELECTION AND NOTICE
If less than all of the Notes are to be redeemed at any time, the Trustee
will select Notes for redemption as follows:
(1) if the Notes are listed, in compliance with the requirements of the
principal national securities exchange on which the Notes are listed;
or
(2) if the Notes are not so listed, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate.
No Notes of $1,000 or less shall be redeemed in part. Notices of redemption
shall be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each Holder of Notes to be redeemed at its registered
address. Notices of redemption may not be conditional.
If any Note is to be redeemed in part only, the notice of redemption that
relates to that Note shall state the portion of the principal amount thereof to
be redeemed. A new Note in principal amount equal to the unredeemed portion of
the original Note will be issued in the name of the Holder thereof upon
cancellation of the original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest ceases to
accrue on Notes or portions of them called for redemption.
CERTAIN COVENANTS
Restricted Payments
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution
on account of the Company's or any of its Restricted Subsidiaries'
Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving the Company or
any of its Restricted Subsidiaries) or to the direct or indirect
holders of the Company's or any of its Restricted Subsidiaries' Equity
Interests in their capacity as such (other than dividends or
distributions payable in Equity Interests (other than Disqualified
Stock) of the Company or payable to the Company or a Restricted
Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any
direct or indirect parent of the Company (other than any such Equity
Interests owned by the Company or any Restricted Subsidiary of the
Company);
(3) make any payment on or with respect to, or repurchase, redeem, defease
or otherwise acquire or retire for value any Indebtedness that is
subordinated in right of payment to the Notes or the Subsidiary
Guarantees, except a payment of interest or principal at the Stated
Maturity thereof; or
(4) make any Restricted Investment (all such payments and other actions set
forth in clauses (1) through (4) above being collectively referred to
as "Restricted Payments"),
unless, at the time of and immediately after giving effect to such
Restricted Payment:
(1) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof; and
(2) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of the covenant described below under the caption
"-- Incurrence of Indebtedness and Issuance of Preferred Stock"; and
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(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of the Indenture (excluding Restricted
Payments permitted by clauses (2), (3) and (4) of the next succeeding
paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the first
fiscal quarter commencing after the date of the Indenture to the end
of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such
period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company
after the date of the Indenture as a contribution to its common
equity capital or from the issue or sale of Equity Interests of the
Company (other than Disqualified Stock) or after the date of the
Indenture from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt securities of
the Company that have been converted into or exchanged for such
Equity Interests (other than Equity Interests (or Disqualified Stock
or debt securities) sold to a Subsidiary of the Company), plus
(c) 50% of any cash dividends or other cash distributions received by
the Company or a Restricted Subsidiary after the Issue Date from an
Unrestricted Subsidiary, plus
(d) to the extent that any Restricted Investment that was made after the
date of the Indenture is sold for cash or Cash Equivalents or
otherwise liquidated or repaid for cash or Cash Equivalents, the
lesser of (i) the cash return of capital with respect to such
Restricted Investment (less the cost of disposition, if any) and
(ii) the initial amount of such Restricted Investment, plus
(e) $10.0 million.
So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would
have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition
of any subordinated Indebtedness of the Company or any Guarantor or of
any Equity Interests of the Company in exchange for, or out of the net
cash proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of, Equity Interests of the Company (other
than Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from
clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company or any Guarantor with the net
cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of the Company
to the holders of its common Equity Interests on a pro rata basis;
(5) the repurchase, redemption, cancellation or other acquisition or
retirement for value of any Equity Interests of the Company or any
Restricted Subsidiary of the Company held by any member of the
Company's (or any of its Restricted Subsidiaries') management,
employees or directors pursuant to (i) any management, employee or
director equity subscription agreement or stock option agreement or
(ii) upon the death, disability or termination of employment of such
members of management, employees or directors; provided that the
aggregate price paid for all
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such purchased, redeemed, acquired or retired Equity Interests shall
not exceed $1,000,000 in any twelve-month period; and
(6) other Restricted Payments in an aggregate amount not to exceed $5.0
million since the date of the Indenture.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued to or by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
covenant shall be determined by the Board of Directors whose resolution with
respect thereto shall be delivered to the Trustee. The Board of Directors'
determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $5.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this "Restricted Payments"
covenant were computed, together with a copy of any fairness opinion or
appraisal required by the Indenture.
Incurrence of Indebtedness and Issuance of Preferred Stock
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Stock and will not permit
any of its Restricted Subsidiaries to issue any shares of preferred stock;
provided, however, that the Company may incur Indebtedness (including Acquired
Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness
(including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage
Ratio for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified Stock or
preferred stock is issued or incurred would have been at least 2.0 to 1,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or the
preferred stock or Disqualified Stock had been issued, as the case may be, at
the beginning of such four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company and any Guarantor of additional term
Indebtedness under Credit Facilities in an aggregate principal amount
at any one time outstanding under this clause (1) not to exceed $90.0
million less the aggregate amount of all repayments, optional or
mandatory, of the principal of any term Indebtedness under Credit
Facilities (other than repayments that are concurrently reborrowed)
that have actually been made since the date of the Indenture;
(2) the incurrence by the Company and any Guarantor of additional
revolving credit Indebtedness and letters of credit under Credit
Facilities in an aggregate principal amount at any one time
outstanding under this clause (2)(with letters of credit being deemed
to have a principal amount equal to the maximum potential liability of
the Company and its Restricted Subsidiaries thereunder) not to exceed
the greater of (a) $35.0 million less the aggregate amount of all Net
Proceeds of Asset Sales applied by the Company or any of its
Restricted Subsidiaries to repay any revolving credit Indebtedness
under Credit Facilities and effect a corresponding commitment
reduction thereunder pursuant to the covenant described above under
the caption "-- Repurchase at the Option of Holders -- Asset Sales" or
(b) the Borrowing Base;
(3) the incurrence by the Company or its Restricted Subsidiaries of the
Existing Indebtedness;
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(4) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes (other than the Additional Notes) and the
related Subsidiary Guarantees to be issued on the date of the
Indenture and the Exchange Notes and the related Subsidiary Guarantees
to be issued pursuant to the Registration Rights Agreement;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage
financings or repurchase money obligations, in each case, incurred for
the purpose of financing all or any part of the repurchase price or
cost of construction or improvement of property, plant or equipment
used in the business of the Company or such Restricted Subsidiary, in
an aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (5), not to exceed $10.0 million at
any time outstanding;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted
by the Indenture to be incurred under the first paragraph of this
covenant or clauses (3), (4), (5), (6), (11) or (12) of this
paragraph;
(7) the incurrence by the Company or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the Company and any of its
Wholly Owned Restricted Subsidiaries or between or among any Wholly
Owned Restricted Subsidiaries; provided, however, that:
(a) if the Company or any Guarantor is the obligor on such Indebtedness,
such Indebtedness must be expressly subordinated to the prior
payment in full in cash of all Obligations with respect to the
Notes, in the case of the Company, or the Subsidiary Guarantee, in
the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness being held by a Person other than
the Company or a Restricted Subsidiary thereof and (ii) any sale or
other transfer of any such Indebtedness to a Person that is not
either the Company or a Wholly Owned Restricted Subsidiary thereof;
shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the
case may be, that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or
hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding;
(9) the guarantee by the Company or any of the Guarantors of Indebtedness
of the Company or a Restricted Subsidiary of the Company that was
permitted to be incurred by another provision of this covenant;
(10) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the
form of additional Indebtedness with the same terms, and the payment
of dividends on Disqualified Stock in the form of additional shares of
the same class of Disqualified Stock will not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Stock for
purposes of this covenant; provided, in each such case, that the
amount thereof is included in Fixed Charges of the Company as accrued;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (11), not to exceed
$30.0 million; and
(12) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted
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Subsidiary, such event shall be deemed to constitute an incurrence of
Indebtedness by a Restricted Subsidiary of the Company that was not
permitted by this clause (12).
For purposes of determining compliance with this "Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant, in the event that an
item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (12) above, or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company will be permitted to classify such item of Indebtedness on the date of
its incurrence, or later reclassify all or a portion of such item of
Indebtedness, in any manner that complies with this covenant. Indebtedness under
Credit Facilities outstanding on the date on which Notes are first issued and
authenticated under the Indenture shall be deemed to have been incurred on such
date in reliance on the exception provided by clauses (1) and (2) of the
definition of Permitted Debt.
No Senior Subordinated Debt
The Company will not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to Indebtedness of the Company and senior in any respect in right of
payment to the Notes. No Guarantor will incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Indebtedness of such Guarantor and senior in any respect
in right of payment to such Guarantor's Subsidiary Guarantee.
Liens
The Company will not, and will not permit any of its Subsidiaries to,
create, incur, assume or otherwise cause or suffer to exist or become effective
any Lien of any kind (other than Permitted Liens) upon any of their property or
assets, now owned or hereafter acquired, unless all payments due under the
Indenture and the New Notes are secured on an equal and ratable basis with the
obligations so secured until such time as such obligations are no longer secured
by a Lien.
Dividend and Other Payment Restrictions Affecting Subsidiaries
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock to
the Company or any of its Restricted Subsidiaries, or with respect to
any other interest or participation in, or measured by, its profits,
or pay any indebtedness owed to the Company or any of its Restricted
Subsidiaries;
(2) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the date of the Indenture and
any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof,
provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacement or refinancings are
not materially more restrictive, taken as a whole, with respect to
such dividend and other payment restrictions than those contained in
such Existing Indebtedness, as in effect on the date of the Indenture;
(2) the Indenture, the Notes and the Subsidiary Guarantees;
(3) applicable law;
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(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of
such acquisition), which encumbrance or restriction is not applicable
to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired,
provided that, in the case of Indebtedness, such Indebtedness was
permitted by the terms of the Indenture to be incurred;
(5) customary non-assignment provisions in leases, licenses and similar
agreements entered into in the ordinary course of business and
consistent with past practices;
(6) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on the property so
acquired of the nature described in clause (3) of the preceding
paragraph;
(7) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary
pending its sale or other disposition;
(8) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are not materially more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness
being refinanced;
(9) Liens securing Indebtedness that limit the right of the Company or any
of its Restricted Subsidiaries to dispose of the assets subject to
such Lien;
(10) provisions with respect to the disposition or distribution of assets
or property in joint venture agreements, assets sale agreements, stock
sale agreements and other similar agreements entered into in the
ordinary course of business; and
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business.
Merger, Consolidation or Sale of Assets
The Company may not, directly or indirectly: (1) consolidate or merge with
or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person; unless:
(1) either: (a) the Company is the surviving corporation; or (b) the Person
formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, conveyance or
other disposition shall have been made is a corporation organized or
existing under the laws of the United States, any state thereof or the
District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger (if
other than the Company) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes
all the obligations of the Company under the Notes, the Indenture and
the Registration Rights Agreement pursuant to a supplemental indenture
reasonably satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of Default
exists; and
(4) the Company or the Person formed by or surviving any such consolidation
or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been
made:
(a) will have Consolidated Net Worth immediately after the transaction
equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction; and
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(b) will, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of the covenant described above under the caption
"-- Incurrence of Indebtedness and Issuance of Preferred Stock."
In addition, the Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This "Merger, Consolidation or Sale of
Assets" covenant will not apply to a sale, assignment, transfer, conveyance or
other disposition of assets between or among the Company and any of its Wholly
Owned Restricted Subsidiaries.
Upon the occurrence of any transaction described above in which the Company
is not the continuing corporation, the successor corporation formed by such a
consolidation or into which the Company is merged or to which such transfer is
made will succeed to, and be substituted for, and may exercise every right and
power of, the Company under the Indenture and the Notes with the same effect as
if such successor corporation had been named as the Company therein.
Transactions with Affiliates
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess
of $1.0 million, a resolution of the Board of Directors set forth in
an Officers' Certificate certifying that such Affiliate Transaction
or series of Affiliate Transactions complies with this covenant and
that such Affiliate Transaction has been approved by a majority of
the disinterested members of the Board of Directors; and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess
of $5.0 million, an opinion as to the fairness to the Holders of
such Affiliate Transaction from a financial point of view issued by
an accounting, appraisal or investment banking firm of national
standing.
The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraph:
(1) any employment agreement entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Restricted
Subsidiary;
(2) transactions between or among the Company and/or its Restricted
Subsidiaries;
(3) payment of reasonable directors fees to Persons who are not otherwise
Affiliates of the Company;
(4) sales of Equity Interests (other than Disqualified Stock) to Affiliates
of the Company;
(5) so long as no Default or Event of Default has occurred and is
continuing, the payment of customary management fees and expenses
pursuant to the management agreement between Fremont Partners L.L.C.
and the Company, as amended from time to time, and transaction fees and
related expenses to the Principal or its Affiliates consistent with
past practices, including,
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without limitation, in connection with acquisitions, divestitures,
investments or financings by the Company or any of its Restricted
Subsidiaries; provided that the amount of management fees payable under
such management agreement will not exceed $325,000 during any
twelve-month period, which amount may be reasonably increased to
reflect a material increase in the size of the Company as a result of
an acquisition;
(6) Restricted Payments that are permitted by the provisions of the
Indenture described above under the caption "-- Restricted Payments;"
and
(7) maintenance in the ordinary course of business of benefit programs or
loan arrangements for employees, officers or directors of the Company
or any Restricted Subsidiary, including vacation plans, health and life
insurance plans, deferred compensation plans and retirement or savings
plans and similar plans.
Additional Subsidiary Guarantees
If the Company or any of its Subsidiaries acquires or creates another
Domestic Subsidiary after the date of the Indenture, then that newly acquired or
created Domestic Subsidiary must become a Guarantor and execute a supplemental
indenture and deliver an Opinion of Counsel to the Trustee within 10 Business
Days of the date on which it was acquired or created; provided that a Domestic
Subsidiary with assets with a fair market value of less than $1,000 shall not be
required to become a Subsidiary Guarantor and execute such a supplemental
indenture until such time as it shall have assets with a fair market value of at
least $1,000. This requirement shall not apply to any Subsidiaries that have
properly been designated as Unrestricted Subsidiaries in accordance with the
Indenture for so long as they continue to constitute Unrestricted Subsidiaries.
If any Subsidiary that is not a Guarantor at any time Guarantees Indebtedness of
the Company or a Guarantor, the Company will cause such Subsidiary to
simultaneously execute and deliver a supplemental Indenture providing for the
Guarantee of the payment of the Notes by such Subsidiary.
Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary so designated will be deemed to be an
Investment made as of the time of such designation and will either reduce the
amount available for Restricted Payments under the first paragraph of the
covenant described above under the caption "-- Restricted Payments" or reduce
the amount available for future Investments under one or more clauses of the
definition of Permitted Investments, as the Company shall determine. That
designation will only be permitted if such Investment would be permitted at that
time and if such Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a
Default.
Limitation on Issuances and Sales of Equity Interests in Wholly Owned
Subsidiaries
The Company will not, and will not permit any of its Restricted
Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any
Equity Interests in any Wholly Owned Restricted Subsidiary of the Company to any
Person (other than the Company or a Wholly Owned Restricted Subsidiary of the
Company), unless:
(1) such transfer, conveyance, sale, lease or other disposition is of all
the Equity Interests in such Wholly Owned Restricted Subsidiary; and
(2) the cash Net Proceeds from such transfer, conveyance, sale, lease or
other disposition are applied in accordance with the covenant described
above under the caption "-- Repurchase at the Option of
Holders -- Asset Sales."
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In addition, the Company will not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any of its Equity Interests (other than, if
necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person other than to the Company or a Wholly Owned Restricted
Subsidiary of the Company.
Business Activities
The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Company and its Restricted Subsidiaries taken as a
whole.
Payments for Consent
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of the Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Reports
Whether or not required by the Commission, so long as any Notes are
outstanding, the Company will furnish to the Holders of Notes, within the time
periods specified in the Commission's rules and regulations:
(1) all quarterly and annual financial information that would be required
to be contained in a filing with the Commission on Forms 10-Q and 10-K
if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information
only, a report on the annual financial statements by the Company's
certified independent accountants; and
(2) all current reports that would be required to be filed with the
Commission on Form 8-K if the Company were required to file such
reports.
If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph shall include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
In addition, following the consummation of the exchange offer contemplated
by the Registration Rights Agreement, whether or not required by the Commission,
the Company will file a copy of all of the information and reports referred to
in clauses (1) and (2) above with the Commission for public availability within
the time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, the
Company and the Subsidiary Guarantors have agreed that, for so long as any Notes
remain outstanding, they will furnish to the Holders and to securities analysts
and prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144(d)(4) under the Securities Act.
EVENTS OF DEFAULT AND REMEDIES
Each of the following is an Event of Default:
(1) default for 30 days in the payment when due of interest on the Notes
whether or not prohibited by the subordination provisions of the
Indenture;
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(2) default in payment when due of the principal of, or premium, if any, on
the Notes whether or not prohibited by the subordination provisions of
the Indenture;
(3) failure by the Company or any of its Restricted Subsidiaries to comply
with the provisions described under the captions "-- Repurchase at the
Option of Holders -- Change of Control," or "-- Repurchase at the
Option of Holders -- Asset Sales," or "-- Certain Covenants -- Merger,
Consolidation or Sale of Assets;"
(4) failure by the Company or any of its Restricted Subsidiaries for 60
days after notice to comply with any of the other agreements in the
Indenture;
(5) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date of the Indenture, if
that default:
(a) is caused by a failure to pay principal of, or interest or premium,
if any, on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a
"Payment Default"); or
(b) results in the acceleration of such Indebtedness prior to its
express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $7.5 million or more;
(6) failure by the Company or any of its Restricted Subsidiaries to pay
final judgments aggregating in excess of $7.5 million, which judgments
are not paid, discharged or stayed for a period of 60 days;
(7) except as permitted by the Indenture, any Subsidiary Guarantee shall be
held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Guarantor,
or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Subsidiary Guarantee; and
(8) certain events of bankruptcy or insolvency with respect to the Company
or any of its Significant Restricted Subsidiaries.
In the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company or any Significant
Restricted Subsidiary, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately.
Holders of the Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest.
The Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes.
In the case of any Event of Default occurring by reason of any willful
action or inaction taken or not taken by or on behalf of the Company with the
intention of avoiding payment of the premium that the
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Company would have had to pay if the Company then had elected to redeem the
Notes pursuant to the optional redemption provisions of the Indenture, an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law upon the acceleration of the Notes. If an Event of
Default occurs prior July 1, 2004, by reason of any willful action (or inaction)
taken (or not taken) by or on behalf of the Company with the intention of
avoiding the prohibition on redemption of the Notes prior to July 1, 2004, then
the premium specified in the Indenture shall also become immediately due and
payable to the extent permitted by law upon the acceleration of the Notes.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture. Upon becoming aware of any Default or
Event of Default, the Company is required to deliver to the Trustee a statement
specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No past, present or future director, officer, employee, incorporator,
affiliate, or stockholder of the Company or any Guarantor, as such, shall have
any liability for any obligations of the Company or the Guarantors under the
Notes, the Indenture or the Subsidiary Guarantees, or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. The waiver may
not be effective to waive liabilities under the federal securities laws.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Notes and all obligations
of the Guarantors discharged with respect to their Subsidiary Guarantees ("Legal
Defeasance") except for:
(1) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, or interest, premium, if any, outstanding
on such Notes when such payments are due from the trust referred to
below;
(2) the Company's obligations with respect to the Notes concerning issuing
temporary Notes, registration of Notes, mutilated, destroyed, lost or
stolen Notes and the maintenance of an office or agency for payment and
money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee, and
the Company's and the Guarantor's obligations in connection therewith;
and
(4) the Legal Defeasance provisions of the Indenture.
In addition, the Company may, at its option and at any time, elect to have
the obligations of the Company and any Guarantor released with respect to
certain covenants that are described in the Indenture ("Covenant Defeasance")
and thereafter any omission to comply with those covenants shall not constitute
a Default or Event of Default with respect to the Notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "Events of
Default" will no longer constitute an Event of Default with respect to the Notes
and the Subsidiary Guarantees will be released.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the Company must irrevocably deposit or cause to be deposited with the
Trustee, in trust, for the benefit of the Holders of the Notes, cash in
U.S. dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay
the principal of, or interest or premium, if any, on the outstanding
Notes on the stated maturity or on the applicable redemption date, as
the case may be, and the Company must specify whether the Notes are
being defeased to maturity or to a particular redemption date;
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(2) in the case of Legal Defeasance, the Company shall have delivered to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that (a) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since the
date of the Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(3) in the case of Covenant Defeasance, the Company shall have delivered to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be continuing
either: (a) on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit); or (b) or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on
the 91st day after the date of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than the Indenture) to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(6) the Company must have delivered to the Trustee an Opinion of Counsel to
the effect that, assuming no intervening bankruptcy of the Company or
any Guarantor between the date of deposit and the 91st day following
the deposit and assuming that no Holder is an "insider" of the Company
under applicable bankruptcy law, after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(7) the Company must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders of Notes over the other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and
(8) the Company must deliver to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating
to the Legal Defeasance or the Covenant Defeasance have been complied
with.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next three succeeding paragraphs, the Indenture
or the Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Notes (including any Additional
Notes) then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes),
and any existing default or noncompliance with any provision of the Indenture,
the Notes and the Subsidiary Guarantees may be waived with the consent of the
Holders of a majority in principal amount of the then-outstanding Notes
(including any Additional Notes) (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes).
Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting Holder):
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(1) reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note or
alter the provisions with respect to the redemption of the Notes at the
option of the Company (other than provisions relating to the covenants
described above under the caption "-- Repurchase at the Option of
Holders");
(3) reduce the rate of or change the time for payment of interest on any
Note;
(4) waive a Default or Event of Default in the payment of principal of, or
interest or premium, if any, on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the Notes and a waiver of the payment
default that resulted from such acceleration);
(5) make any Note payable in money other than that stated in the Notes;
(6) make any change in the provisions of the Indenture relating to waivers
of past Defaults or Events of Default or the rights of Holders of Notes
to receive payments of principal of, or interest or premium, if any, on
the Notes;
(7) waive a redemption payment with respect to any Note (other than a
payment required by one of the covenants described above under the
caption "-- Repurchase at the Option of Holders");
(8) release any Guarantor from any of its obligations under its Subsidiary
Guarantee or the Indenture, except in accordance with the terms of the
Indenture; or
(9) make any change in the preceding amendment and waiver provisions.
In addition, any amendment to, or waiver of, the provisions of the
Indenture relating to subordination that adversely affects the rights of the
Holders of the Notes will require the consent of the Holders of at least 75% in
aggregate principal amount of Notes then outstanding.
Notwithstanding the preceding, without the consent of any Holder of Notes,
the Company, the Guarantors and the Trustee may amend or supplement the
Indenture, the Notes or the Subsidiary Guarantees:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of Notes in the case of a merger or
consolidation or sale of all or substantially all of the Company's
assets;
(4) to provide for the issuance of Additional Notes in accordance with the
limitations set forth in the Indenture on the Issue Date;
(5) to make any change that would provide any additional rights or benefits
to the Holders of Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder; or
(6) to comply with requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the Trust Indenture
Act.
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SATISFACTION AND DISCHARGE
The Indenture will be discharged and will cease to be of further effect as
to all Notes issued thereunder, when:
(1) either:
(a) all Notes that have been authenticated (except lost, stolen or
destroyed Notes that have been replaced or paid and Notes for whose
payment money has theretofore been deposited in trust and thereafter
repaid to the Company) have been delivered to the Trustee for
cancellation; or
(b) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the making of
a notice of redemption or otherwise or will become due and payable
within one year and the Company or any Guarantor has irrevocably
deposited or caused to be deposited with the Trustee as trust funds
in trust solely for the benefit of the Holders, cash in U.S.
dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient without consideration
of any reinvestment of interest, to pay and discharge the entire
indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium, if any, and accrued interest to
the date of maturity or redemption;
(2) no Default or Event of Default shall have occurred and be continuing on
the date of such deposit or shall occur as a result of such deposit and
such deposit will not result in a breach or violation of, or constitute
a default under, any other instrument to which the Company or any
Guarantor is a party or by which the Company or any Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to be paid all sums
payable by it under the Indenture; and
(4) the Company has delivered irrevocable instructions to the Trustee under
the Indenture to apply the deposited money toward the payment of the
Notes at maturity or the redemption date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
CONCERNING THE TRUSTEE
If the Trustee becomes a creditor of the Company or any Guarantor, the
Indenture and the provisions of the Trust Indenture Act limit its right to
obtain payment of claims in certain cases, or to realize on certain property
received in respect of any such claim as security or otherwise. The Trustee will
be permitted to engage in other transactions; however, if it acquires any
conflicting interest it must eliminate such conflict within 90 days, apply to
the Commission for permission to continue or resign.
The Holders of a majority in aggregate principal amount of the
then-outstanding Notes (including Additional Notes) will have the right to
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee, subject to certain exceptions. The
Indenture provides that in case an Event of Default shall occur and be
continuing, the Trustee will be required, in the exercise of its power, to use
the degree of care of a prudent man in the conduct of his own affairs. Subject
to such provisions, the Trustee will be under no obligation to exercise any of
its rights or powers under the Indenture at the request of any Holder of Notes,
unless such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense.
ADDITIONAL INFORMATION
Anyone who receives this prospectus may obtain a copy of the Indenture and
Registration Rights Agreement without charge by writing to Juno Lighting, Inc.,
1300 South Wolf Road, Des Plaines, Illinois 60018, Attn: George Bilek.
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BOOK-ENTRY, DELIVERY AND FORM
The Notes initially will be or are represented by one or more Notes in
registered, global form without interest coupons (collectively, the "Global
Notes"). The Global Notes will be or have been deposited upon issuance with the
Trustee as custodian for The Depository Trust Company ("DTC"), in New York, New
York, and registered in the name of DTC or its nominee, in each case for credit
to an account of a direct or indirect participant in DTC as described below.
Except as set forth below, the Global Notes may be transferred, in whole
and not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Notes may not be exchanged for Notes
in certificated form except in the limited circumstances described below. See
"-- Exchange of Global Notes for Certificated Notes." Except in the limited
circumstances described below, owners of beneficial interests in the Global
Notes will not be entitled to receive physical delivery of Notes in certificated
form.
Initially, the Trustee will act as Paying Agent and Registrar. The Notes
may be presented for registration of transfer and exchange at the offices of the
Registrar.
DEPOSITORY PROCEDURES
The following description of the operations and procedures of DTC are
provided solely as a matter of convenience. These operations and procedures are
solely within the control of the respective settlement systems and are subject
to changes by them. The Company takes no responsibility for these operations and
procedures and urges investors to contact the system or their participants
directly to discuss these matters.
DTC has advised the Company that DTC is a limited-purpose trust company
created to hold securities for its participating organizations (collectively,
the "Participants") and to facilitate the clearance and settlement of
transactions in those securities between Participants through electronic
book-entry changes in accounts of its Participants. The Participants include
securities brokers and dealers (including the Initial Purchasers), banks, trust
companies, clearing corporations and certain other organizations. Access to
DTC's system is also available to other entities such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own securities
held by or on behalf of DTC only through the Participants or the Indirect
Participants. The ownership interests in, and transfers of ownership interests
in, each security held by or on behalf of DTC are recorded on the records of the
Participants and Indirect Participants.
DTC has also advised the Company that, pursuant to procedures established
by it:
(1) upon deposit of the Global Notes, DTC will credit the accounts of
Participants designated by the Initial Purchasers with portions of the
principal amount of the Global Notes; and
(2) ownership of these interests in the Global Notes will be shown on, and
the transfer of ownership thereof will be effected only through,
records maintained by DTC (with respect to the Participants) or by the
Participants and the Indirect Participants (with respect to other
owners of beneficial interest in the Global Notes).
All ownership interests in a Global Note may be subject to the procedures
and requirements of DTC. The laws of some states require that certain Persons
take physical delivery in definitive form of securities that they own.
Consequently, the ability to transfer beneficial interests in a Global Note to
such Persons will be limited to that extent. Because DTC can act only on behalf
of Participants, which in turn act on behalf of Indirect Participants and
certain banks, the ability of a Person having beneficial interests in a Global
Note to pledge such interests to Persons that do not participate in the DTC
system, or otherwise take actions in respect of such interests, may be affected
by the lack of a physical certificate evidencing such interests.
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EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL NOTES WILL NOT
HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF
NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR
"HOLDERS" THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.
Payments in respect of the principal of, and interest, premium and
Liquidated Damages, if any, on a Global Note registered in the name of DTC or
its nominee will be payable to DTC in its capacity as the registered Holder
under the Indenture. Under the terms of the Indenture, the Company and the
Trustee will treat the Persons in whose names the Notes, including the Global
Notes, are registered as the owners thereof for the purpose of receiving
payments and for all other purposes. Consequently, neither the Company, the
Trustee nor any agent of the Company or the Trustee has or will have any
responsibility or liability for:
(1) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of
beneficial ownership interest in the Global Notes or for maintaining,
supervising or reviewing any of DTC's records or any Participant's or
Indirect Participant's records relating to the beneficial ownership
interests in the Global Notes; or
(2) any other matter relating to the actions and practices of DTC or any of
its Participants or Indirect Participants.
DTC has advised the Company that its current practice, upon receipt of any
payment in respect of securities such as the Notes (including principal and
interest), is to credit the accounts of the relevant Participants with the
payment on the payment date unless DTC has reason to believe it will not receive
payment on such payment date. Each relevant Participant is credited with an
amount proportionate to its beneficial ownership of an interest in the principal
amount of the relevant security as shown on the records of DTC. Payments by the
Participants and the Indirect Participants to the beneficial owners of Notes
will be governed by standing instructions and customary practices and will be
the responsibility of the Participants or the Indirect Participants and will not
be the responsibility of DTC, the Trustee or the Company. Neither the Company
nor the Trustee will be liable for any delay by DTC or any of its Participants
in identifying the beneficial owners of the Notes, and the Company and the
Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds, transfers between
Indirect Participants who hold an interest through a Participant will be
effected in accordance with the procedures of such Participant but generally
will settle in immediately available funds.
DTC has advised the Company that it will take any action permitted to be
taken by a Holder of Notes only at the direction of one or more Participants to
whose account DTC has credited the interests in the Global Notes and only in
respect of such portion of the aggregate principal amount of the Notes as to
which such Participant or Participants has or have given such direction.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the Global Notes among participants in DTC, they are under no
obligation to perform or to continue to perform such procedures, and may
discontinue such procedures at any time. Neither the Company nor the Trustee nor
any of their respective agents will have any responsibility for the performance
by DTC or their respective participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
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EXCHANGE OF GLOBAL NOTES FOR CERTIFICATED NOTES
A Global Note is exchangeable for definitive Notes in registered
certificated form ("Certificated Notes") if:
(1) DTC (a) notifies the Company that it is unwilling or unable to continue
as depositary for the Global Notes and the Company fails to appoint a
successor depositary or (b) has ceased to be a clearing agency
registered under the Exchange Act;
(2) the Company, at its option, notifies the Trustee in writing that it
elects to cause the issuance of the Certificated Notes; or
(3) there shall have occurred and be continuing a Default or Event of
Default with respect to the Notes.
In addition, beneficial interests in a Global Note may be exchanged for
Certificated Notes upon prior written notice given to the Trustee by or on
behalf of DTC in accordance with the Indenture. In all cases, Certificated Notes
delivered in exchange for any Global Note or beneficial interests in Global
Notes will be registered in the names, and issued in any approved denominations,
requested by or on behalf of the depositary (in accordance with its customary
procedures) and will bear the applicable restrictive legend referred to in
"Notice to Investors," unless that legend is not required by applicable law.
Neither the Company nor the Trustee will be liable for any delay by the
holder of the Global Note or DTC in identifying the beneficial owners of Notes,
and the Company and the Trustee may conclusively rely on and will be protected
in relying on instructions from Holders of the Global Note or DTC for all
purposes.
EXCHANGE OF CERTIFICATED NOTES FOR GLOBAL NOTES
Certificated Notes may not be exchanged for beneficial interests in any
Global Note unless the transferor first delivers to the Trustee a written
certificate (in the form provided in the Indenture) to the effect that such
transfer will comply with the appropriate transfer restrictions applicable to
such Notes.
SAME DAY SETTLEMENT AND PAYMENT
The Company will make payments in respect of the Notes represented by the
Global Notes (including principal, premium, if any, and interest, if any) by
wire transfer of immediately available funds to the accounts specified by the
Global Note Holder. The Company will make all payments of principal, interest
and premium, if any, with respect to Certificated Notes by wire transfer of
immediately available funds to the accounts specified by the Holders thereof or,
if no such account is specified, by mailing a check to each such Holder's
registered address. The Notes represented by the Global Notes are expected to be
eligible to trade in the PORTAL market and to trade in DTC's Same-Day Funds
Settlement System, and any permitted secondary market trading activity in such
Notes will, therefore, be required by DTC to be settled in immediately available
funds. The Company expects that secondary trading in any Certificated Notes will
also be settled in immediately available funds.
REGISTRATION RIGHTS; ADDITIONAL INTEREST
The following description is a summary of the material provisions of the
Registration Rights Agreement. It does not restate that agreement in its
entirety and is qualified by reference to all the provisions of the Registration
Rights Agreement, a copy of which is filed as an exhibit to the Registration
Statement of which this prospectus is a part.
The Company, the Guarantors and the Initial Purchasers entered into the
Registration Rights Agreement on the closing of the offering of the old Notes.
Pursuant to the Registration Rights Agreement, the Company and the Guarantors
agreed to file with the Commission the registration statement of which this
prospectus is a part (the "Exchange Offer Registration Statement"). Upon the
effectiveness of the Exchange Offer Registration Statement, the Company and the
Guarantors will offer to the Holders of
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Transfer Restricted Securities pursuant to the Exchange Offer who are able to
make certain representations the opportunity to exchange their Transfer
Restricted Securities for new Notes.
If:
(1) the Company and the Guarantors are not
(a) required to file the Exchange Offer Registration Statement; or
(b) permitted to consummate the Exchange Offer because the Exchange
Offer is not permitted by applicable law or Commission policy; or
(2) any Holder of Transfer Restricted Securities notifies the Company prior
to the 20th day following consummation of the Exchange Offer that:
(a) it is prohibited by law or Commission policy from participating in
the Exchange Offer; or
(b) that it may not resell the new Notes acquired by it in the Exchange
Offer to the public without delivering a prospectus and the
prospectus contained in the Exchange Offer Registration Statement is
not appropriate or available for such resales; or
(c) that it is a broker-dealer and owns old Notes acquired directly from
the Company or an affiliate of the Company,
the Company and the Guarantors will file with the Commission a Shelf
Registration Statement to cover resales of the old Notes by the Holders thereof
who satisfy certain conditions relating to the provision of information in
connection with the Shelf Registration Statement.
The Company and the Guarantors will use their reasonable best efforts to
cause the applicable registration statement to be declared effective as promptly
as possible by the Commission.
For purposes of the preceding, "Transfer Restricted Securities" means each
old Note until the earlier of:
(1) the date on which such old Note has been exchanged by a Person other
than a broker-dealer for a new Note in the Exchange Offer;
(2) following the exchange by a broker-dealer in the Exchange Offer of an
old Note for a new Note, the date on which such new Note is sold to a
purchaser who receives from such broker-dealer on or prior to the date
of such sale a copy of the prospectus contained in the Exchange Offer
Registration Statement;
(3) the date on which such old Note has been effectively registered under
the Securities Act and disposed of in accordance with the Shelf
Registration Statement; or
(4) the date on which such old Note is distributed to the public pursuant
to Rule 144 under the Securities Act.
The Registration Rights Agreement provides:
(1) the Company and the Guarantors will file an Exchange Offer Registration
Statement with the Commission on or prior to 60 days after the closing
of this offering;
(2) the Company and the Guarantors will use their reasonable best efforts
to have the Exchange Offer Registration Statement declared effective by
the Commission on or prior to 150 days after the closing of this
offering;
(3) unless the Exchange Offer would not be permitted by applicable law or
Commission policy, the Company and the Guarantors will
(a) commence the Exchange Offer; and
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(b) use their reasonable best efforts to issue on or prior to 30
business days, or longer, if required by the federal securities
laws, after the date on which the Exchange Offer Registration
Statement was declared effective by the Commission, new Notes in
exchange for all old Notes tendered prior thereto in the Exchange
Offer; and
(4) if obligated to file the Shelf Registration Statement, the Company and
the Guarantors will use their reasonable best efforts to file the Shelf
Registration Statement with the Commission on or prior to 60 days after
such filing obligation arises and to cause the Shelf Registration to be
declared effective by the Commission on or prior to 150 days after such
obligation arises.
If:
(1) the Company and the Guarantors fail to file any of the registration
statements required by the Registration Rights Agreement on or before
the date specified for such filing; or
(2) any of such registration statements is not declared effective by the
Commission on or prior to the date specified for such effectiveness
(the "Effectiveness Target Date"); or
(3) the Company and the Guarantors fail to consummate the Exchange Offer
within 30 business days of the Effectiveness Target Date with respect
to the Exchange Offer Registration Statement; or
(4) the Shelf Registration Statement or the Exchange Offer Registration
Statement is declared effective but thereafter ceases to be effective
or usable in connection with resales of Transfer Restricted Securities
during the periods specified in the Registration Rights Agreement (each
such event referred to in clauses (1) through (4) above, a
"Registration Default"),
then the Company will pay as liquidated damages for such Registration Default,
additional interest to each Holder of Notes ("Additional Interest"), which shall
accrue at a rate of 0.5% per annum during the first 90-day period immediately
following the occurrence of the first Registration Default.
The rate of accrual of Additional Interest will increase by an additional
0.5% per annum with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum rate of Additional
Interest of 2.0% per annum.
All accrued Additional Interest will be paid by the Company and the
Guarantors on each Interest Payment Date to the Global Note Holder by wire
transfer of immediately available funds or by federal funds check and to Holders
of Certificated Notes by wire transfer to the accounts specified by them or by
mailing checks to their registered addresses if no such accounts have been
specified. All references herein and in the Indenture to "interest" payable on
the old Notes shall be deemed to include any Additional Interest that may become
due and payable on the old Notes.
Following the cure of all Registration Defaults, the accrual of Additional
Interest will cease.
Holders of old Notes are required to make certain representations to the
Company (as described in the Registration Rights Agreement) in order to
participate in the Exchange Offer and are required to deliver certain
information to be used in connection with the Shelf Registration Statement and
to provide comments on the Shelf Registration Statement within the time periods
set forth in the Registration Rights Agreement in order to have their old Notes
included in the Shelf Registration Statement and benefit from the provisions
regarding Liquidated Damages set forth above. By acquiring Transfer Restricted
Securities, a Holder will be deemed to have agreed to indemnify the Company and
the Guarantors against certain losses arising out of information furnished by
such Holder in writing for inclusion in any Shelf Registration Statement.
Holders of old Notes are also be required to suspend their use of the prospectus
included in the Shelf Registration Statement under certain circumstances upon
receipt of written notice to that effect from the Company.
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CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person
is merged with or into or became a Subsidiary of such specified Person,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" shall have correlative meanings.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, (including, without limitation, by way of a sale and leaseback)
other than sales of inventory in the ordinary course of business
consistent with past practices; provided that the sale, conveyance or
other disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole will be
governed by the provisions of the Indenture described above under the
caption "-- Repurchase at the Option of Holders -- Change of Control"
and/or the provisions described above under the caption "-- Certain
Covenants -- Merger, Consolidation or Sale of Assets" and not by the
provisions of the Asset Sale covenant; and
(2) the issuance of Equity Interests in any of the Company's Restricted
Subsidiaries or the sale of Equity Interests in any of its
Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales:
(1) any single transaction or series of related transactions that involves
assets having a fair market value of less than $1.5 million;
(2) a transfer of assets between or among the Company and its Wholly Owned
Subsidiaries,
(3) an issuance of Equity Interests by a Wholly Owned Subsidiary to the
Company or to another Wholly Owned Subsidiary;
(4) the conveyance, transfer, assignment or other disposition of inventory
and other property in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents; and
(6) a Restricted Payment or Permitted Investment that is permitted by the
covenant described above under the caption "-- Certain
Covenants -- Restricted Payments."
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a
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subsequent condition. The terms "Beneficially Owns" and "Beneficially Owned"
shall have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the Board of Directors of the general
partner of the partnership; and
(3) with respect to any other Person, the board or committee of such Person
serving a similar function.
"Borrowing Base" means an amount equal to the sum of (i) 85% of the value
of accounts receivable (before giving effect to any related reserves) shown on
the Company's most recent consolidated balance sheet that are not more than 90
days past due in accordance with GAAP and (ii) 50% of the value of the inventory
shown on the Company's consolidated balance sheet in accordance with GAAP.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership
or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is
pledged in support thereof) having maturities of not more than one year
from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with maturities of
six months or less from the date of acquisition, bankers' acceptances
with maturities not exceeding six months and overnight bank deposits,
in each case, with any domestic commercial bank having capital and
surplus in excess of $500.0 million and a Thomson Bank Watch Rating of
"B" or better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having at least a P1 rating obtainable from Moody's
Investors Service, Inc. or an A1 rating obtained from Standard & Poor's
Rating Services and in each case maturing within 270 days after the
date of acquisition; and
(6) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition.
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"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole to any
"person" (as that term is used in Section 13(d)(3) of the Exchange Act)
other than the Principal or an Affiliate of the Principal;
(2) the adoption of a plan relating to the liquidation or dissolution of
the Company;
(3) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as
defined above), other than the Principal and its Affiliates, becomes
the Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of the Company, measured by voting power rather than
number of shares; or
(4) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss realized by
such Person or any of its Subsidiaries in connection with an Asset
Sale, to the extent such losses were deducted in computing such
Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and its
Subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus
(3) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred
in respect of letter of credit or bankers' acceptance financings, and
net of the effect of all payments made or received pursuant to Hedging
Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses
that were paid in a prior period) and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents
an accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period)
of such Person and its Restricted Subsidiaries for such period to the
extent that such depreciation, amortization and other non-cash expenses
were deducted in computing such Consolidated Net Income;
provided that such Consolidated Net Income shall be reduced by non-cash
items increasing such Consolidated Net Income for such period, other
than the accrual of revenue in the ordinary course of business, in each
case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash expenses
of, a Subsidiary of the Company shall be added to Consolidated Net Income to
compute Consolidated Cash Flow of the Company only to the extent that a
corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Subsidiary without prior governmental approval
(that has not been obtained), and without direct or indirect restriction
pursuant to the terms of its charter and all agreements, instruments,
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judgments, decrees, orders, statutes, rules and governmental regulations
applicable to that Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Wholly Owned
Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be excluded to the
extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not
at the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall
be excluded;
(4) the cumulative effect of a change in accounting principles shall be
excluded; and
(5) the Net Income (but not loss) of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to the specified Person or one of
its Subsidiaries.
"Consolidated Net Worth" means, with respect to any specified Person as of
any date, the sum of:
(1) the consolidated equity of the common stockholders of such Person and
its consolidated Subsidiaries as of such date; plus
(2) the respective amounts reported on such Person's balance sheet as of
such date with respect to any series of preferred stock (other than
Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of
net earnings in respect of the year of such declaration and payment,
but only to the extent of any cash received by such Person upon
issuance of such preferred stock;
less (x) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a
going-concern business made within 12 months after the acquisition of
such business) subsequent to the date of the Indenture in the book value
of any asset owned by such Person or Restricted Subsidiary of such
Person, (y) all investments as of such date in unconsolidated
Subsidiaries and in Persons that are not Subsidiaries (except, in each
case, Permitted Investments), and (z) all unamortized debt discount and
expense and unamortized deferred charges as of such date, all of the
foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of the Indenture;
or
(2) was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members
of such Board at the time of such nomination or election.
"Credit Agreement" means that certain Credit Agreement, to be entered into
by and among the Company and NationsBank, N.A., and Credit Suisse First Boston,
providing for two senior secured term loan facilities in an aggregate principal
amount of $90.0 million and up to $35.0 million of revolving credit borrowings,
including any related notes, guarantees, collateral documents, instruments and
agreements
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executed in connection therewith, and in each case as amended, modified,
renewed, refunded, replaced or refinanced from time to time.
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
term loans, capital leases, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in whole
or in part from time to time.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Designated Senior Debt" means:
(1) any Indebtedness outstanding under the Credit Agreement; and
(2) any other Senior Debt permitted under the Indenture the principal
amount of which is $15.0 million or more and that has been designated
by the Company as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Company may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with the covenant
described above under the caption "-- Certain Covenants -- Restricted Payments."
"Domestic Subsidiary" means any Restricted Subsidiary that was formed under
the laws of the United States or any state thereof or the District of Columbia
or that guarantees or otherwise provides direct credit support for any
Indebtedness of the Company.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock or an increase in the stated value of preferred
stock (but excluding any debt security that is convertible into, or exchangeable
for, Capital Stock).
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the date of the Indenture, until such amounts are repaid.
"Fixed Charges" means, with respect to any specified Person for any period,
the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of
credit or bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
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(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries, whether or not such Guarantee or Lien is called upon;
plus
(4) the product of (a) all dividends, whether paid or accrued and whether
or not in cash, on any series of preferred stock of such Person or any
of its Restricted Subsidiaries, other than dividends on Equity
Interests payable solely in Equity Interests of the Company (other than
Disqualified Stock) or to the Company or a Restricted Subsidiary of the
Company, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with
GAAP.
"Fixed Charge Coverage Ratio" means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the specified
Person or any of its Restricted Subsidiaries incurs, assumes, Guarantees,
repays, repurchases or redeems any Indebtedness (other than ordinary working
capital borrowings) or issues, repurchases or redeems preferred stock subsequent
to the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated and on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, Guarantee, repayment, repurchase or redemption
of Indebtedness, or such issuance, repurchase or redemption of preferred stock,
and the use of the proceeds therefrom as if the same had occurred at the
beginning of the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any of its
Restricted Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date shall be given pro forma effect
as if they had occurred on the first day of the four-quarter reference
period and Consolidated Cash Flow for such reference period shall be
calculated on a pro forma basis in accordance with Regulation S-X under
the Securities Act, but without giving effect to clause (3) of the
proviso set forth in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, but only
to the extent that the obligations giving rise to such Fixed Charges
will not be obligations of the specified Person or any of its
Restricted Subsidiaries following the Calculation Date.
"GAAP" means 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 have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
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"Guarantors" means each of:
(1) the Company's Domestic Subsidiaries; and
(2) any other subsidiary that executes a Subsidiary Guarantee in accordance
with the provisions of the Indenture;
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements;
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates; and
(3) currency hedging arrangements designed to protect such Person against
fluctuations in currency values.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any property,
except any such balance that constitutes an accrued expense or trade
payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness issued with
original issue discount; and
(2) the principal amount thereof, together with any interest thereon that
is more than 30 days past due, in the case of any other Indebtedness.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of direct or indirect loans (including Guarantees or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Subsidiary of the
Company such that, after giving effect to any such sale or disposition, such
Person is no longer a Restricted Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Equity
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Interests of such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of the covenant described above
under the caption "-- Certain Covenants -- Restricted Payments." The acquisition
by the Company or any Subsidiary of the Company of a Person that holds an
Investment in a third Person shall be deemed to be an Investment by the Company
or such Subsidiary in such third Person in an amount equal to the fair market
value of the Investment held by the acquired Person in such third Person in an
amount determined as provided in the final paragraph of the covenant described
above under the caption "-- Certain Covenants -- Restricted Payments."
"Issue Date" means the date of the first issuance of the Notes under the
Indenture.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes on such
gain or loss, realized in connection with: (a) any Asset Sale; or (b)
the disposition of any securities by such Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related provision for
taxes on such extraordinary gain or loss.
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in each
case, after taking into account any available tax credits or deductions and any
tax sharing arrangements, and amounts required to be applied to the repayment of
Indebtedness, other than Senior Debt secured by a Lien on the asset or assets
that were the subject of such Asset Sale and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (b) is
directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender;
(2) no default with respect to which (including any rights that the holders
thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder
of any other Indebtedness (other than the Notes) of the Company or any
of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that they will
not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
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"Permitted Business" means any business conducted or proposed to be
conducted (as described in the offering memorandum) by the Company and its
Restricted Subsidiaries on the date of the Indenture and other businesses
reasonably related or ancillary thereto.
"Permitted Investments" means:
(1) any Investment in the Company or in a Wholly Owned Restricted
Subsidiary of the Company;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of the
Company in a Person, if as a result of such Investment:
(a) such Person becomes a Wholly Owned Restricted Subsidiary of the
Company; or
(b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Wholly Owned Restricted Subsidiary
of the Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Asset Sales";
(5) any acquisition of assets solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company;
(6) Hedging Obligations; and
(7) other Investments in any Person having an aggregate fair market value
(measured on the date each such Investment was made and without giving
effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (7) that are at the time
outstanding not to exceed $10.0 million.
"Permitted Junior Securities" means:
(1) Equity Interests in the Company or any Guarantor; or
(2) debt securities that are subordinated to all Senior Debt and any debt
securities issued in exchange for Senior Debt to substantially the same
extent as, or to a greater extent than, the New Notes and the
Subsidiary Guarantees are subordinated to Senior Debt under the
Indenture.
"Permitted Liens" means:
(1) Liens of the Company and any Guarantor securing Senior Debt that was
permitted by the terms of the Indenture to be incurred;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Subsidiary
of the Company; provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated
with the Company or the Subsidiary;
(4) Liens on property existing at the time of acquisition thereof by the
Company or any Subsidiary of the Company, provided that such Liens
were in existence prior to the contemplation of such acquisition;
(5) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (5) of the second paragraph of the covenant
entitled "-- Certain Covenants -- Incurrence of
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Indebtedness and Issuance of Preferred Stock" covering only the assets
acquired with such Indebtedness;
(7) Liens existing on the date of the Indenture;
(8) Liens for taxes, fees, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently
concluded, provided that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made
therefor;
(9) Liens incurred in the ordinary course of business of the Company or
any Subsidiary of the Company with respect to obligations that do not
exceed $10.0 million at any one time outstanding; and
(10) Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse
Debt of Unrestricted Subsidiaries.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest thereon and the amount of all expenses and premiums incurred
in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes,
such Permitted Refinancing Indebtedness has a final maturity date no
earlier than the final maturity date of, and is subordinated in right
of payment to, the Notes on terms at least as favorable to the Holders
of Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Principal" means Fremont Investors I, LLC.
"Public Equity Offerings" means an underwritten public offering of Capital
Stock (other than Disqualified Stock) of the Company registered under the
Securities Act.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Senior Debt" means:
(1) all Indebtedness of the Company or any Guarantor outstanding under
Credit Facilities and all Hedging Obligations with respect thereto;
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(2) any other Indebtedness of the Company or any Guarantor permitted to be
incurred under the terms of the Indenture, unless the instrument under
which such Indebtedness is incurred expressly provides that it is on a
parity with or subordinated in right of payment to the Notes or any
Subsidiary Guarantee; and
(3) all Obligations with respect to the items listed in the preceding
clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding, Senior Debt will
not include:
(1) any liability for federal, state, local or other taxes owed or owing by
the Company;
(2) any Indebtedness of the Company to any of its Subsidiaries or other
Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in violation of the
Indenture.
"Significant Restricted Subsidiary" means any Restricted Subsidiary that
would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the date hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or
more of the other Subsidiaries of that Person (or a combination
thereof); and
(2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or understanding
with the Company or any Restricted Subsidiary of the Company unless the
terms of any such agreement, contract, arrangement or understanding are
no less favorable to the Company or such Restricted Subsidiary than
those that might be obtained at the time from Persons who are not
Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or
preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Company or any of the Restricted
Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such
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<PAGE> 89
designation and an Officers' Certificate certifying that such designation
complied with the preceding conditions and was permitted by the covenant
described above under the caption "-- Certain Covenants -- Restricted Payments."
If, at any time, any Unrestricted Subsidiary would fail to meet the preceding
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under the covenant described under the caption
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock," the Company shall be in default of such covenant. The Board of Directors
of the Company may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of the Company of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (1) such Indebtedness is permitted under the covenant
described under the caption "-- Certain Covenants -- Incurrence of Indebtedness
and Issuance of Preferred Stock," calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period;
and (2) no Default or Event of Default would be in existence following such
designation.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment; by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person.
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<PAGE> 90
UNITED STATES FEDERAL TAX CONSEQUENCES
The following is a summary of anticipated material United States Federal
income tax consequences associated with the exchange of old notes for new notes
pursuant to the exchange offer and the ownership and disposition of the new
notes. This summary is based upon existing United States federal income tax law
and official interpretations thereof, which are subject to change, possibly
retroactively. This summary does not discuss all aspects of United States
Federal income taxation which may be important to particular holders in light of
their individual investment circumstances, such as investors subject to special
tax rules (e.g., financial institutions, insurance companies, broker-dealers,
and tax-exempt organizations) or to persons that will hold the notes as a part
of a straddle, hedge, or synthetic security transaction for United States
Federal income tax purposes or that have a functional currency other than the
United States dollar, all of whom may be subject to tax rules that differ
significantly from those summarized below. In addition, this summary does not
discuss any foreign, state, or local tax considerations and assumes that holders
of the new notes will hold them as "capital assets" (generally, property held
for investment) under the Internal Revenue Code of 1986, as amended. Prospective
investors should consult their tax advisors regarding the United States Federal,
state, local, and foreign income and estate and other tax considerations of the
exchange of old notes for new notes and the ownership and disposition of the new
notes.
For purposes of this summary, a "U.S. Holder" is a beneficial owner of new
notes who or that is (i) an individual who is a citizen or resident of the
United States, (ii) a corporation, partnership, or other entity created or
organized under the laws of the United States or any state or political
subdivision thereof, (iii) an estate the income of which is includable in gross
income for United States Federal income tax purposes regardless of its source,
or (iv) a trust, the administration of which is subject to the primary
supervision of a United States court and which has one or more United States
persons who have the authority to control all substantial decisions of the
trust. The term "Non-U.S. Holder" means a beneficial owner of new notes that is
not a U.S. Holder.
TAX CONSEQUENCES TO U.S. HOLDERS
Exchange of Notes
A U.S. Holder will not recognize any gain or loss on the exchange of old
notes for new notes, and such U.S. Holder's tax basis and holding period in the
new notes will be the same as its basis and holding period in the old notes. The
issue price of the new notes will be the same as the issue price of the old
notes.
Market Discount
If a holder purchases new notes for an amount that is less than the issue
price of the new notes, the new notes will be considered to have market
discount. Any gain recognized by a holder on the disposition of the new notes
that have market discount or, to the extent provided in regulations, on the
disposition of exchanged basis property received in exchange for new notes that
have market discount, will be treated as ordinary income to the extent of the
market discount that accrued on the new notes while they were held by such
holder. Alternatively, the holder may elect to include market discount in income
currently over the life of the new notes. Such an election will apply to any
bonds with market discount acquired by the holder on or after the first day of
the first taxable year to which such election applies and is revocable only with
the consent of the Internal Revenue Service. Market discount will accrue on a
straight-line basis unless the holder elects to accrue the market discount on a
constant-yield method. Such an election will apply to those new notes to which
it is made and is irrevocable. Unless the holder elects to include market
discount in income on a current basis, as described above, a holder could be
required to defer the deduction of a portion of the interest paid on any
indebtedness incurred or maintained to purchase or carry the new notes.
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<PAGE> 91
Disposition of the New Notes
Upon the sale, exchange or retirement of the new notes, a U.S. Holder will
recognize gain or loss equal to the difference between the amount realized upon
the sale, exchange or retirement (less a portion allocable to any accrued and
unpaid interest, which will be subject to tax as ordinary income and market
discount as described above)and the U.S. Holder's adjusted tax basis in the new
notes. A U.S. Holder's adjusted tax basis in the new notes generally will be the
U.S. Holder's cost therefor, less any principal payments received by such
holder.
Gain or loss recognized by a U.S. Holder on the sale, exchange or
retirement of the new notes will be capital gain or loss. The gain or loss will
be long-term capital gain or loss if the new notes have been held by the U.S.
Holder for more than twelve months. Long-term capital gain of individuals is
subject to a maximum United States federal tax rate of 20%. The deductibility of
capital losses by U.S. Holders is subject to limitation.
TAX CONSEQUENCES TO NON-U.S. HOLDERS
Taxation of Interest
In general, payments of interest received by a Non-U.S. Holder will
generally not be subject to United States federal withholding tax on interest
paid on the new notes provided that (i)(a) the Non-U.S. Holder does not actually
or constructively own 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote, (b) the Non-U.S. Holder is not
a "controlled foreign corporation" that is related to the Company actually or
constructively through stock ownership, and (c) the beneficial owner of the new
notes, under penalties of perjury, provides the Company or its agent with the
beneficial owner's name and address and certifies that it is not a U.S. Holder
in compliance with applicable requirements, see "Owner Statement Requirement"
below, (ii) the interest received on the new note is effectively connected with
the conduct by the Non-U.S. Holder of a trade or business within the United
States and the Non-U.S. Holder complies with certain reporting requirements, or
(iii) the Non-U.S. Holder is entitled to the benefits of an income tax treaty
under which the interest is exempt from United States federal withholding tax
and the Non-U.S. Holder complies with certain reporting requirements. Payments
of interest not exempt from United States federal withholding tax as described
above will be subject to withholding tax at a rate of 30% (subject to reduction
under an applicable treaty).
If interest and other payments received by a Non-U.S. Holder with respect
to the new notes (including proceeds from the disposition of the new notes) are
effectively connected with the conduct by such holder of a trade or business
within the United States (or the Non-U.S. Holder is otherwise subject to United
States federal income taxation on a net basis with respect to such holder's
ownership of the new notes), such Non-U.S. Holder will be subject to United
States federal income tax on such interest at graduated rates in essentially the
same manner as a U.S. Holder. In addition, if the Non-U.S. Holder is a
corporation, it may be required to pay United States branch profits tax equal to
30% of its effectively connected earnings and profits as adjusted for the
taxable year, unless the holder qualifies for an exemption from such tax or a
lower tax rate under an applicable treaty.
Disposition of the New Notes
Any capital gain a Non-U.S. Holder recognizes on the sale, exchange,
retirement or other taxable disposition of the new notes will not be subject to
United States Federal income and withholding tax, unless (1) the gain is
effectively connected with a Non-U.S. Holder's conduct of a trade or business
within the United States, or (2) the Non-U.S. Holder is an individual who is
present in the United States for 183 days or more during the taxable year of the
disposition, and certain other requirements are satisfied.
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<PAGE> 92
Any such gain that is effectively connected with the conduct by a Non-U.S.
Holder of a United States trade or business will be subject to United States
federal income tax at graduated rates on a net income basis in the same manner
as if the holder were a U.S. Holder. If such Non-U.S. Holder is a corporation,
the gain may also be subject to the 30% United States branch profits tax
described above.
Federal Estate Taxes
A new note held by an individual who at the time of death is not a citizen
or resident of the United States will not be subject to United States Federal
estate tax as a result of such individual's death, provided that the individual
does not actually or constructively own 10% or more of the total combined voting
power of all classes of stock of the Company entitled to vote and that the
interest accrued on such new notes was not effectively connected with the
conduct by the Non-U.S. Holder of a United States trade or business.
Owner Statement Requirement
In order for a Non-U.S. Holder to establish eligibility for exemption from
United States federal withholding tax on interest income, either the beneficial
owner of the new notes or a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary course of
its trade or business (a "Financial Institution") and that holds the new notes
on behalf of such owner must file a statement with the Company or its agent to
the effect that the beneficial owner is not a United States person. Under
current regulations, this requirement will be satisfied if the Company or its
agent receives (1) a statement (an "Owner Statement") from the beneficial owner
of new notes in which such owner certifies, under penalties of perjury, that
such owner is not a United States person and provides such owner's name and
address, or (2) a statement from the Financial Institution holding the new notes
on behalf of the beneficial owner in which the Financial Institution certifies,
under penalties of perjury, that it has received the Owner Statement together
with a copy of the Owner Statement. The beneficial owner must inform the Company
or its agent (or, in the case of a statement described in clause (2) of the
immediately preceding sentence, the Financial Institution) within 30 days of any
change in information on the Owner Statement.
BACKUP WITHHOLDING AND INFORMATION REPORTING
A noncorporate U.S. Holder may be subject to information reporting and
backup withholding at a rate of 31% with respect to payments of principal and
interest made on the new notes, or on proceeds of the disposition of the new
notes, unless such U.S. Holder provides a correct taxpayer identification number
or proof of an applicable exemption, and otherwise complies with applicable
requirements of the information and backup withholding rules.
Current United States Federal income tax law provides that in the case of
payments of interest to Non-U.S. Holders, the 31% backup withholding tax will
not apply to payments made by the Company or a paying agent on the new notes if
an Owner's Statement is received or an exemption has otherwise been established,
provided in each case that the Company or paying agent, as the case may be, does
not have actual knowledge that the payee is a United States person.
Under current United States Treasury Regulations, payments of the proceeds
of the sale of new notes to or through a foreign office of a "broker" will not
be subject to backup withholding but will be subject to information reporting if
the broker is a United States person, a controlled foreign corporation for
United States Federal income tax purposes, or a foreign person 50% or more of
whose gross income is from a United States trade or business for a specified
three-year period, unless the broker has in its records documentary evidence
that the holder is not a United States person and certain other conditions are
met or the holder otherwise establishes an exemption. Payment of the proceeds of
a sale to or through the United States office of a broker is subject to backup
withholding and information reporting unless the holder certifies its non-United
States status under penalties of perjury or otherwise establishes an exemption.
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<PAGE> 93
Recently, the Treasury Department has promulgated final regulations
regarding the withholding and information reporting rules discussed above. In
general, the final regulations do not significantly alter the substantive
withholding and information reporting requirements but unify current
certification procedures and forms and clarify reliance standards. The final
regulations are generally effective for payments made after December 31, 2000,
subject to certain transition rules.
88
<PAGE> 94
PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account pursuant to
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of such new notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of new notes received in exchange for old notes where
such old notes were acquired as a result of market-making activities or other
trading activities. We have agreed that for a period of 180 days after the
Expiration Date, we will make this prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale.
We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time:
- in one or more transactions in the over-the-counter market,
- in negotiated transactions,
- through the writing of options on the new notes, or
- a combination of such methods of resale.
Such notes may be sold:
- at market prices prevailing at the time of resale,
- at prices related to such prevailing market prices, or
- at negotiated prices.
Any such resale may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such new notes.
Any broker-dealer that resells new notes that were received by it for its
own account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such new notes may be deemed to be an
"underwriter" within the meaning of the Securities Act. Any profit on any such
resale of new notes and any commissions or concessions received by any of them
may be deemed to be underwriting compensation under the Securities Act. The
letter of transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, we will promptly send
additional copies of the prospectus and any amendment or supplement to the
prospectus to any broker-dealer requesting these copies in the letter of
transmittal. We have agreed to pay all expenses incident to the exchange offer
other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the notes, including any broker-dealers, against
various liabilities, including liabilities under the Securities Act.
Following consummation of the exchange offer, we may, in our sole
discretion, commence one or more additional exchange offers to holders of old
notes who did not exchange their old notes for new notes in the exchange offer
on terms which may differ from those contained in the registration rights
agreement. We may use this prospectus, as it may be amended of supplemented from
time to time, in connection with any such additional exchange offers. Such
additional exchange offers will take place from time to time until all
outstanding old notes have been exchanged for new notes.
LEGAL MATTERS
The validity of the new notes offered hereby and certain other legal
matters will be passed upon on behalf of the Company by Skadden, Arps, Slate,
Meagher & Flom LLP, Palo Alto, California.
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<PAGE> 95
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements of Juno at November 30, 1998 and 1997
and for each of the three years in the period ended November 30, 1998, included
in this prospectus, have been audited by PricewaterhouseCoopers LLP, independent
accountants, as stated in their report appearing herein.
AVAILABLE INFORMATION
Juno is subject to the information requirements of the Exchange Act (File
No. 0-11631), and in accordance therewith files periodic reports, proxy
statements and other information with the Commission relating to its business,
financial statements and other matters. The reports, proxy statements and other
information filed by Juno may be inspected and copied at prescribed rates at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and should be available for inspection and
copying at the regional offices of the Commission located at 7 World Trade
Center, Suite 1375, New York, New York 10048 and at Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material can be obtained
at prescribed rates by writing to the Commission's Public Reference Section, 450
Fifth Street, N.W., Washington, D.C. 20549 (telephone number: 1-800-SEC-0330).
The Commission also maintains a Web site that contains reports, proxy statements
and other information regarding registrants that file electronically with the
Commission. The address of such site is http://www.sec.gov. Such material
relating to Juno can also be inspected at the reading room of the library of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W., 2nd
Floor, Washington, D.C. 20006.
INCORPORATION BY REFERENCE
We have elected to "incorporate by reference" certain information into this
prospectus. By incorporating by reference we can disclose important information
to you by referring you to another document filed separately with the
Commission. The information incorporated by reference is deemed to be part of
this prospectus, except for any information superseded by information in this
prospectus. This prospectus incorporates by reference the documents set forth
below that we have previously filed with the Commission. These documents contain
important information about Juno and its finances.
<TABLE>
<CAPTION>
JUNO SEC FILINGS (FILE NO. 0-11631) FILED ON
----------------------------------- --------
<S> <C>
Annual Reports on Form 10-K and Form 10-K/A February 25, 1999 and March 29, 1999
Quarterly Report on Form 10-Q April 12, 1999
Quarterly Report on Form 10-Q June 24, 1999
Current Report on Form 8-K March 29, 1999
Current Report on Form 8-K June 28, 1999
Current Report on Form 8-K June 29, 1999
Current Report on Form 8-K July 1, 1999
Current Report on Form 8-K July 15, 1999
</TABLE>
We are also incorporating by reference additional documents that we file
with the Commission between the date of this prospectus and the date of the
completion of the exchange offer.
Documents incorporated by reference are available from us without charge,
excluding all exhibits unless we have specifically incorporated by reference an
exhibit in this prospectus. You may obtain documents incorporated by reference
in this prospectus by writing to us at Juno Lighting, Inc., 1300 South Wolf
Road, Des Plaines, Illinois 60018, Attention: Chief Financial Officer, or
calling us at (847) 827-9880.
-------------------------
This exchange offer is not being made to, nor will we accept surrenders for
exchange from holders of outstanding old notes in any jurisdiction in which this
exchange offer or the acceptance thereof would not be in compliance with the
securities or blue sky laws of such jurisdiction.
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<PAGE> 96
PRO FORMA CONSOLIDATED FINANCIAL DATA
The following pro forma consolidated financial statements of Juno include
the pro forma consolidated balance sheet as of May 31, 1999 and the pro forma
consolidated statements of income for the twelve- and six-month periods ended
May 31, 1999 and the year ended November 30, 1998.
The pro forma consolidated balance sheet is based on the unaudited
consolidated balance sheet of Juno as of May 31, 1999, and is adjusted to give
effect to the recapitalization as if it had occurred on such date.
The pro forma consolidated statements of income are based on the audited
consolidated statement of income of Juno for the year ended November 30, 1998
and the unaudited consolidated statements of income of Juno for each of the four
quarters in the twelve-month period ended May 31, 1999 are adjusted to give
effect to the recapitalization as though it had occurred as of December 1, 1997.
The pro forma consolidated financial statements and the accompanying notes
should be read in conjunction with Juno's historical consolidated financial
statements and related notes thereto included elsewhere in this offering
memorandum.
The pro forma consolidated financial statements do not purport to represent
what Juno's financial condition or results of operations would actually have
been had the recapitalization occurred on the assumed date, nor do they project
Juno's financial condition or results of operations for any future period or
date.
P-1
<PAGE> 97
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MAY 31, 1999
<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................... $ 28,232 $ (27,232)(a) $ 1,000
Marketable securities.......................... 74,485 (74,485)(b) --
Accounts receivable, net....................... 28,515 -- 28,515
Inventories.................................... 29,318 -- 29,318
Prepaid expenses............................... 4,319 -- 4,319
-------- --------- ---------
Total current assets................... 164,869 (101,717) 63,152
Property and equipment, net...................... 47,313 -- 47,313
Deferred financing costs......................... -- 9,747(c) 9,747
Other assets, net................................ 5,417 -- 5,417
-------- --------- ---------
Total assets........................... $217,599 $ (91,970) $ 125,629
======== ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable............................... $ 6,548 $ -- $ 6,548
Accrued liabilities............................ 5,655 65(d) 5,720
Current maturities of existing long-term
debt........................................ 120 (120)(e) --
Current maturities of term loans............... -- 1,750(f) 1,750
-------- --------- ---------
Total current liabilities.............. 12,323 1,695 14,018
Deferred income taxes............................ 1,654 (65)(d) 1,589
Existing long-term debt, less current
maturities..................................... 3,205 (3,205)(e) --
Revolving credit facility........................ -- 7,260(f) 7,260
Term loans, less current maturities.............. -- 88,250(f) 88,250
Senior subordinated notes........................ -- 124,103(f) 124,103
-------- --------- ---------
Total liabilities...................... 17,182 218,038 235,220
Stockholders' equity (deficit)
Series A convertible preferred stock........... -- 106,000(g) 106,000
Common stock................................... 186 (162)(h) 24
Paid-in capital................................ 5,864 (5,108)(h) 756
Accumulated other comprehensive income......... (402) (135)(i) (537)
Retained earnings (deficit).................... 194,769 (400,160)(h) (215,834)
(10,443)(i)
-------- --------- ---------
Total stockholders' equity (deficit)... 200,417 (310,008) (109,591)
-------- --------- ---------
Total liabilities and stockholders'
equity (deficit)..................... $217,599 $ (91,970) $ 125,629
======== ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE> 98
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
(a) The net adjustment to cash and cash equivalents is anticipated to be as
follows (in thousands):
INCREASES:
<TABLE>
<S> <C>
Marketable securities..................................... $ 74,485
Senior credit facilities
Revolving credit facility.............................. 7,260
Term loans............................................. 90,000
Senior subordinated notes................................. 124,103
Preferred equity.......................................... 106,000
---------
$ 401,848
---------
DECREASES:
Purchase of equity........................................ $(405,430)
Repayment of existing debt................................ (3,325)
Transaction expenses...................................... (20,325)
---------
(429,080)
---------
Net adjustment to cash and cash equivalents............... $ (27,232)
=========
</TABLE>
(b) Reflects the sale of Juno's marketable securities to finance a portion of
the recapitalization, including recognition of the after-tax gain which was
previously recorded as a separate component of stockholders' equity.
(c) Represents deferred financing costs related to the recapitalization.
(d) Reflects income taxes currently payable resulting from Juno's sale of
marketable securities described in note (b) above, which were previously
recorded as deferred income tax liabilities.
(e) Reflects the repayment of Juno's pre-existing debt obligations.
(f) Reflects new borrowings associated with the recapitalization.
(g) Reflects the issuance of 1,060,000 shares of a new series of convertible
preferred stock at a price of $100.00 per share. The conversion price per
share, $26.25, exceeds the price per share of $25.00 offered to
stockholders in the merger. If the market price were to exceed the
conversion price upon issuance, that is, if the conversion feature were "in
the money," the intrinsic value of this conversion feature would be
allocated to paid-in capital.
(h) Reflects the redemption of 16,217,227 common shares at $25.00 per share.
(i) Reflects the net adjustment to retained earnings for the following
non-recurring items directly attributable to the recapitalization: (i)
estimated transaction costs of $10,578,000 and (ii) an after-tax gain of
$135,000 generated by the sale of Juno's marketable securities to finance a
portion of the recapitalization.
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<PAGE> 99
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED MAY 31, 1999
<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS(A) PRO FORMA
---------- -------------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Net sales....................................... $168,490 $ -- $168,490
Cost of sales................................... 83,953 -- 83,953
-------- --------
Gross profit.................................... 84,537 -- 84,537
Selling, general and administrative expenses.... 45,414 325(b) 45,739
-------- --------- --------
Operating income................................ 39,123 (325) 38,798
Other income (expenses)
Interest expense.............................. (148) (23,398)(c) (23,546)
Interest and dividend income.................. 4,692 (4,692)(d) --
Miscellaneous................................. 61 -- 61
-------- --------- --------
Total other income (expense)............... 4,605 (28,090) (23,485)
-------- --------- --------
Income before taxes on income................... 43,728 (28,415) 15,313
Taxes on income................................. 15,375 (9,250)(e) 6,125
-------- --------- --------
Net income...................................... $ 28,353 $ (19,165) $ 9,188
======== ========= ========
Less: preferred stock dividends................. -- 9,091(f) 9,091
-------- --------- --------
Income available to common stockholders......... $ 28,353 $ (28,256) $ 97
======== ========= ========
Per share data:
Net income
Basic...................................... $ 1.52 $ .04
Diluted(g)................................. 1.52 .04
Shares used in per share calculation:
Basic...................................... 18,593 2,400
Diluted(g)................................. 18,644 2,467
Other data:
Depreciation and amortization(h).............. $ 3,912 $ 3,912
</TABLE>
The accompanying notes are an integral part of these financial statements.
P-4
<PAGE> 100
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED MAY 31, 1999
<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS(A) PRO FORMA
---------- -------------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Net sales..................................... $82,781 $ -- $ 82,781
Cost of sales................................. 42,032 -- 42,032
------- -------- --------
Gross profit.................................. 40,749 -- 40,749
Selling, general and administrative
expenses.................................... 22,672 163(b) 22,835
------- -------- --------
Operating income.............................. 18,077 (163) 17,914
Other income (expenses)
Interest expense............................ (62) (11,678)(c) (11,740)
Interest and dividend income................ 2,417 (2,417)(d) --
Miscellaneous............................... 40 -- 40
------- -------- --------
Total other income (expense)............. 2,395 (14,095) (11,700)
------- -------- --------
Income before taxes on income................. 20,472 (14,258) 6,214
Taxes on income............................... 7,157 (4,671)(e) 2,486
------- -------- --------
Net income.................................... $13,315 $ (9,587) $ 3,728
======= ======== ========
Less: preferred stock dividends............... -- 4,634(f) 4,634
------- -------- --------
Income (loss) attributable to common
stockholders................................ $13,315 $(14,221) $ (906)
======= ======== ========
Per share data:
Net income..................................
Basic.................................... $ .72 $ (.38)
Diluted(g)............................... .71 (.38)
Shares used in per share calculation:
Basic.................................... 18,599 2,400
Diluted(g)............................... 18,654 2,400
Other data:
Depreciation and amortization(h)............ $ 2,076 $ 2,076
</TABLE>
The accompanying notes are an integral part of these financial statements.
P-5
<PAGE> 101
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED NOVEMBER 30, 1998
<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS(A) PRO FORMA
---------- -------------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Net sales..................................... $160,941 $ -- $160,941
Cost of sales................................. 79,882 -- 79,882
-------- -------- --------
Gross profit.................................. 81,059 -- 81,059
Selling, general and administrative
expenses.................................... 44,083 325(b) 44,408
-------- -------- --------
Operating income.............................. 36,976 (325) 36,651
Other income (expenses)
Interest expense............................ (166) (23,463)(c) (23,629)
Interest and dividend income................ 4,371 (4,371)(d) --
Miscellaneous............................... 76 -- 76
-------- -------- --------
Total other income (expense)............. 4,281 (27,834) (23,553)
-------- -------- --------
Income before taxes on income................. 41,257 (28,159) 13,098
Taxes on income............................... 14,632 (9,393)(e) 5,239
-------- -------- --------
Net income.................................... $ 26,625 $(18,766) $ 7,859
======== ======== ========
Less: preferred stock dividends............... -- 8,739(f) 8,739
-------- -------- --------
Income (loss) attributable to common
stockholders................................ $ 26,625 $(27,505) $ (880)
======== ======== ========
Per share data:
Net income
Basic.................................... $ 1.43 $ (.37)
Diluted(g)............................... 1.43 (.37)
Shares used in per share calculation:
Basic.................................... 18,576 2,400
Diluted(g)............................... 18,615 2,400
Other Data:
Depreciation and amortization(h)............ $ 3,678 $ 3,678
</TABLE>
The accompanying notes are an integral part of these financial statements.
P-6
<PAGE> 102
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
(a) The pro forma adjustments do not include the following non-recurring items
directly attributable to the transactions contemplated by the merger
agreement: (i) an after-tax charge of $630,000 for management bonuses; and
(ii) an after-tax realized gain of $135,000 generated by the sale of Juno's
marketable securities to finance a portion of the recapitalization.
(b) Reflects the fee Juno will pay Fremont Partners L.L.C. pursuant to a
management agreement.
(c) The net adjustment to interest expense consists of the following (dollars
in thousands):
<TABLE>
<CAPTION>
TWELVE
MONTHS SIX MONTHS
ENDED ENDED YEAR ENDED
MAY 31, MAY 31, NOVEMBER 30,
1999 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
Elimination of interest expense related to the
existing indebtedness repaid in connection with
the recapitalization........................... $ 148 $ 62 $ 166
Interest on the new indebtedness at an assumed
weighted average interest rate of 10.1% per
annum.......................................... (22,289) (11,111) (22,372)
Amortization expense for deferred financing costs
related to the above........................... (1,257) (629) (1,257)
-------- -------- --------
Total interest increment............... $(23,398) $(11,678) $(23,463)
======== ======== ========
</TABLE>
A 0.5% increase or decrease in the assumed weighted average interest rate
on the contemplated financing would change pro forma interest expense by
$1,111 for the twelve months ended May 31, 1999 and the year ended November
30, 1998, and by $556 for the six months ended May 31, 1999.
(d) Reflects the elimination of interest income generated by the marketable
securities sold in connection with the recapitalization.
(e) Reflects the adjustment necessary to state the pro forma taxes on income at
an assumed effective tax rate of 40%. The increase in the effective tax
rate relates to the elimination of interest income described in note (d)
above.
(f) Reflects the cumulative dividend on Series A convertible preferred stock at
a rate of 2% per quarter. If the conversion feature were "in the money"
upon issuance of the preferred stock, the intrinsic value of this right
would be recorded to paid-in capital and the resulting discount recognized
as a dividend to the preferred shareholders over the period benefitted.
(g) If the convertible preferred stock were converted, pro forma diluted net
income per share would have been $1.41, $.57, and $1.21 for the twelve
months ended May 31, 1999, the six months ended May 31, 1999 and the year
ended November 30, 1998, respectively. Such conversion is anti-dilutive,
and therefore excluded from pro forma diluted net income per share.
(h) Excludes amortization of deferred financing costs.
P-7
<PAGE> 103
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants........................... F-2
Consolidated Statements of Income for the three years ended
November 30, 1998, 1997 and 1996.......................... F-3
Consolidated Balance Sheets at November 30, 1998 and 1997... F-4
Consolidated Statements of Stockholders' Equity for the
three years ended November 30, 1996, 1997 and 1998........ F-6
Consolidated Statements of Cash Flow for the three years
ended November 30, 1998, 1997 and 1996.................... F-7
Notes to Consolidated Financial Statements.................. F-8
Condensed Consolidated Statements of Income for the three
months ended May 31, 1999 and May 31, 1998................ F-20
Condensed Consolidated Statements of Income for the six
months ended May 31, 1999 and May 31, 1998................ F-21
Condensed Consolidated Balance Sheets at May 31, 1999 and
November 30, 1998......................................... F-22
Condensed Consolidated Statement of Retained Earnings for
the six months ended
May 31, 1999.............................................. F-23
Condensed Consolidated Statements of Cash Flows for the six
months ended May 31, 1999 and May 31, 1998................ F-24
Notes to Condensed Consolidated Financial Statements........ F-25
</TABLE>
F-1
<PAGE> 104
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Stockholders of Juno Lighting, Inc.
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, of stockholders' equity and of cash
flows present fairly, in all material respects, the financial position of Juno
Lighting, Inc. and its subsidiaries at November 30, 1998 and 1997, and the
results of their operations and their cash flows for each of the three years in
the period ended November 30, 1998, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Chicago, Illinois
January 14, 1999
F-2
<PAGE> 105
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
---------------------------------------
1998 1997 1996
----------- ----------- -----------
(IN THOUSANDS EXCEPT SHARE AND
PER SHARE AMOUNTS)
<S> <C> <C> <C>
Net sales............................................ $ 160,941 $ 139,855 $ 131,479
Cost of sales........................................ 79,882 71,881 68,319
----------- ----------- -----------
Gross profit......................................... 81,059 67,974 63,160
Selling, general and administrative.................. 44,083 40,601 36,766
----------- ----------- -----------
Operating income..................................... 36,976 27,373 26,394
----------- ----------- -----------
Other income (expense):
Interest expense................................... (166) (244) (317)
Interest and dividend income....................... 4,371 3,946 3,957
Miscellaneous...................................... 76 318 78
----------- ----------- -----------
Total other income.............................. 4,281 4,020 3,718
----------- ----------- -----------
Income before taxes on income........................ 41,257 31,393 30,112
Taxes on income...................................... 14,632 11,090 10,215
----------- ----------- -----------
Net income........................................... $ 26,625 $ 20,303 $ 19,897
=========== =========== ===========
Net income per common share (basic and diluted)...... $ 1.43 $ 1.10 $ 1.08
=========== =========== ===========
Weighted average number of shares outstanding --
basic.............................................. 18,576,015 18,522,270 18,451,366
Weighted average number of shares outstanding --
diluted............................................ 18,614,863 18,540,835 18,494,548
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE> 106
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
NOVEMBER 30,
--------------------
1998 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current:
Cash...................................................... $ 10,498 $ 6,806
Marketable securities..................................... 77,836 65,766
Accounts receivable, less allowance for doubtful accounts
of $1,205 and $907..................................... 24,577 22,533
Inventories............................................... 28,115 22,707
Prepaid expenses and miscellaneous........................ 5,041 4,696
-------- --------
Total current assets................................... 146,067 122,508
-------- --------
Property and equipment:
Land...................................................... 7,279 7,322
Building and improvements................................. 31,580 31,372
Tools and dies............................................ 7,884 7,117
Machinery and equipment................................... 7,135 6,299
Computer equipment........................................ 5,043 2,060
Office furniture and equipment............................ 2,606 2,166
-------- --------
61,527 56,336
Less accumulated depreciation............................. (15,351) (11,887)
-------- --------
Net property and equipment............................. 46,176 44,449
-------- --------
Other assets:
Marketable securities..................................... 12,049 11,373
Goodwill and other intangibles, net of accumulated
amortization of $1,536 and $1,367...................... 3,940 4,603
Miscellaneous............................................. 607 4,456
-------- --------
Total other assets..................................... 16,596 20,432
-------- --------
Total assets................................................ $208,839 $187,389
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE> 107
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
NOVEMBER 30,
--------------------------
1998 1997
----------- -----------
(DOLLARS IN THOUSANDS
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
LIABILITIES
Current:
Accounts payable.......................................... $ 4,441 $ 3,579
Accrued liabilities....................................... 8,097 7,938
Current maturities of long-term debt...................... 120 115
-------- --------
Total current liabilities.............................. 12,658 11,632
-------- --------
Long-term debt, less current maturities..................... 3,265 3,385
-------- --------
Deferred income taxes payable............................... 1,468 1,742
-------- --------
Commitments and contingencies
Stockholders' equity
Common stock, $.01 par value; 50,000,000 shares
authorized, 18,595,327 and 18,563,412 shares issued.... 186 186
Paid-in capital........................................... 5,484 4,934
Accumulated other comprehensive income.................... 604 328
Retained earnings........................................... 185,174 165,238
-------- --------
191,448 170,686
-------- --------
Less: treasury stock, at cost; 0 and 3,642 shares........... -- (56)
-------- --------
Total stockholders' equity............................. 191,448 170,630
-------- --------
Total liabilities and stockholders' equity.................. $208,839 $187,389
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE> 108
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
YEARS ENDED NOVEMBER 30, 1996, 1997 AND 1998
-------------------------------------------------------------------
COMMON STOCK ACCUMULATED
------------------ OTHER
AMOUNT PAID-IN COMPREHENSIVE RETAINED TREASURY
$.01 PAR CAPITAL INCOME EARNINGS STOCK TOTAL
-------- ------- ------------- -------- -------- --------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Balance, December 1, 1995....................... $185 $4,415 $ 460 $137,342 $(1,034) $141,368
Comprehensive income:
Net income for 1996........................... -- -- -- 19,897 -- 19,897
Gain on foreign currency translation.......... -- -- 4 -- -- 4
Change in unrealized holding gains............ -- -- 9 -- -- 9
--------
Comprehensive income............................ 19,910
--------
Treasury stock purchased...................... -- -- -- -- (637) (637)
Treasury stock reissued....................... -- -- -- (453) 875 422
Exercise of stock options..................... 1 379 -- -- -- 380
Tax benefit of stock options exercised........ -- 121 -- -- -- 121
Cash dividend ($.32 per share)................ -- -- -- (5,903) -- (5,903)
---- ------ ----- -------- ------- --------
Balance, November 30, 1996...................... 186 4,915 473 150,883 (796) 155,661
==== ====== ===== ======== ======= ========
Comprehensive income:
Net income for 1997........................... -- -- -- 20,303 -- 20,303
(Loss) on foreign currency translation........ -- -- (198) -- -- (198)
Change in unrealized holding gains............ -- -- 53 -- -- 53
--------
Comprehensive income............................ 20,158
--------
Treasury stock reissued....................... -- -- -- (23) 740 717
Tax benefit of stock options exercised........ -- 19 -- -- -- 19
Cash dividend ($.32 per share)................ -- -- -- (5,925) -- (5,925)
---- ------ ----- -------- ------- --------
Balance, November 30, 1997...................... 186 4,934 328 165,238 (56) 170,630
==== ====== ===== ======== ======= ========
Comprehensive income:
Net income for 1998........................... -- -- -- 26,625 -- 26,625
(Loss) on foreign currency translation........ -- -- (260) -- -- (260)
Change in unrealized holding gains............ -- -- 536 -- -- 536
--------
Comprehensive income............................ 26,901
--------
Treasury stock reissued....................... -- -- -- (3) 56 53
Exercise of stock options..................... -- 510 -- -- -- 510
Tax benefit of stock options exercised........ -- 40 -- -- -- 40
Cash dividend ($.36 per share)................ -- -- -- (6,686) -- (6,686)
---- ------ ----- -------- ------- --------
Balance, November 30, 1998...................... $186 $5,484 $ 604 $185,174 $ -- $191,448
==== ====== ===== ======== ======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE> 109
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
---------------------------
1998 1997 1996
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Net income.................................................. $26,625 $20,303 $19,897
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 3,678 3,484 3,074
Gain on sale of assets.................................... (178) (397) --
Increase (decrease) in allowance for doubtful accounts.... 298 353 (300)
Deferred income taxes..................................... (274) (369) (18)
Changes in assets and liabilities:
(Increase) in accounts receivable...................... (2,601) (1,359) (1,965)
(Increase) decrease in inventory....................... (5,408) 568 (3,692)
(Increase) decrease in prepaid expenses................ (607) (386) 714
(Increase) decrease in other assets.................... (27) (671) 55
Increase (decrease) in accounts payable................ 862 (553) 3
Increase (decrease) in accrued liabilities............. 199 (3,773) 4,394
------- ------- -------
Net cash provided by operating activities................... 22,567 17,200 22,162
------- ------- -------
Cash flows provided by (used in) investing activities:
Purchases of marketable securities........................ (47,089) (22,514) (43,226)
Proceeds from sales of marketable securities.............. 35,140 23,807 37,531
Proceeds from sale of assets.............................. 4,605 4,322 --
Capital expenditures...................................... (5,293) (13,226) (13,316)
------- ------- -------
Net cash (used in) investing activities..................... (12,637) (7,611) (19,011)
------- ------- -------
Cash flows provided by (used in) financing activities:
Principal payments on long-term debt...................... (115) (1,048) (458)
Dividends paid............................................ (6,686) (5,925) (5,903)
Purchase of treasury stock................................ -- -- (637)
Proceeds from sale of common stock through Employee Stock
Purchase Plan.......................................... 191 202 --
Proceeds from exercise of stock options................... 372 515 801
------- ------- -------
Net cash (used in) financing activities..................... (6,238) (6,256) (6,197)
------- ------- -------
Net increase (decrease) in cash............................. 3,692 3,333 (3,046)
Cash at beginning of year................................... 6,806 3,473 6,519
------- ------- -------
Cash at end of year......................................... $10,498 $ 6,806 $ 3,473
======= ======= =======
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest............................................... $ 163 $ 256 $ 320
Income taxes........................................... $16,234 $11,781 $10,577
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE> 110
JUNO LIGHTING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF THE BUSINESS
Juno Lighting, Inc. (the "Company") is a specialist in the design,
manufacture and marketing of lighting fixtures for commercial and residential
use primarily in the United States.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All material intercompany accounts and
transactions have been eliminated.
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
MARKETABLE SECURITIES
Consistent with the provisions of Statement of Financial Accounting
Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," the Company has classified its current and non-current securities
as available-for-sale and reports them at their estimated market values, which
have been determined based upon published market quotes. Unrealized gains and
losses relating to available-for-sale securities are considered to be temporary
and therefore are excluded from earnings and recorded as a separate component of
stockholders' equity until realized. Realized gains and losses on sales of
marketable securities are computed using the specific identification method.
INVENTORIES
Inventories are valued at the lower of cost (first-in, first-out) or
market.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed over
estimated useful lives using the straight-line method for financial reporting
purposes and accelerated methods for income tax reporting. Depreciation expense
in 1998 and 1997 amounted to approximately $3,508,000 and $3,287,000,
respectively.
Useful lives for property and equipment are as follows:
<TABLE>
<S> <C>
Buildings and improvements................................. 20 - 40 years
Tools and dies............................................. 3 years
Machinery and equipment.................................... 7 years
Computer equipment......................................... 5 years
Office furniture and equipment............................. 5 years
</TABLE>
GOODWILL
Goodwill is amortized using the straight-line method over a forty year
period.
F-8
<PAGE> 111
JUNO LIGHTING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INCOME TAXES
The Company uses the asset and liability approach under which deferred
taxes are provided for temporary differences between the financial reporting and
income tax bases of assets and liabilities based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect
taxable income.
RESEARCH AND DEVELOPMENT
The Company spent approximately $4,095,000, $4,719,000 and $4,309,000 on
research, development and testing of new products and development of related
tooling in fiscal 1998, 1997 and 1996, respectively.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's marketable securities are recorded at market value. The
carrying amount of the Company's other financial instruments approximates their
estimated fair value based upon market prices for the same or similar type of
financial instruments.
FOREIGN CURRENCY TRANSLATION
The financial statements of the Company's Canadian subsidiary have been
translated using local currency as the functional currency.
EARNINGS PER SHARE
Basic earnings per share are computed based upon weighted average number of
shares of common stock. Diluted earnings per share are computed based on the
weighted average number of shares of common stock and common stock equivalents
(stock options) outstanding. Share and per share information have been adjusted
for all stock splits.
STOCK-BASED COMPENSATION
As permitted by Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123"), the Company has elected
to continue to account for its stock-based awards in accordance with Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25") and has provided the pro forma disclosures as required by SFAS 123
for the years ended November 30, 1998, 1997 and 1996.
MARKETABLE SECURITIES
Marketable securities consist principally of tax exempt municipal bonds.
The amortized cost of available-for-sale securities approximated the estimated
market value of such securities at November 30, 1998; gross unrealized holding
gains and losses were not significant. The estimated market value of
available-for-sale securities at November 30, 1998, by contractual maturity, are
shown below. Actual
F-9
<PAGE> 112
JUNO LIGHTING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
maturities may differ from contractual maturities as issuers have the right to
call or prepay certain of these securities.
<TABLE>
<CAPTION>
MATURITY MARKET VALUE
- -------- --------------
(IN THOUSANDS)
<S> <C>
Within one year........................................... $12,190
After one through ten years............................... 52,546
Over ten years............................................ 25,149
-------
$89,885
=======
</TABLE>
Gross realized gains and losses on sales were not material.
INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
NOVEMBER 30,
------------------
1998 1997
------- -------
(IN THOUSANDS)
<S> <C> <C>
Finished goods.............................................. $13,164 $ 7,762
Raw materials............................................... 14,951 14,945
------- -------
Total....................................................... $28,115 $22,707
======= =======
</TABLE>
Work in process inventories are not significant in amount and are included
in finished goods.
ACCRUED LIABILITIES
Accrued liabilities consist of the following:
<TABLE>
<CAPTION>
NOVEMBER 30,
----------------
1998 1997
------ ------
(IN THOUSANDS)
<S> <C> <C>
Compensation and benefits................................... $4,684 $3,697
Current income taxes........................................ -- 323
Promotional programs........................................ 1,634 1,282
Real estate taxes........................................... 884 826
Commissions................................................. 443 378
Construction costs.......................................... -- 923
Other....................................................... 452 509
------ ------
Total....................................................... $8,097 $7,938
====== ======
</TABLE>
F-10
<PAGE> 113
JUNO LIGHTING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
NOVEMBER 30,
----------------
1998 1997
------ ------
(IN THOUSANDS)
<S> <C> <C>
Industrial Development Revenue Bond,
payable in escalating installments through December 2016,
plus interest at a variable rate, generally
approximating 67% of prime............................. $3,385 $3,500
Less current maturities..................................... 120 115
------ ------
Total long-term debt........................................ $3,265 $3,385
====== ======
</TABLE>
The aforementioned bonds are collateralized by certain land, buildings, and
machinery and equipment. The aggregate amounts of existing long-term debt
maturing in each of the next five years are as follows:
1999 -- $120,000; 2000 -- $125,000; 2001 -- $135,000; 2002 -- $140,000;
2003 -- $145,000
TAXES ON INCOME
Provisions for federal and state income taxes in the consolidated
statements of income are comprised of the following:
<TABLE>
<CAPTION>
NOVEMBER 30,
-----------------------------
1998 1997 1996
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal................................................... $12,621 $ 9,494 $ 8,789
State..................................................... 2,632 2,120 1,563
------- ------- -------
15,253 11,614 10,352
------- ------- -------
Deferred:
Federal................................................... (528) (443) (117)
State..................................................... (93) (81) (20)
------- ------- -------
(621) (524) (137)
------- ------- -------
Total taxes on income....................................... $14,632 $11,090 $10,215
======= ======= =======
</TABLE>
F-11
<PAGE> 114
JUNO LIGHTING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Deferred tax assets (liabilities) are comprised of the following:
<TABLE>
<CAPTION>
NOVEMBER 30,
------------------
1998 1997
------- -------
(IN THOUSANDS)
<S> <C> <C>
Reserves for doubtful accounts.............................. $ 451 $ 327
Inventory costs capitalized for tax purposes................ 547 452
Compensation and benefits................................... 993 857
Accrued warranty reserve.................................... 33 27
Accrued advertising......................................... 99 112
------- -------
Deferred tax assets....................................... 2,123 1,775
------- -------
Depreciation................................................ (1,020) (1,264)
Prepaid health and welfare costs............................ (328) (329)
Basis difference of acquired assets......................... (87) (95)
Capitalized interest........................................ (15) (34)
Real estate taxes........................................... (347) (348)
Unrealized holding gains.................................... (640) (378)
------- -------
Deferred tax liabilities.................................. (2,437) (2,448)
------- -------
Net deferred tax liability.................................. $ (314) $ (673)
======= =======
</TABLE>
The following summary reconciles taxes at the federal statutory tax rate to
the Company's effective tax rate:
<TABLE>
<CAPTION>
NOVEMBER 30,
--------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Income taxes at statutory rate.............................. 35.0% 35.0% 35.0%
Dividend exclusion and municipal interest................... (3.5) (4.2) (4.3)
State and local taxes, net of federal income tax benefit.... 4.1 4.4 3.6
Other....................................................... (.1) .1 (.4)
---- ---- ----
Effective tax rate.......................................... 35.5% 35.3% 33.9%
==== ==== ====
</TABLE>
STOCK BASED COMPENSATION PLANS
The Company maintains two stock-based compensation plans: a stock option
plan and a stock purchase plan. The Company's stock option plan provides for the
granting of stock options or stock appreciation rights ("SAR") to certain key
employees, including officers. The stock option plan is designed so that options
granted thereunder at 100% of the fair value of the common stock at date of
grant may, under certain circumstances, be treated as "incentive stock options"
as defined in Section 422 of the Internal Revenue Code of 1986, as amended.
Under the stock option plan, up to 600,000 shares of the Company's common stock
may be issued upon the exercise of stock options, and SARs may be granted with
respect to up to 600,000 shares of the Company's common stock. The per-share
option price for options granted under the stock option plan may not be less
than 100% of the fair market value of the Company's common stock on the date of
grant.
The Company's stock purchase plan allows employees to purchase shares of
the Company's common stock through payroll deductions over a twelve month
period. The purchase price is equal to 85% of the fair market value of the
common stock on either the first or last day of the accumulation period,
F-12
<PAGE> 115
JUNO LIGHTING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
whichever is lower. Purchases under the stock purchase plan are limited to the
lesser of $5,000 or 10% of an employees base salary. In connection with the
Company's stock purchase plan, 400,000 shares of common stock have been reserved
for future issuances. Under this stock purchase plan, 14,257 shares of common
stock were issued at $13.39 per share in 1998.
A summary of activity under the Company's stock option plan is as follows:
<TABLE>
<CAPTION>
WEIGHTED
SHARES AVERAGE
AVAILABLE OPTIONS EXERCISE
FOR GRANT OUTSTANDING PRICE
--------- ----------- --------
<S> <C> <C> <C>
Balance at November 30, 1995.............................. 271,000 445,000 $14.53
Options granted......................................... -- 1,000 $18.25
Options exercised....................................... -- (109,000) $ 7.32
Options canceled........................................ -- (12,000) $16.75
------- -------- ------
Balance at November 30, 1996.............................. 282,000 325,000 $16.87
Options granted......................................... -- 21,000 $16.16
Options exercised....................................... -- (32,000) $16.00
Options canceled........................................ -- (62,000) $16.76
------- -------- ------
Balance at November 30, 1997.............................. 323,000 252,000 $16.95
Options granted......................................... -- 11,000 $22.06
Options exercised....................................... -- (21,000) $17.47
Options canceled........................................ -- (6,000) $15.58
------- -------- ------
Balance at November 30, 1998.............................. 318,000 236,000 $17.17
======= ======== ======
</TABLE>
A summary of outstanding and exercisable stock options as of November 30,
1998, is as follows:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
--------------------------------------- --------------------
WEIGHTED
AVERAGED WEIGHTED WEIGHTED
REMAINING AVERAGE AVERAGE
NUMBER OF CONTRACTUAL LIFE EXERCISE NUMBER OF EXERCISE
RANGE OF EXERCISE PRICES SHARES (IN YEARS) PRICE SHARES PRICE
- ------------------------ --------- ---------------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
$14.44............................... 95,800 7.0 $14.44 54,800 $14.44
$15.38............................... 13,000 8.1 $15.38 2,600 $15.38
$16.69 - $18.50...................... 46,000 6.3 $18.46 33,400 $18.48
$19.63 - $22.19...................... 81,200 5.7 $19.95 54,400 $19.63
------- --- ------ ------- ------
236,000 6.5 $17.17 145,200 $17.33
======= === ====== ======= ======
</TABLE>
As permitted under SFAS 123, the Company has elected to continue to follow
APB Opinion No. 25 in accounting for stock-based awards.
Pro forma information regarding net income and earnings per share is
required by SFAS 123 for stock-based awards granted after November 30, 1995, as
if the Company had accounted for its stock-based awards under the fair value
method of SFAS 123. The fair value of the Company's stock-based awards was
estimated as of the date of grant using the Black-Scholes option pricing model.
The weighted average estimated grant date fair value, as defined by SFAS
123, for options granted to employees during fiscal 1998, 1997 and 1996 was
$8.52, $7.54 and $6.74 per share, respectively, under the
F-13
<PAGE> 116
JUNO LIGHTING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Company's Stock Option Plan and $4.88, $4.77 and $5.08, respectively, under the
Company's Stock Purchase Plan. The fair value of the Company's stock-based
awards was estimated assuming the following weighted average assumptions:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Expected life (in years).................................... 8 8 8
Expected volatility......................................... 35.9% 35.9% 38.2%
Dividend yield.............................................. 2.0% 2.0% 2.0%
Risk free interest rate..................................... 4.7% 6.0% 6.3%
</TABLE>
Had the Company recorded compensation based on the estimated grant date
fair value, as defined by SFAS 123, for awards granted under its stock-based
compensation plans, the Company's net income and net income per share would have
been reduced to the pro forma amounts below for the years ended November 30,
1998, 1997 and 1996:
<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
(IN THOUSANDS EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C> <C>
Net income as reported.................................... $26,625 $20,303 $19,897
Pro forma net income...................................... 26,551 20,223 19,866
Earnings per share as reported (basic & diluted).......... $ 1.43 $ 1.10 $ 1.08
Pro forma earnings per share (basic & diluted)............ 1.43 1.09 1.07
</TABLE>
The pro forma effect on net income and earnings per common share for 1998,
1997 and 1996 is not representative of the pro forma effect on net income in
future years because it does not take into consideration pro forma compensation
expense related to grants made prior to fiscal 1996.
PROFIT SHARING PLAN
The Company has a profit sharing plan pursuant to Section 401(k) of the
Internal Revenue Code, whereby participants may contribute a percentage of
compensation, but not in excess of the maximum allowed under the Code. The plan
provides for a matching contribution by the Company which amounted to
approximately $195,000, $181,000 and $163,000 in 1998, 1997, and 1996,
respectively. In addition, the Company may make additional contributions at the
discretion of the Board of Directors. The Board authorized additional
contributions of $807,000, $598,000, and $569,000 in 1998, 1997 and 1996,
respectively.
COMMON SHARES
Pursuant to a dividend distribution declared by the Board of Directors in
1989, each common share outstanding has one non-voting common share purchase
right. The rights, which are exercisable only under certain conditions, entitle
the holder to purchase common shares at prices specified in the Rights
Agreement. These rights expire on August 3, 1999.
F-14
<PAGE> 117
JUNO LIGHTING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
COMMITMENTS AND CONTINGENCIES
Total minimum rentals under noncancelable operating leases for distribution
warehouse space and equipment at November 30, 1998 are as follows:
<TABLE>
<CAPTION>
NOVEMBER 30,
--------------
(IN THOUSANDS)
<S> <C>
1999........................................................ $1,104
2000........................................................ 843
2001........................................................ 428
2002........................................................ 310
2003........................................................ 129
------
Total....................................................... $2,814
======
</TABLE>
Total rent expense charged to operations amounted to approximately
$874,000, $823,000, and $897,000 for the years ended November 30, 1998, 1997 and
1996, respectively. In the ordinary course of business, there are various claims
and lawsuits brought by or against the Company. In the opinion of management,
the ultimate outcome of these matters will not materially affect the Company's
operations or financial position.
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
A summary of selected quarterly information for 1998 and 1997 is as
follows:
<TABLE>
<CAPTION>
1998 QUARTER ENDED
------------------------------------------------
FEB. 28 MAY 31 AUG. 31 NOV. 30 TOTAL*
------- ------- ------- ------- --------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Net sales.................................. $34,386 $40,846 $44,419 $41,290 $160,941
Gross profit............................... 16,770 20,501 22,850 20,938 81,059
Net income................................. 4,766 6,822 8,050 6,988 26,625
Net income per common share (basic and
diluted)................................. $ .26 $ .37 $ .43 $ .37 $ 1.43
</TABLE>
- ---------------
* Due to rounding differences, the totals for the fiscal year ended November 30,
1998 may not equal the sum of the respective items for the four quarters then
ended.
<TABLE>
<CAPTION>
1997 QUARTER ENDED
------------------------------------------------
FEB. 28 MAY 31 AUG. 31 NOV. 30 TOTAL
------- ------- ------- ------- --------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Net sales.................................. $30,804 $35,832 $37,238 $35,981 $139,855
Gross profit............................... 14,351 17,024 18,767 17,832 67,974
Net income................................. 3,890 5,298 5,812 5,303 20,303
Net income per common share (basic and
diluted)................................. $ .21 $ .29 $ .31 $ .29 $ 1.10
</TABLE>
GUARANTORS' FINANCIAL INFORMATION
The Company is planning to issue and register $125 million of Series B
Senior Subordinated Notes at 11 7/8% (the "Senior Subordinated Notes") under the
Securities Act of 1933, as amended (the "Act"). Pursuant to the registration and
issuance of the Senior Subordinated Notes under the Act, the Company's
F-15
<PAGE> 118
JUNO LIGHTING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GUARANTORS' FINANCIAL INFORMATION (CONTINUED)
domestic subsidiaries, Juno Manufacturing, Inc., Indy Lighting, Inc. and
Advanced Fiberoptic Technologies, Inc., will provide full and unconditional
senior subordinated guarantees for the Senior Subordinated Notes on a joint and
several basis.
Following is consolidating condensed financial information pertaining to
the Company ("Parent") and its subsidiary guarantors and subsidiary
non-guarantors.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED NOVEMBER 30, 1998
-------------------------------------------------------------------------
(IN THOUSANDS)
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales........................... $124,945 $102,924 $9,493 $(76,421) $160,941
Cost of sales....................... 77,837 63,029 7,563 (68,547) 79,882
-------- -------- ------ -------- --------
Gross profit........................ 47,108 39,895 1,930 (7,874) 81,059
Selling, general and
administrative.................... 27,400 14,855 1,686 142 44,083
-------- -------- ------ -------- --------
Operating income.................... 19,708 25,040 244 (8,016) 36,976
Other income (expense).............. 3,806 615 (144) 4 4,281
-------- -------- ------ -------- --------
Income before taxes on income....... 23,514 25,655 100 (8,012) 41,257
Taxes on income..................... 4,990 9,591 60 (9) 14,632
-------- -------- ------ -------- --------
Net income.......................... $ 18,524 $ 16,064 $ 40 $ (8,003) $ 26,625
======== ======== ====== ======== ========
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED NOVEMBER 30, 1997
-------------------------------------------------------------------------
(IN THOUSANDS)
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales........................... $109,684 $30,099 $8,643 $(8,571) $139,855
Cost of sales....................... 55,547 18,421 6,672 (8,759) 71,881
-------- ------- ------ ------- --------
Gross profit........................ 54,137 11,678 1,971 188 67,974
Selling, general and
administrative.................... 30,773 7,816 1,821 191 40,601
-------- ------- ------ ------- --------
Operating income.................... 23,364 3,862 150 (3) 27,373
Other income (expense).............. 3,227 953 (156) (4) 4,020
-------- ------- ------ ------- --------
Income (loss) before taxes on
income............................ 26,591 4,815 (6) (7) 31,393
Taxes on income..................... 9,247 1,839 9 (5) 11,090
-------- ------- ------ ------- --------
Net income (loss)................... $ 17,344 $ 2,976 $ (15) $ (2) $ 20,303
======== ======= ====== ======= ========
</TABLE>
F-16
<PAGE> 119
GUARANTORS' FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED NOVEMBER 30, 1996
-------------------------------------------------------------------------
(IN THOUSANDS)
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales........................... $101,869 $31,139 $7,774 $(9,303) $131,479
Cost of sales....................... 52,531 19,041 6,131 (9,384) 68,319
-------- ------- ------ ------- --------
Gross profit........................ 49,338 12,098 1,643 81 63,160
Selling, general and
administrative.................... 27,498 7,352 1,727 189 36,766
-------- ------- ------ ------- --------
Operating income (loss)............. 21,840 4,746 (84) (108) 26,394
Other income (expense).............. 3,735 144 (161) -- 3,718
-------- ------- ------ ------- --------
Income (loss) before taxes on
income............................ 25,575 4,890 (245) (108) 30,112
Taxes on income..................... 8,241 2,086 (97) (15) 10,215
-------- ------- ------ ------- --------
Net income (loss)................... $ 17,334 $ 2,804 $ (148) $ (93) $ 19,897
======== ======= ====== ======= ========
</TABLE>
<TABLE>
<CAPTION>
NOVEMBER 30, 1998
-------------------------------------------------------------------------
(IN THOUSANDS)
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash................................ $ 9,066 $ 1,054 $ 349 $ 29 $ 10,498
Marketable securities............... 77,836 -- -- -- 77,836
Accounts receivable, net............ 71,605 94,485 1,412 (142,925) 24,577
Inventories......................... 19,528 15,472 1,354 (8,239) 28,115
Other current assets................ 4,222 769 50 -- 5,041
-------- -------- ------ --------- --------
Total current assets........... 182,257 111,780 3,165 (151,135) 146,067
Property and equipment.............. 10,107 49,330 2,521 (431) 61,527
Less accumulated depreciation....... (1,900) (13,422) (350) 321 (15,351)
-------- -------- ------ --------- --------
Net property and equipment..... 8,207 35,908 2,171 (110) 46,176
Other assets........................ 76,798 59 -- (60,261) 16,596
-------- -------- ------ --------- --------
Total assets........................ $267,262 $147,747 $5,336 $(211,506) $208,839
======== ======== ====== ========= ========
Current liabilities................. $ 95,706 $ 57,945 $1,903 $(142,896) $ 12,658
Other liabilities................... 4,646 -- 2,204 (2,117) 4,733
-------- -------- ------ --------- --------
Total liabilities................... 100,352 57,945 4,107 (145,013) 17,391
Total stockholders' equity.......... 166,910 89,802 1,229 (66,493) 191,448
-------- -------- ------ --------- --------
Total liabilities and stockholders'
equity............................ $267,262 $147,747 $5,336 $(211,506) $208,839
======== ======== ====== ========= ========
</TABLE>
F-17
<PAGE> 120
GUARANTORS' FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
NOVEMBER 30, 1997
-------------------------------------------------------------------------
(IN THOUSANDS)
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash................................ $ 4,880 $ 1,646 $ 157 $ 123 $ 6,806
Marketable securities............... 65,766 -- -- -- 65,766
Accounts receivable, net............ 20,475 15,567 1,354 (14,863) 22,533
Inventories......................... 17,419 4,247 1,285 (244) 22,707
Other current assets................ 4,407 126 41 122 4,696
-------- ------- ------ -------- --------
Total current assets........... 112,947 21,586 2,837 (14,862) 122,508
Property and equipment.............. 50,269 3,786 2,712 (431) 56,336
Less accumulated depreciation....... (9,318) (2,579) (308) 318 (11,887)
-------- ------- ------ -------- --------
Net property and equipment..... 40,951 1,207 2,404 (113) 44,449
Other assets........................ 26,775 4,390 -- (10,733) 20,432
-------- ------- ------ -------- --------
Total assets........................ $180,673 $27,183 $5,241 $(25,708) $187,389
======== ======= ====== ======== ========
Current liabilities................. $ 21,708 $ 2,965 $1,572 $(14,613) $ 11,632
Other liabilities................... 5,031 -- 2,229 (2,133) 5,127
-------- ------- ------ -------- --------
Total liabilities................... 26,739 2,965 3,801 (16,746) 16,759
Total stockholders' equity.......... 153,934 24,218 1,440 (8,962) 170,630
-------- ------- ------ -------- --------
Total liabilities and stockholders'
equity............................ $180,673 $27,183 $5,241 $(25,708) $187,389
======== ======= ====== ======== ========
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED NOVEMBER 30, 1998
----------------------------------------------------------------------------
(IN THOUSANDS)
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES(1) SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- --------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by operating
activities..................... $ 20,301 $ 2,068 $207 $ (9) $ 22,567
-------- ------- ---- ----- --------
Cash flows provided by (used in)
investing activities
Capital expenditures........... (2,533) (2,760) -- -- (5,293)
Proceeds from sale of assets... 4,605 -- -- -- 4,605
Capital contributions.......... -- 100 10 (110) --
Purchases of marketable
securities.................. (47,089) -- -- -- (47,089)
Sales of marketable
securities.................. 35,140 -- -- -- 35,140
-------- ------- ---- ----- --------
Net cash provided by (used in)
investing activities........... (9,877) (2,660) 10 (110) (12,637)
-------- ------- ---- ----- --------
Cash provided by (used in)
financing activities
Dividends paid................. (6,686) -- -- -- (6,686)
Other financing activities..... 448 -- (24) 24 448
-------- ------- ---- ----- --------
Net cash used in financing
activities..................... (6,238) -- (24) 24 (6,238)
-------- ------- ---- ----- --------
Net increase (decrease) in
cash........................... 4,186 (592) 193 (95) 3,692
Cash at beginning of period...... 4,880 1,646 157 123 6,806
-------- ------- ---- ----- --------
Cash at end of period............ $ 9,066 $ 1,054 $350 $ 28 $ 10,498
======== ======= ==== ===== ========
</TABLE>
- -------------------------
(1) In June 1998, the Company capitalized its guarantor subsidiary, Juno
Manufacturing, Inc., with a non-cash transfer of $49,415 of net assets
principally consisting of property and equipment and inventory.
F-18
<PAGE> 121
GUARANTORS' FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED NOVEMBER 30, 1997
-------------------------------------------------------------------------
(IN THOUSANDS)
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by operating
activities........................ $ 15,962 $1,062 $124 $ 52 $ 17,200
-------- ------ ---- ---- --------
Cash flows provided by (used in)
investing activities
Capital expenditures.............. (13,112) (114) -- -- (13,226)
Proceeds from sale of assets...... 4,322 -- -- -- 4,322
Purchases of marketable
securities..................... (22,514) -- -- -- (22,514)
Sales of marketable securities.... 23,807 -- -- -- 23,807
-------- ------ ---- ---- --------
Net cash used in investing
activities........................ (7,497) (114) -- -- (7,611)
-------- ------ ---- ---- --------
Cash flows provided by (used in)
financing activities
Dividends paid.................... (5,925) -- -- -- (5,925)
Other financing activities........ (331) -- (22) 22 (331)
-------- ------ ---- ---- --------
Net cash used in financing
activities........................ (6,256) -- (22) 22 (6,256)
-------- ------ ---- ---- --------
Net increase in cash................ 2,209 948 102 74 3,333
Cash at beginning of period......... 2,671 698 55 49 3,473
-------- ------ ---- ---- --------
Cash at end of period............... $ 4,880 $1,646 $157 $123 $ 6,806
======== ====== ==== ==== ========
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED NOVEMBER 30, 1996
-------------------------------------------------------------------------
(IN THOUSANDS)
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by operating
activities........................ $ 21,494 $ 555 $ 88 $25 $ 22,162
-------- ----- ---- --- --------
Cash flows provided by (used in)
investing activities
Capital expenditures.............. (12,860) (380) (76) -- (13,316)
Proceeds from sale of assets...... -- -- -- --
Purchases of marketable
securities..................... (43,226) -- -- -- (43,226)
Sales of marketable securities.... 37,531 -- -- -- 37,531
-------- ----- ---- --- --------
Net cash used in investing
activities........................ (18,555) (380) (76) -- (19,011)
-------- ----- ---- --- --------
Cash flows provided by (used in)
financing activities
Dividends paid.................... (5,903) -- -- -- (5,903)
Other financing activities........ (294) -- (22) 22 (294)
-------- ----- ---- --- --------
Net cash used in financing
activities........................ (6,197) -- (22) 22 (6,197)
-------- ----- ---- --- --------
Net increase (decrease) in cash..... (3,258) 175 (10) 47 (3,046)
Cash at beginning of period......... 5,929 523 65 2 6,519
-------- ----- ---- --- --------
Cash at end of period............... $ 2,671 $ 698 $ 55 $49 $ 3,473
======== ===== ==== === ========
</TABLE>
F-19
<PAGE> 122
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------
MAY 31, MAY 31,
1999 1998
----------- -----------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS EXCEPT PER
SHARE AMOUNTS)
<S> <C> <C>
Net sales................................................... $45,504 $40,846
Cost of sales............................................... 23,477 20,345
------- -------
Gross profit.............................................. 22,027 20,501
Selling, general and administrative......................... 11,876 10,873
------- -------
Operating income.......................................... 10,151 9,628
Other income................................................ 1,136 1,141
------- -------
Income before taxes on income............................. 11,287 10,769
Taxes on income............................................. 3,981 3,947
------- -------
Net income.................................................. $ 7,306 $ 6,822
======= =======
Net income per common share -- basic........................ $ .39 $ .37
======= =======
Net income per common share -- diluted...................... $ .39 $ .37
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-20
<PAGE> 123
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
SIX MONTHS ENDED
--------------------------
MAY 31, MAY 31,
1999 1998
----------- -----------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS EXCEPT PER
SHARE AMOUNTS)
<S> <C> <C>
Net sales................................................... $82,781 $75,232
Cost of sales............................................... 42,032 37,961
------- -------
Gross profit.............................................. 40,749 37,271
Selling, general and administrative......................... 22,672 21,341
------- -------
Operating income.......................................... 18,077 15,930
Other income................................................ 2,395 2,071
------- -------
Income before taxes on income............................. 20,472 18,001
Taxes on income............................................. 7,157 6,414
------- -------
Net income.................................................. $13,315 $11,587
======= =======
Net income per common share -- basic........................ $ .72 $ .62
======= =======
Net income per common share -- diluted...................... $ .71 $ .62
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-21
<PAGE> 124
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MAY 31, NOVEMBER 30,
1999 1998
-------- ------------
(UNAUDITED) (UNAUDITED)
(DOLLARS IN THOUSANDS
EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 28,232 $ 10,498
Marketable securities..................................... 74,485 77,836
Accounts receivable, less allowance for possible losses of
$1,240 and $1,205...................................... 28,515 24,577
Inventories at lower of cost or market.................... 29,318 28,115
Prepaid expenses and miscellaneous........................ 4,319 5,041
-------- --------
Total current assets.............................. 164,869 146,067
-------- --------
Property, plant and equipment,
less accumulated depreciation of $17,346 and $15,351...... 47,313 46,176
-------- --------
Other assets:
Marketable securities.................................. 0 12,049
Goodwill and other intangibles, net of accumulated
amortization of $1,698 and $1,536..................... 4,348 3,940
Miscellaneous.......................................... 1,069 607
-------- --------
Total other assets................................ 5,417 16,596
-------- --------
$217,599 $208,839
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 6,548 $ 4,441
Accrued liabilities....................................... 5,775 8,217
-------- --------
Total current liabilities......................... 12,323 12,658
-------- --------
Long-term debt and deferred income taxes.................... 4,859 4,733
-------- --------
Stockholders' equity:
Common stock, $.01 par value, shares authorized
50,000,000; outstanding 18,617,227 and 18,595,327...... 186 186
Paid-in capital........................................... 5,864 5,484
Accumulated other comprehensive income.................... (402) 604
Retained earnings......................................... 194,769 185,174
-------- --------
Total stockholders' equity........................ 200,417 191,448
-------- --------
$217,599 $208,839
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-22
<PAGE> 125
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF RETAINED EARNINGS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1999
----------------
(UNAUDITED)
(DOLLARS IN THOUSANDS
EXCEPT PER SHARE AMOUNT)
<S> <C>
Retained earnings, beginning of period............. $185,174
Cash dividend ($.20 per share)..................... (3,720)
Net income, six months ended May 31, 1999.......... 13,315
--------
Retained earnings, end of period................... $194,769
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-23
<PAGE> 126
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
--------------------------
MAY 31, MAY 31,
1999 1998
----------- -----------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Cash flows provided by (used in) operating activities:
Net income................................................ $ 13,315 $ 11,587
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation & amortization............................ 2,076 1,842
Gain on sale of assets................................. -- (175)
Changes in assets and liabilities:
(Increase) in accounts receivable.................... (3,819) (4,070)
(Increase) in inventory.............................. (1,203) (3,007)
Decrease in prepaid expense.......................... 1,297 520
(Increase) in other assets........................... (950) (41)
Increase (decrease) in accounts payable and accrued
expenses............................................ (335) 662
Deferred income taxes................................ 186 33
-------- --------
Net cash provided by operating activities:.................. 10,567 7,351
-------- --------
Cash flows provided by (used in) investing activities:
Proceeds on sale of building.............................. -- 4,601
Capital expenditures...................................... (3,133) (2,536)
Purchases of marketable securities........................ (63,966) (26,093)
Sales of marketable securities............................ 77,666 15,500
-------- --------
Net cash provided by (used in) investing activities......... 10,567 (8,528)
-------- --------
Cash flows provided by (used in) financing activities:
Proceeds from exercise of stock options................... 380 249
Dividend paid............................................. (3,720) (3,341)
Principal payments on long-term debt...................... (60) (58)
-------- --------
Net cash (used in) financing activities................ (3,400) (3,150)
-------- --------
Net increase (decrease) in cash............................. 17,734 (4,327)
Cash at beginning of period................................. 10,498 6,806
-------- --------
Cash at end of period....................................... $ 28,232 $ 2,479
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest............................................... $ 62 $ 78
Income taxes........................................... 7,114 5,810
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-24
<PAGE> 127
JUNO LIGHTING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL INFORMATION
The financial information presented in these consolidated financial
statements is unaudited but, in the opinion of management, reflects all normal
adjustments necessary for the fair presentation of the Company's financial
position, results of its operations and cash flows. The information in the
condensed consolidated balance sheet as of November 30, 1998 was derived from
the Company's audited consolidated financial statements.
INVENTORIES
Inventories are summarized as follows:
<TABLE>
<CAPTION>
MAY 31, NOVEMBER 30,
1999 1998
------- ------------
(IN THOUSANDS)
<S> <C> <C>
Finished goods.............................................. $13,204 $13,164
Raw materials............................................... 16,114 14,951
------- -------
$29,318 $28,115
======= =======
</TABLE>
NET INCOME PER COMMON SHARE
Basic earnings per share is calculated by dividing net income by the
weighted average number of common shares outstanding. Diluted earnings per share
is calculated by dividing net income by the weighted average number of common
shares outstanding including assumed exercise of dilutive stock options during
the periods. Such weighted average number of shares outstanding is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------- ------------------------
MAY 31, MAY 31, MAY 31, MAY 31,
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Basic....................................... 18,602,077 18,564,020 18,599,184 18,562,199
Diluted..................................... 18,653,666 18,608,016 18,654,308 18,594,120
</TABLE>
COMPREHENSIVE INCOME
As of December 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130). The
adoption of this Statement had no impact on the Company's net income or
stockholders' equity. SFAS 130 establishes new rules for the reporting and
display of comprehensive income and its components. SFAS 130 requires foreign
currency translation adjustments and unrealized gains or losses on the Company's
available-for-sale securities to be included in other comprehensive income.
Prior to the adoption of SFAS 130, the Company reported such adjustments and
unrealized gains or losses separately in stockholders' equity. Amounts in prior
year financial statements have been reclassified to conform to SFAS 130.
F-25
<PAGE> 128
JUNO LIGHTING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The components of comprehensive income, net of related tax, are as follows
(in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MAY 31, MAY 31,
------------------ ------------------
1999 1998 1999 1998
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net income.......................................... $7,306 $6,822 $13,315 $11,587
Net change in unrealized gain (loss) on
available-for-sale securities..................... (913) 153 (1,125) 358
Foreign currency translation adjustment............. 64 (87) 118 (84)
------ ------ ------- -------
Comprehensive income.............................. $6,457 $6,888 $12,308 $11,861
====== ====== ======= =======
</TABLE>
The components of accumulated other comprehensive income, net of related
tax, are as follows (in thousands):
<TABLE>
<CAPTION>
MAY 31, NOVEMBER 30,
1999 1998
------- ------------
<S> <C> <C>
Unrealized gain on available-for-sale securities............ $ 135 $1,259
Foreign currency translation adjustment..................... (537) (655)
----- ------
Accumulated other comprehensive income.................... $(402) $ 604
===== ======
</TABLE>
GUARANTORS' FINANCIAL INFORMATION
The Company is planning to issue and register $125 million of Series B
Senior Subordinated Notes at 11 7/8% (the "Senior Subordinated Notes") under the
Securities Act of 1933, as amended (the "Act"). Pursuant to the registration and
issuance of the Senior Subordinated Notes under the Act, the Company's domestic
subsidiaries, Juno Manufacturing, Inc., Indy Lighting, Inc. and Advanced
Fiberoptic Technologies, Inc., will provide full and unconditional senior
subordinated guarantees for the Senior Subordinated Notes on a joint and several
basis.
Following is consolidating condensed financial information pertaining to
the Company ("Parent") and its subsidiary guarantors and subsidiary
non-guarantors.
F-26
<PAGE> 129
GUARANTORS' FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED MAY 31, 1999
------------------------------------------------------------------------
(IN THOUSANDS)
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales............................ $65,433 $68,037 $4,772 $(55,461) $82,781
Cost of sales........................ 51,298 41,971 4,197 (55,434) 42,032
------- ------- ------ -------- -------
Gross profit......................... 14,135 26,066 575 (27) 40,749
Selling, general and
administrative..................... 11,394 10,314 909 55 22,672
------- ------- ------ -------- -------
Operating income (loss).............. 2,741 15,752 (334) (82) 18,077
Other income (expense)............... 2,179 282 (66) -- 2,395
------- ------- ------ -------- -------
Income (loss) before taxes on
income............................. 4,920 16,034 (400) (82) 20,472
Taxes on income...................... 1,631 5,700 (172) (2) 7,157
------- ------- ------ -------- -------
Net income........................... $ 3,289 $10,334 $ (228) $ (80) $13,315
======= ======= ====== ======== =======
</TABLE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED MAY 31, 1998
------------------------------------------------------------------------
(IN THOUSANDS)
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales............................ $59,941 $15,883 $4,073 $(4,665) $75,232
Cost of sales........................ 30,133 9,333 3,183 (4,688) 37,961
------- ------- ------ ------- -------
Gross profit......................... 29,808 6,550 890 23 37,271
Selling, general and
administrative..................... 15,860 4,620 778 83 21,341
------- ------- ------ ------- -------
Operating income..................... 13,948 1,930 112 (60) 15,930
Other income (expense)............... 1,738 400 (74) 7 2,071
------- ------- ------ ------- -------
Income before taxes on income........ 15,686 2,330 38 (53) 18,001
Taxes on income...................... 5,379 1,018 22 (5) 6,414
------- ------- ------ ------- -------
Net income........................... $10,307 $ 1,312 $ 16 $ (48) $11,587
======= ======= ====== ======= =======
</TABLE>
F-27
<PAGE> 130
GUARANTORS' FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
MAY 31, 1999
-------------------------------------------------------------------------
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash................................ $ 28,044 $ (287) $ 96 $ 379 $ 28,232
Marketable securities............... 74,485 -- -- -- 74,485
Accounts receivable, net............ 124,801 154,237 1,899 (252,422) 28,515
Inventories......................... 18,461 17,710 1,463 (8,316) 29,318
Other current assets................ 3,473 779 67 -- 4,319
-------- -------- ------ --------- --------
Total current assets........... 249,264 172,439 3,525 (260,359) 164,869
Property and equipment.............. 10,195 52,451 2,435 (422) 64,659
Less accumulated depreciation....... (2,064) (15,210) (395) 323 (17,346)
-------- -------- ------ --------- --------
Net property and equipment..... 8,131 37,241 2,040 (99) 47,313
Other assets........................ 64,664 1,007 -- (60,254) 5,417
-------- -------- ------ --------- --------
Total assets........................ $322,059 $210,687 $5,565 $(320,712) $217,599
======== ======== ====== ========= ========
Current liabilities................. $151,549 $110,553 $2,255 $(252,034) $ 12,323
Other liabilities................... 4,775 -- 2,191 (2,107) 4,859
-------- -------- ------ --------- --------
Total liabilities................... 156,324 110,553 4,446 (254,141) 17,182
Total stockholders' equity.......... 165,735 100,134 1,119 (66,571) 200,417
-------- -------- ------ --------- --------
Total liabilities and stockholders'
equity............................ $322,059 $210,687 $5,565 $(320,712) $217,599
======== ======== ====== ========= ========
</TABLE>
<TABLE>
<CAPTION>
NOVEMBER 30, 1998
-------------------------------------------------------------------------
(IN THOUSANDS)
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash................................ $ 9,066 $ 1,054 $ 349 $ 29 $ 10,498
Marketable securities............... 77,836 -- -- -- 77,836
Accounts receivable, net............ 71,605 94,485 1,412 (142,925) 24,577
Inventories......................... 19,528 15,472 1,354 (8,239) 28,115
Other current assets................ 4,222 769 50 -- 5,041
-------- -------- ------ --------- --------
Total current assets........... 182,257 111,780 3,165 (151,135) 146,067
Property and equipment.............. 10,107 49,330 2,521 (431) 61,527
Less accumulated depreciation....... (1,900) (13,422) (350) 321 (15,351)
-------- -------- ------ --------- --------
Net property and equipment..... 8,207 35,908 2,171 (110) 46,176
Other assets........................ 76,798 59 -- (60,261) 16,596
-------- -------- ------ --------- --------
Total assets........................ $267,262 $147,747 $5,336 $(211,506) $208,839
======== ======== ====== ========= ========
Current liabilities................. $ 95,706 $ 57,945 $1,903 $(142,896) $ 12,658
Other liabilities................... 4,646 -- 2,204 (2,117) 4,733
-------- -------- ------ --------- --------
Total liabilities................... 100,352 57,945 4,107 (145,013) 17,391
Total stockholders' equity.......... 166,910 89,802 1,229 (66,493) 191,448
-------- -------- ------ --------- --------
Total liabilities and stockholders'
equity............................ $267,262 $147,747 $5,336 $(211,506) $208,839
======== ======== ====== ========= ========
</TABLE>
F-28
<PAGE> 131
GUARANTORS' FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED MAY 31, 1999
-------------------------------------------------------------------------
(IN THOUSANDS)
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities.............. $ 8,789 $1,558 $(117) $337 $10,567
-------- ------ ----- ---- -------
Cash flows provided by (used in)
investing activities
Capital expenditures.............. (112) (2,898) (123) -- (3,133)
Purchases of marketable
securities..................... (63,966) -- -- -- (63,966)
Sales of marketable securities.... 77,666 -- -- -- 77,666
-------- ------ ----- ---- -------
Net cash provided by (used in)
investing activities.............. 13,588 (2,898) (123) -- 10,567
-------- ------ ----- ---- -------
Cash flows provided by (used in)
financing activities
Dividends paid.................... (3,720) -- -- -- (3,720)
Other financing activities........ 320 -- (13) 13 320
-------- ------ ----- ---- -------
Net cash provided used in financing
activities........................ (3,400) -- (13) 13 (3,400)
-------- ------ ----- ---- -------
Net increase (decrease) in cash..... 18,977 (1,340) (253) 350 17,734
Cash at beginning of period......... 9,066 1,054 349 29 10,498
-------- ------ ----- ---- -------
Cash at end of period............... $ 28,043 $ (286) $ 96 $379 $28,232
======== ====== ===== ==== =======
</TABLE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED MAY 31, 1998
-------------------------------------------------------------------------
(IN THOUSANDS)
GUARANTOR NON-GUARANTOR TOTAL
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities.............. $ 8,377 $ (827) $(64) $(135) $ 7,351
-------- ------- ---- ----- --------
Cash flows provided by (used in)
investing activities
Capital expenditures.............. (2,350) (186) -- -- (2,536)
Proceeds from sale of assets...... 4,601 -- -- -- 4,601
Purchases of marketable
securities..................... (26,093) -- -- -- (26,093)
Sales of marketable securities.... 15,500 -- -- -- 15,500
-------- ------- ---- ----- --------
Net cash used in investing
activities........................ (8,342) (186) -- -- (8,528)
-------- ------- ---- ----- --------
Cash flows provided by (used in)
financing activities
Dividends paid.................... (3,341) -- -- -- (3,341)
Other financing activities........ 191 -- (12) 12 191
-------- ------- ---- ----- --------
Net cash provided by (used in)
financing activities.............. (3,150) -- (12) 12 (3,150)
-------- ------- ---- ----- --------
Net decrease in cash................ (3,115) (1,013) (76) (123) (4,327)
Cash at beginning of period......... 4,880 1,646 157 123 6,806
-------- ------- ---- ----- --------
Cash at end of period............... $ 1,765 $ 633 $ 81 $ -- $ 2,479
======== ======= ==== ===== ========
</TABLE>
F-29
<PAGE> 132
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$125,000,000
(JUNO LIGHTING LOGO)
EXCHANGE OFFER
117/8% SENIOR SUBORDINATED NOTES DUE 2009
------------------------------
PROSPECTUS
------------------------------
September , 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNTIL SEPTEMBER , 1999, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE
SECURITIES. WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
<PAGE> 133
PART II: INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As authorized by the Delaware General Corporation Law ("DGCL"), the
Certificate of Incorporation of Juno provides that no director of Juno shall be
personally liable to Juno or its stockholders for monetary damages for any
breach of fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to Juno or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violating of law, (iii) under Section 174 of the DGCL (relating to any willful
or negligent declaration of an unlawful dividend, stock purchase or redemption)
or (iv) for any transaction from which the director derived any improper
personal benefits. The effect of this provision is to eliminate the rights of
Juno and its stockholders (through stockholders' derivative suits on behalf of
Juno) to recover monetary damages against a director for breach of his fiduciary
duty as a director (including breaches resulting from grossly negligent
behavior), except in the situations described above. This provision does not
limit the liability of directors under federal securities laws and have no
effect on non-monetary remedies that may be available to Juno or its
stockholders.
The By-Laws of Juno provides for indemnification by Juno of its directors
and officers to the fullest extent permitted by the DGCL. The By-Laws also
provide that Juno may advance litigation expenses to a director, officer,
employee or agent upon receipt of an undertaking by or on behalf of such
director, officer, employee or agent to repay such amount if it is ultimately
determined that the director, officer, employee or agent is not entitled to be
indemnified by Juno.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT DESCRIPTION
- ----------- -------------------
<S> <C>
1.1 Purchase Agreement dated June 24, 1999 by and among Juno
Lighting, Inc., Juno Manufacturing, Inc., Indy Lighting,
Inc., Advanced Fiberoptic Technologies, Inc., Banc of
America Securities LLC and Credit Suisse First Boston
Corporation.
3.1 Amended and Restated Certificate of Incorporation of Juno.
3.2 By-Laws of Juno Lighting, Inc., as amended. Filed as Exhibit
3.1 to the Company's Annual Report on Form 10-K (File No.
0-11631) for the fiscal year ended November 30, 1990 and
incorporated herein by reference.
3.2(a) Amendment to By-Laws of Juno Lighting, Inc. Filed as Exhibit
3.1 to the Company's quarterly report on Form 10-Q (File No.
0-11631) for the quarter ended May 31, 1991 and incorporated
herein by reference.
4.1 Indenture, dated as of June 30, 1999, by and among Juno
Lighting, Inc., Juno Manufacturing, Inc., Indy Lighting,
Inc., Advanced Fiberoptic Technologies, Inc. and Firstar
Bank of Minnesota, N.A., as Trustee for the 11 7/8% Senior
Subordinated Notes due 2009.
4.2 Registration Rights Agreement, dated as of June 30, 1999, by
and among Juno Lighting, Inc., Juno Manufacturing, Inc.,
Indy Lighting, Inc., Advanced Fiberoptic Technologies, Inc.,
Banc of America Securities LLC and Credit Suisse First
Boston Corporation.
5.1* Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
the legality of the new notes.
10.1 Juno Lighting, Inc. 1993 Stock Option Plan, as amended.
Filed as Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q (File No. 0-11631) for the quarter ended May 31,
1994 and incorporated herein by reference.
10.2 Loan Agreement dated as of December 1, 1991 by and between
Juno Lighting, Inc. and the Indiana Development Finance
Authority. Filed as Exhibit 10.1 to the Company's Annual
Report on Form 10-K (File No. 0-11631) for the fiscal year
ended November 30, 1992 and incorporated herein by
reference.
</TABLE>
II-1
<PAGE> 134
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT DESCRIPTION
- ----------- -------------------
<S> <C>
10.2(a) Trust Indenture dated as of December 1, 1991 by and between
the Indiana Development Finance Authority and First
Wisconsin Trust Company, as Trustee, with respect to
Industrial Development Revenue Bonds, Series 1991 (Juno
Lighting, Inc. Project). Filed as Exhibit 10.1(a) to the
Company's Annual Report on Form 10-K (File No. 0-11631) for
the fiscal year ended November 30, 1992 and incorporated
herein by reference.
10.3 Agreement among Juno Lighting, Inc., the City of Des Plaines
and American National Bank and Trust Company of Chicago.
Filed as Exhibit 10.1 to the Company's Registration
Statement on Form S-1, made effective September 1, 1983
(Registration No. 2-85267) and incorporated herein by
reference.
10.4 Juno Lighting, Inc. 1983 Stock Option Plan, as amended.
Filed as Exhibit 10.1 to the Company's Annual Report on Form
10-K (File No. 0-11631) for the fiscal year ended November
30, 1983 and incorporated herein by reference.
10.4(a) First Amendment to the Juno Lighting, Inc. 1983 Stock Option
Plan dated April 9, 1986. Filed as Exhibit 10.2(a) to the
Company's Annual Report on Form 10-K (File No. 0-11631) for
the fiscal year ended November 30, 1986 and incorporated
herein by reference.
10.4(b) Third Amendment to the Juno Lighting, Inc. 1983 Stock Option
Plan dated May 6, 1987. Filed as Exhibit 10.2(b) to the
Company's Annual Report on Form 10-K (File No. 0-11631) for
the fiscal year ended November 30, 1987 and incorporated
herein by reference.
10.4(c) Fourth Amendment to the Juno Lighting, Inc. 1983 Stock
Option Plan dated September 24, 1987. Filed as Exhibit
10.2(c) to the Company's Annual Report on Form 10-K (File
No. 0-11631) for the fiscal year ended November 30, 1987 and
incorporated herein by reference.
10.4(d) Fifth Amendment to the Juno Lighting, Inc. 1983 Stock Option
Plan dated December 3, 1988. Filed as Exhibit 10.2(d) to the
Company's Annual Report on Form 10-K (File No. 0-11631) for
the fiscal year ended November 30, 1988 and incorporated
herein by reference.
10.5 Agreement dated as of July 1, 1984 among Juno Lighting,
Inc., the City of Des Plaines, Illinois and American
National Bank and Trust Company of Chicago. Filed as Exhibit
10.1(b) to the Company's Registration Statement on Form S-1,
made effective December 13, 1984 (Registration No. 2-94147)
and incorporated herein by reference.
10.6 Juno Lighting, Inc. 401(k) Plan, Amended and Restated
effective December 1, 1987, executed June 1, 1994. Filed as
an exhibit to the Company's Annual Report on Form 10-K (File
No. 0-11631) for the fiscal year ended November 30, 1988 and
incorporated herein by reference.
10.6(a) Juno Lighting, Inc. 401(k) Trust, effective December 1,
1985, executed June 1, 1994. Filed as an exhibit to the
Company's Annual Report on Form 10-K (File No. 0-11631) for
the fiscal year ended November 30, 1986 and incorporated
herein by reference.
10.6(b) Amendment to Juno Lighting, Inc. 401(k) Plan, effective
September 1, 1994, executed September 12, 1994. Filed as an
exhibit to the Company's Annual Report on Form 10-K (File
No. 0-11631) for the fiscal year ended November 30, 1994 and
incorporated herein by reference.
10.7 Juno Lighting, Inc. Rights Agreement dated as of August 3,
1989 between Juno Lighting, Inc. and the First National Bank
of Chicago, as Rights Agent. Filed as Exhibit 1 to the
Company's Current Report on Form 8-K (File No. 0-11631)
filed with the Securities and Exchange Commission on August
9, 1989 and incorporated herein by reference.
10.7(a) First Amendment to Juno Lighting, Inc. Rights Agreement
dated as of June 17, 1991 between Juno Lighting, Inc. and
The First National Bank of Chicago, as Rights Agent. Filed
as Exhibit 10.5(a) to the Company's Annual Report on Form
10-K (File No. 0-11631) for the fiscal year ended November
30, 1991 and incorporated herein by reference.
</TABLE>
II-2
<PAGE> 135
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT DESCRIPTION
- ----------- -------------------
<S> <C>
10.7(b) Second Amendment to Juno Lighting, Inc. Rights Agreement
dated as of June 17, 1991 between Juno Lighting, Inc. and
The First Chicago Trust Company of New York, as successor
Rights Agent to The First National Bank of Chicago. Filed as
Exhibit 1 to the Company's Current Report on Form 8-K (SEC
File No. 0-11631) filed with the Securities and Exchange
Commission on July 17, 1991 and incorporated herein by
reference.
10.7(c) Third Amendment to Juno Lighting, Inc. Rights Agreement
dated as of March 26, 1999 between Juno Lighting, Inc. and
The First Chicago Trust Company, as successor Rights Agent.
Filed as Exhibit 10.7(c) to the Company's Current Report on
Form 8-K (File No. 0-11631) filed with the Securities and
Exchange Commission on March 29, 1999 and incorporated
herein by reference.
10.8 Form of Change of Control Benefits Agreement. Filed as
Exhibit 10.8 to the Company's Annual Report on Form 10-K/A
(File No. 0-11631) for the fiscal year ended November 30,
1998, and incorporated herein by reference.
10.9 Management Services Agreement, dated as of June 30, 1999, by
and between Juno Lighting, Inc. and Fremont Partners, L.L.C.
10.10 Credit Agreement, dated as of June 29, 1999, by and among
Juno Lighting, Inc. and NationsBank, N.A., Credit Suisse
First Boston Corporation and certain other lenders party
thereto.
11.1 Computations of Net Income Per Common Share. Filed as
Exhibit 11.1 to the Company's Annual Report on Form 10-K
(File No. 011631) for the fiscal year ended November 30,
1998, and incorporated herein by reference.
12.1 Statement regarding computation of ratio of earnings to
fixed charges.
21.1 Subsidiaries of the Registrant filed as Exhibit 21.1 to the
Company's Annual Report on Form 10-K (File No. 011631) for
the fiscal year ended November 30, 1998, and incorporated
herein by reference.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2* Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1)
24.1 Powers of Attorney (included on signature page to this
Registration Statement).
25.1 Form T-1 Statement of Eligibility of Firstar Bank, N.A., as
trustee
99.1 Form of Letter of Transmittal
99.2 Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
99.3 Form of Letter to Clients
99.4 Form of Notice of Guaranteed Delivery
99.5 Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9
99.6 Financial Statement Schedule
</TABLE>
- -------------------------
*To be filed by amendment.
II-3
<PAGE> 136
(b) FINANCIAL STATEMENT SCHEDULES
All schedules have been included as Exhibit 99.6 or have been omitted as
not applicable or not required under the rules of Regulation S-X.
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% "Calculation of
Registration Fee" table in the effective registration statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering;
(4) that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) (a) that prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer undertakes that
such reoffering prospectus will contain the information called for by the
applicable registration form with respect to reofferings by persons who may
be deemed underwriters, in addition to the information called for by the
other items of the applicable form.
(b) that every prospectus: (A) that is filed pursuant to paragraph
(5)(a) immediately preceding, or (B) that purports to meet the
requirements of Section 10(a)(3) of the Act and is used in connection
with an offering of securities subject to Rule 415, will be filed as a
part of an amendment to the registration statement and will not be used
until such amendment is effective, and that, for purposes of determining
any liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to
the
II-4
<PAGE> 137
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(6) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
(a) to respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of
this Form S-4, within one business day of receipt of such request, and
to send the incorporated documents by first-class mail or other equally
prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through
the date of responding to the request.
(b) to supply by means of a post-effective amendment all
information concerning a transaction, and the company being acquired
involved therein, that was not the subject of and included in the
registration statement when it became effective.
II-5
<PAGE> 138
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Des
Plaines, State of Illinois, on the 26th day of August, 1999.
JUNO LIGHTING, INC.
By: /s/ GLENN R. BORDFELD
------------------------------------
Glenn R. Bordfeld,
President and Chief Operating
Officer
POWER OF ATTORNEY AND SIGNATURES
Each person whose individual signature appears below hereby authorizes and
appoints Mark N. Williamson and Glenn R. Bordfeld, and each of them, with full
power of substitution and resubstitution and full power to act without the
other, as his true and lawful attorney-in-fact and agent to act in his name,
place and stead and to execute in the name and on behalf of each person,
individually and in each capacity stated below, and to file, any and all
amendments to this Registration Statement, including any and all post-effective
amendments and amendments thereto and any registration statement relating to the
same offering as this Registration Statement that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing, ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their and his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated below on the 26th day of August, 1999.
<TABLE>
<C> <S>
/s/ ROBERT JAUNICH II Chairman of the Board of Directors
- ---------------------------------------------
Robert Jaunich II
/s/ MARK N. WILLIAMSON Director
- ---------------------------------------------
Mark N. Williamson
/s/ GLENN R. BORDFELD Director, President and Chief Operating Officer
- ---------------------------------------------
Glenn R. Bordfeld
</TABLE>
II-6
<PAGE> 1
EXHIBIT 1.1
Execution Copy
Juno Lighting, Inc.
Juno Manufacturing, Inc.
Indy Lighting, Inc.
Advanced Fiberoptic Technologies, Inc.
$ 125,000,000
11 7/8% Senior Subordinated Notes due 2009
Purchase Agreement
dated June 24, 1999
Banc of America Securities LLC
Credit Suisse First Boston Corporation
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
Section 1. Representations and Warranties........................................................................2
(a) No Registration Required.............................................................................2
(b) No Integration of Offerings or General Solicitation..................................................2
(c) Eligibility for Resale under Rule 144A...............................................................3
(d) The Offering Memorandum..............................................................................3
(e) Incorporated Documents...............................................................................3
(f) The Purchase Agreement...............................................................................3
(g) The Registration Rights Agreement and DTC Agreement..................................................3
(h) Authorization of the Securities and the Exchange Securities..........................................4
(i) Authorization of the Indenture.......................................................................4
(j) Description of the Securities and the Indenture......................................................4
(k) No Material Adverse Change...........................................................................4
(l) Independent Accountants..............................................................................4
(m) Preparation of the Financial Statements..............................................................5
(n) Incorporation and Good Standing of the Company and its Subsidiaries..................................5
(o) Capitalization and Other Capital Stock Matters.......................................................5
(p) Stock Exchange Listing...............................................................................6
(q) Non-Contravention of Existing Instruments; No Further Authorizations
or Approvals Required.............................................................................6
(r) No Material Actions or Proceedings...................................................................6
(s) Intellectual Property Rights.........................................................................6
(t) All Necessary Permits, etc...........................................................................7
(u) Title to Properties..................................................................................7
(v) Tax Law Compliance...................................................................................7
(w) Company Not an "Investment Company"..................................................................7
(x) Insurance............................................................................................7
(y) No Price Stabilization or Manipulation...............................................................8
(z) Solvency.............................................................................................8
(aa) No Unlawful Contributions or Other Payments.........................................................8
(bb) Company's Accounting System.........................................................................8
(cc) Compliance with Environmental Laws..................................................................8
(dd) ERISA Compliance....................................................................................9
(ee) No Default in Senior Indebtedness...................................................................9
(ff) New Credit Facility.................................................................................9
(gg) Compliance with Regulation S........................................................................9
(hh) Year 2000 Compliance................................................................................9
Section 2. Purchase, Sale and Delivery of the Securities........................................................10
(a) The Securities......................................................................................10
</TABLE>
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
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<S> <C>
(b) The Closing Date....................................................................................10
(c) Delivery of the Securities..........................................................................10
(d) Delivery of Offering Memorandum to the Initial Purchasers...........................................10
(e) Initial Purchasers as Qualified Institutional Buyers................................................10
Section 3. Additional Covenants.................................................................................12
(a) Initial Purchasers' Review of Proposed Amendments and Supplements...................................12
(b) Amendments and Supplements to the Offering Memorandum and Other Securities Act Matters..............12
(c) Copies of the Offering Memorandum...................................................................12
(d) Blue Sky Compliance.................................................................................13
(e) Use of Proceeds.....................................................................................13
(f) The Depositary......................................................................................13
(g) Additional Issuer Information.......................................................................13
(h) Future Reports to the Initial Purchasers............................................................13
(i) No Integration......................................................................................13
(j) Legended Securities.................................................................................14
(k) PORTAL..............................................................................................14
Section 4. Payment of Expenses..................................................................................14
Section 5. Conditions of the Obligations of the Initial Purchasers..............................................14
(a) Accountants' Comfort Letter.........................................................................14
(b) No Material Adverse Change or Ratings Agency Change.................................................14
(c) Opinion of Counsel for the Company..................................................................15
(d) Opinion of Counsel for the Investor.................................................................15
(e) Opinion of Counsel for the Initial Purchasers.......................................................15
(f) Officers' Certificate...............................................................................15
(g) Bring-down Comfort Letter...........................................................................15
(h) PORTAL Listing......................................................................................15
(i) Registration Rights Agreement.......................................................................15
(j) Concurrent Transactions.............................................................................15
(k) Additional Documents................................................................................16
Section 6. Reimbursement of Initial Purchasers' Expenses........................................................16
Section 7. Offer, Sale and Resale Procedures....................................................................16
Section 8. Indemnification......................................................................................17
</TABLE>
ii
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
(a) Indemnification of the Initial Purchasers...........................................................17
(b) Indemnification of the Company, its Directors and Officers..........................................18
(c) Notifications and Other Indemnification Procedures..................................................18
(d) Settlements.........................................................................................19
Section 9. Contribution.........................................................................................19
Section 10. Termination of this Agreement.......................................................................20
Section 11. Representations and Indemnities to Survive Delivery.................................................21
Section 12. Notices.............................................................................................21
Section 13. Successors..........................................................................................21
Section 14. Partial Unenforceability............................................................................22
Section 15. Governing Law Provisions............................................................................22
(a) Consent to Jurisdiction.............................................................................22
Section 16. Default of One or More of the Several Initial Purchasers............................................22
Section 17. General Provisions..................................................................................22
</TABLE>
Schedule A List of Initial Purchasers
Exhibit A Subsidiaries
Exhibit B Opinion of Counsel for the Company
Exhibit C Opinion of Counsel for the Investor
Annex I Resale Restrictions
iii
<PAGE> 5
PURCHASE AGREEMENT
June 24, 1999
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
As Initial Purchasers
c/o BANC OF AMERICA SECURITIES LLC
100 North Tryon Street, 7th Floor
Charlotte, North Carolina 28255
Ladies and Gentlemen:
Introductory. Juno Lighting, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several Initial Purchasers named
in Schedule A (the "Initial Purchasers"), acting severally and not jointly, the
respective amounts set forth in such Schedule A of an $125,000,000 aggregate
principal amount of the Company's 11 7/8% Senior Subordinated Notes due 2009
(the "Notes"). Banc of America Securities LLC and Credit Suisse First Boston
Corporation have agreed to act as the Initial Purchasers in connection with the
offering and sale of the Notes.
The Notes will be issued pursuant to an indenture (the
"Indenture"), between the Company and Firstar Bank of Minnesota, N.A., as
trustee (the "Trustee"). Notes issued in book-entry form will be issued in the
name of Cede & Co., as nominee of The Depository Trust Company (the
"Depositary") pursuant to a DTC Agreement, to be dated as of the Closing Date
(as defined in Section 2 hereof) (the "DTC Agreement"), among the Company, the
Trustee and the Depositary.
The holders of the Notes will be entitled to the benefits of a
registration rights agreement, to be dated as of the Closing Date (as defined in
Section 2 hereof) (the "Registration Rights Agreement"), among the Company and
the Initial Purchasers, pursuant to which the Company will agree to file, within
60 days of the Closing Date, a registration statement with the Securities and
Exchange Commission (the "Commission") registering the Exchange Securities (as
defined below) under the Securities Act.
The payment of principal of and premium and interest on the
Notes and the Exchange Notes (as defined in Section 1(g) hereof) will be fully
and unconditionally guaranteed on a senior unsecured basis, jointly and
severally, by (i) Juno Manufacturing, Inc., an Illinois corporation, (ii) Indy
Lighting, Inc., an Indiana corporation, (iii) Advanced Fiberoptic Technologies,
Inc., a Florida corporation, and (iv) any subsidiary of the Company formed or
acquired after the Closing Date that executes an additional guarantee in
accordance with the terms of the Indenture and their respective successors and
assigns (collectively, the "Guarantors"), pursuant to their guarantees (the
"Guarantees"). The Notes and the Guarantees attached thereto are herein
collectively referred to as the "Securities," and the Exchange Notes and the
Guarantees attached thereto are herein collectively referred to as the "Exchange
Securities."
The Company will be recapitalized (the "Merger") pursuant to
an Agreement and Plan of Recapitalization and Merger dated as of March 26, 1999
(the "Merger Agreement") by and among the Company, Fremont Investors I, LLC (the
"Investor") and Jupiter Acquisition Corp. The proceeds from the sale of the
Securities will be used to finance a portion of the consideration payable to
stockholders of the Company in the Merger.
The Company understands that the Initial Purchasers propose to
make an offering of the Securities on the terms and in the manner set forth
herein and in the Offering Memorandum (as defined below) and agrees that
1
<PAGE> 6
the Initial Purchasers may resell ("Exempt Resales"), subject to the conditions
set forth herein, all or a portion of the Securities to purchasers (the
"Subsequent Purchasers") at any time after the date of this Agreement. The
Securities are to be offered and sold to or through the Initial Purchasers
without being registered with the Commission under the Securities Act of 1933
(as amended, the "Securities Act," which term, as used herein, includes the
rules and regulations of the Commission promulgated thereunder), in reliance
upon exemptions therefrom. The terms of the Securities and the Indenture will
require that investors that acquire Securities expressly agree that Securities
may only be resold or otherwise transferred, after the date hereof, if such
Securities are registered for sale under the Securities Act or if an exemption
from the registration requirements of the Securities Act is available (including
the exemptions afforded by Rule 144A ("Rule 144A") or Regulation S ("Regulation
S") thereunder).
The Company has prepared and delivered to each Initial
Purchaser copies of a Preliminary Offering Memorandum, dated June 4, 1999 (the
"Preliminary Offering Memorandum"), and has prepared and will deliver to each
Initial Purchaser, copies of the Offering Memorandum, dated June 24, 1999,
describing the terms of the Securities, each for use by such Initial Purchaser
in connection with its solicitation of offers to purchase the Securities. As
used herein, the "Offering Memorandum" shall mean, with respect to any date or
time referred to in this Agreement, the Company's Offering Memorandum, dated
June 24, 1999, including amendments or supplements thereto, any exhibits thereto
and the Incorporated Documents (as defined in Section 1(e) hereof), in the most
recent form that has been prepared and delivered by the Company to the Initial
Purchasers in connection with their solicitation of offers to purchase
Securities. Further, any reference to the Preliminary Offering Memorandum or the
Offering Memorandum shall be deemed to refer to and include any Additional
Issuer Information (as defined in Section 3(g) hereof) furnished by the Company
prior to the completion of the distribution of the Securities.
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Offering Memorandum (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which are incorporated by reference in the Offering Memorandum; and
all references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (as amended, the "Exchange Act," which term,
as used herein, includes the rules and regulations of the Commission promulgated
thereunder) which is incorporated or deemed to be incorporated by reference in
the Offering Memorandum.
The Company hereby confirms its agreements with the Initial
Purchasers as follows:
Section 1. Representations and Warranties. The Company and
each of the Guarantors hereby jointly and severally represent, warrant and
covenant to each Initial Purchaser as follows:
(a) No Registration Required. Subject to compliance by the
Initial Purchasers with the representations and warranties set forth in
Section 2(e) hereof and with the procedures set forth in Section 7
hereof, it is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers and to each
Subsequent Purchaser in the manner contemplated by this Agreement and
the Offering Memorandum to register the Securities under the Securities
Act or, until such time as the Exchange Securities are issued pursuant
to an effective registration statement, to qualify the Indenture under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act,"
which term, as used herein, includes the rules and regulations of the
Commission promulgated thereunder).
(b) No Integration of Offerings or General Solicitation. The
Company has not, directly or indirectly, solicited any offer to buy or
offered to sell, and will not, directly or indirectly, solicit any
offer to buy or offer to sell, in the United States or to any United
States citizen or resident, any security which is or would be
integrated with the sale of the Securities in a manner that would
require the Securities to be registered under the Securities Act. None
of the Company, its affiliates (as such term is defined in Rule 501(b)
under the Securities Act) (each, an "Affiliate"), or any person acting
on its or any of their behalf (other than the Initial Purchasers, as to
whom the Company makes no representation or warranty) has engaged or
will engage, in connection with the offering of the Securities, in any
form of general solicitation or general advertising within the meaning
of Rule 502(c) under the Securities Act. With
2
<PAGE> 7
respect to those Securities sold in reliance upon Regulation S, (i)
none of the Company, its Affiliates or any person acting on its or
their behalf (other than the Initial Purchasers, as to whom the Company
makes no representation or warranty) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S and (ii)
each of the Company and its Affiliates and any person acting on its or
their behalf (other than the Initial Purchasers, as to whom the Company
makes no representation or warranty) has complied and will comply with
the offering restrictions set forth in Regulation S.
(c) Eligibility for Resale under Rule 144A. The Securities are
eligible for resale pursuant to Rule 144A and will not be, at the
Closing Date, of the same class as securities listed on a national
securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated interdealer quotation system.
(d) The Offering Memorandum. The Offering Memorandum does not,
and at the Closing Date will not, include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that this
representation, warranty and agreement shall not apply to statements in
or omissions from the Offering Memorandum made in reliance upon and in
conformity with information furnished to the Company in writing by any
Initial Purchaser through Banc of America Securities LLC expressly for
use in the Offering Memorandum. Each of the Preliminary Offering
Memorandum and the Offering Memorandum, as of its date, contains all
the information specified in, and meeting the requirements of, Rule
144A(d)(4). The Company has not distributed and will not distribute,
prior to the later of the Closing Date and the completion of the
Initial Purchasers' distribution of the Securities, any offering
material in connection with the offering and sale of the Securities
other than a preliminary Offering Memorandum or the Offering
Memorandum.
(e) Incorporated Documents. The Offering Memorandum as
delivered from time to time shall incorporate by reference the most
recent Annual Report of the Company on Form 10-K filed with the
Commission and each Quarterly Report of the Company on Form 10-Q and
each Current Report of the Company on Form 8-K filed with the
Commission since the filing of the end of the fiscal year to which such
Annual Report relates. The documents incorporated or deemed to be
incorporated by reference in the Offering Memorandum at the time they
were or hereafter are filed with the Commission (collectively, the
"Incorporated Documents") complied and will comply in all material
respects with the requirements of the Exchange Act.
(f) The Purchase Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or
by general equitable principles and except as rights to indemnification
under the Registration Rights Agreement may be limited by applicable
law.
(g) The Registration Rights Agreement and DTC Agreement. At
the Closing Date, each of the Registration Rights Agreement and the DTC
Agreement will be duly authorized, executed and delivered by, and will
be a valid and binding agreement of, the Company, enforceable in
accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles and except as rights to
indemnification under the Registration Rights Agreement may be limited
by applicable law. Pursuant to the Registration Rights Agreement, the
Company will agree to file with the Commission, under the circumstances
set forth therein, (i) a registration statement under the Securities
Act relating to another series of debt securities of the Company with
terms substantially identical to the Notes (the "Exchange Notes") to be
offered in exchange for the Notes (the "Exchange Offer") and (ii) to
the extent required by the Registration Rights Agreement, a shelf
registration statement pursuant to Rule 415 of the Securities Act
relating to the resale by certain holders of the Notes, and in each
case, to use
3
<PAGE> 8
its best efforts to cause such registration statements to be declared
effective.
(h) Authorization of the Securities and the Exchange
Securities. The Notes to be purchased by the Initial Purchasers from
the Company are in the form contemplated by the Indenture, have been
duly authorized for issuance and sale pursuant to this Agreement and
the Indenture and, at the Closing Date, will have been duly executed by
the Company and, when authenticated in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor,
will constitute valid and binding agreements of the Company,
enforceable in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights
and remedies of creditors or by general equitable principles and will
be entitled to the benefits of the Indenture. The Exchange Notes have
been duly and validly authorized for issuance by the Company, and when
issued and authenticated in accordance with the terms of the Indenture,
the Registration Rights Agreement and the Exchange Offer, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or affecting
enforcement of the rights and remedies of creditors or by general
principles of equity and will be entitled to the benefits of the
Indenture. The Guarantees of the Notes and the Exchange Notes are in
the respective forms contemplated by the Indenture, have been duly
authorized for issuance and sale pursuant to this Agreement and the
Indenture and, at the Closing Date, will have been duly executed by
each of the Guarantors and, when the Notes have been authenticated in
the manner provided for in the Indenture and delivered against payment
of the purchase price therefor, will constitute valid and binding
agreements of the Guarantors, enforceable in accordance with their
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights and remedies of creditors or by general
equitable principles and will be entitled to the benefits of the
Indenture.
(i) Authorization of the Indenture. The Indenture has been
duly authorized by the Company and, at the Closing Date, will have been
duly executed and delivered by the Company and will constitute a valid
and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.
(j) Description of the Securities and the Indenture. The
Notes, the Exchange Notes, the Guarantees of the Notes and the Exchange
Notes and the Indenture will conform in all material respects to the
respective statements relating thereto contained in the Offering
Memorandum.
(k) No Material Adverse Change. Except as otherwise disclosed
in the Offering Memorandum, subsequent to the respective dates as of
which information is given in the Offering Memorandum: (i) there has
been no material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in
the ordinary course of business, of the Company and its subsidiaries,
considered as one entity (any such change is called a "Material Adverse
Change"); (ii) the Company and its subsidiaries, considered as one
entity, have not incurred any material liability or obligation,
indirect, direct or contingent, not in the ordinary course of business
nor entered into any material transaction or agreement not in the
ordinary course of business; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any of
its subsidiaries on any class of capital stock or repurchase or
redemption by the Company or any of its subsidiaries of any class of
capital stock.
(l) Independent Accountants. PricewaterhouseCoopers LLP, which
has expressed their opinion with respect to the financial statements
(which term as used in this Agreement includes the related notes
thereto) and supporting schedules filed with the Commission included in
the Offering Memorandum
4
<PAGE> 9
are independent public or certified public accountants with respect to
the Company and its subsidiaries within the meaning of Regulation S-X
under the Securities Act and the Exchange Act.
(m) Preparation of the Financial Statements. The financial
statements, together with the related schedules and notes, included or
incorporated by reference in the Offering Memorandum present fairly in
all material respects the consolidated financial position of the
Company and its subsidiaries as of and at the dates indicated and the
results of their operations and cash flows for the periods specified in
conformity with generally accepted accounting principles as applied in
the United States applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes
thereto. The financial data set forth in the Offering Memorandum under
the captions "Offering Memorandum Summary--Summary Consolidated
Financial Data" and "Selected Consolidated Financial Data" fairly
present in all material respects the information set forth therein on a
basis consistent with that of the audited and unaudited financial
statements contained in the Offering Memorandum. The pro forma
condensed financial statements of the Company and its subsidiaries and
the related notes thereto included under the caption "Offering
Memorandum Summary--Summary Consolidated Financial Data," "Pro Forma
Consolidated Financial Data" and elsewhere in the Offering Memorandum
present fairly the information contained therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly presented on the
basis described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
to give effect to the transactions and circumstances referred to
therein.
(n) Incorporation and Good Standing of the Company and its
Subsidiaries. Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Memorandum
and, in the case of each of the Company, Juno Manufacturing, Inc., Indy
Lighting, Inc. and Advanced Fiberoptic Technologies, Inc., to enter
into and perform its respective obligations under each of this
Agreement, the Registration Rights Agreement, the DTC Agreement, the
Securities, the Exchange Securities, the Indenture and the Merger
Agreement. Each of the Company and each subsidiary is duly qualified as
a foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except for such jurisdictions where the failure to so qualify
or to be in good standing would not, individually or in the aggregate,
result in a Material Adverse Change. All of the issued and outstanding
capital stock of each subsidiary has been duly authorized and validly
issued, is fully paid and nonassessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim. The Company
does not own or control, directly or indirectly, any corporation,
association or other entity other than the subsidiaries listed in
Exhibit A hereto.
(o) Capitalization and Other Capital Stock Matters. At May 31,
1999, on a consolidated basis, after giving pro forma effect to the
issuance and sale of the Securities pursuant hereto, the Company would
have an authorized and outstanding capitalization as set forth in the
Offering Memorandum under the caption "Capitalization" (other than for
subsequent issuances of capital stock, if any, pursuant to employee
benefit plans described in the Offering Memorandum or upon exercise of
outstanding options described in the Offering Memorandum). The Common
Stock conforms in all material respects to the description thereof set
forth or incorporated by reference in the Offering Memorandum. All of
the outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable and have been issued
in compliance with federal and state securities laws. None of the
outstanding shares of Common Stock were issued in violation of any
preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights
of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any
capital stock of the Company or any of its subsidiaries other than
those accurately described in the Offering Memorandum. The description
of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, set
forth or incorporated by reference in
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<PAGE> 10
the Offering Memorandum accurately and fairly describes such plans,
arrangements, options and rights.
(p) Stock Exchange Listing. The Common Stock is registered
pursuant to Section 12(g) of the Exchange Act and is listed on the
Nasdaq National Market, and the Company has taken no action designed
to, or likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act or delisting the Common Stock
from the Nasdaq National Market, nor has the Company received any
notification that the Commission or the National Association of
Securities Dealers, Inc. (the "NASD") is contemplating terminating such
registration or listing.
(q) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws or is in
default (or, with the giving of notice or lapse of time, would be in
default) ("Default") under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to
which the Company or any of its subsidiaries is a party or by which it
or any of them may be bound, or to which any of the property or assets
of the Company or any of its subsidiaries is subject (each, an
"Existing Instrument"), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change.
The Company's execution, delivery and performance of this Agreement,
the Registration Rights Agreement, the DTC Agreement and the Indenture,
and the issuance and delivery of the Securities or the Exchange
Securities, and consummation of the transactions contemplated hereby
and thereby and by the Offering Memorandum (i) have been duly
authorized by all necessary corporate action and will not result in any
violation of the provisions of the charter or by-laws of the Company or
any subsidiary, (ii) will not conflict with or constitute a breach of,
or Default or a Debt Repayment Triggering Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to,
any Existing Instrument, except for such conflicts, breaches, Defaults,
liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Change and (iii) will not
result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any
subsidiary. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company's
execution, delivery and performance of this Agreement, the Registration
Rights Agreement, the DTC Agreement or the Indenture, or the issuance
and delivery of the Securities or the Exchange Securities, or
consummation of the transactions contemplated hereby and thereby and by
the Offering Memorandum, except such as have been obtained or made by
the Company and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and except such as may be
required by federal and state securities laws with respect to the
Company's obligations under the Registration Rights Agreement. As used
herein, a "Debt Repayment Triggering Event" means any event or
condition which gives, or with the giving of notice or lapse of time
would give, the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any of its subsidiaries.
(r) No Material Actions or Proceedings. Except as otherwise
disclosed in the Offering Memorandum, there are no legal or
governmental actions, suits or proceedings pending or, to the best of
the Company's knowledge, threatened against or affecting the Company or
any of its subsidiaries, which has as the subject thereof any property
owned or leased by, the Company or any of its subsidiaries, where in
any such case (A) there is a reasonable possibility that such action,
suit or proceeding might be determined adversely to the Company or such
subsidiary and (B) any such action, suit or proceeding, if so
determined adversely, would reasonably be expected to result in a
Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. Except as disclosed in the
Offering Memorandum, no material labor dispute with the employees of
the Company or any of its subsidiaries, or with the employees of any
principal supplier of the Company, exists or, to the Company's
knowledge, is threatened or imminent.
(s) Intellectual Property Rights. Except as disclosed in the
Offering Memorandum, the
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<PAGE> 11
Company and its subsidiaries own or possess sufficient trademarks,
trade names, patent rights, copyrights, licenses, approvals, trade
secrets and other similar rights (collectively, "Intellectual Property
Rights") reasonably necessary to conduct their businesses as now
conducted and the expected expiration of any of such Intellectual
Property Rights would not result in a Material Adverse Change. Except
as disclosed in the Offering Memorandum, neither the Company nor any of
its subsidiaries has received any notice of infringement or conflict
with asserted Intellectual Property Rights of others, which
infringement or conflict, if the subject of an unfavorable decision,
would reasonably be expected to result in a Material Adverse Change.
(t) All Necessary Permits, etc. Except as disclosed in the
Offering Memorandum, the Company and each subsidiary possess such valid
and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or other
bodies necessary to conduct their respective businesses as currently
conducted, and neither the Company nor any subsidiary has received any
notice of proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could result in a Material Adverse Change.
(u) Title to Properties. The Company and each of its
subsidiaries has good and marketable title to all the properties and
assets reflected as owned in the financial statements referred to in
Section 1(m) above (or elsewhere in the Offering Memorandum), in each
case free and clear of any security interests, mortgages, liens,
encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do not
materially interfere with the use made or proposed to be made of such
property by the Company or such subsidiary or would not reasonably be
expected to result in a Material Adverse Change. The real property,
improvements, equipment and personal property held under lease by the
Company or any subsidiary are held under valid and enforceable leases,
with such exceptions as do not materially interfere with the use made
or proposed to be made of such real property, improvements, equipment
or personal property by the Company or such subsidiary.
(v) Tax Law Compliance. The Company and its subsidiaries have
filed all necessary federal, state and foreign income and franchise tax
returns or have duly requested extensions thereof and have paid all
taxes required to be paid by any of them and, if due and payable, any
related or similar assessment, fine or penalty levied against any of
them except as may be being contested in good faith and by appropriate
proceedings. The Company has made adequate charges, accruals and
reserves in the applicable financial statements referred to in Section
1(m) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the
Company or any of its subsidiaries has not been finally determined.
(w) Company Not an "Investment Company". The Company has been
advised of the rules and requirements under the Investment Company Act
of 1940, as amended (the "Investment Company Act"). The Company is not,
and after receipt of payment for the Securities will not be, an
"investment company" within the meaning of Investment Company Act and
will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(x) Insurance. Each of the Company and its subsidiaries is
insured by recognized, financially sound institutions with policies in
such amounts and with such deductibles and covering such risks as are
generally deemed adequate and customary by the Company for its
respective businesses including, but not limited to, policies covering
real and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction and acts of vandalism.
The Company has no reason to believe that it or any subsidiary will not
be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business
as now conducted and at a cost that would not reasonably be expected to
result in a Material Adverse Change. Neither of the Company nor any
subsidiary has been denied any insurance coverage which it has sought
or for which it has applied.
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<PAGE> 12
(y) No Price Stabilization or Manipulation. The Company has
not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(z) Solvency. The Company is, and immediately after the
Closing Date will be, Solvent. As used herein, the term "Solvent"
means, with respect to the Company on a particular date, that on such
date (i) the fair market value of the assets of the Company is greater
than the total amount of liabilities (including contingent liabilities)
of the Company, (ii) the present fair salable value of the assets of
the Company is greater than the amount that will be required to pay the
probable liabilities of the Company on its debts as they become
absolute and matured, (iii) the Company is able to realize upon its
assets and pay its debts and other liabilities, including contingent
obligations, as they mature and (iv) the Company does not have
unreasonably small capital.
(aa) No Unlawful Contributions or Other Payments. Neither the
Company nor any of its subsidiaries nor, to the best of the Company's
knowledge, any employee or agent of the Company or any subsidiary, has
made any contribution or other payment to any official of, or candidate
for, any federal, state or foreign office in violation of any law or of
the character necessary to be disclosed in the Offering Memorandum in
order to make the statements therein not misleading.
(bb) Company's Accounting System. The Company maintains a
system of accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles as applied in
the United States and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(cc) Compliance with Environmental Laws. Except disclosed in
the Offering Memorandum or as would not, individually or in the
aggregate, result in a Material Adverse Change, to their respective
knowledge (i) neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign law or regulation
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including
without limitation, laws and regulations relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
and petroleum products (collectively, "Materials of Environmental
Concern"), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling
of Materials of Environmental Concern (collectively, "Environmental
Laws"), which violation includes, but is not limited to, noncompliance
with any permits or other governmental authorizations required for the
operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company or any of its subsidiaries
received any written communication from a governmental authority that
alleges that the Company or any of its subsidiaries is in violation of
any Environmental Law; (ii) there is no claim, action or cause of
action filed with a court or governmental authority, no investigation
with respect to which the Company has received written notice, and no
written notice by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs,
natural resources damages, property damages, personal injuries,
attorneys' fees or penalties arising out of, based on or resulting from
the presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by the
Company or any of its subsidiaries, now or in the past (collectively,
"Environmental Claims"), pending or, to the Company's knowledge,
threatened against the Company or any of its subsidiaries or any person
or entity whose liability for any Environmental Claim the Company or
any of its subsidiaries has retained or assumed either contractually or
by operation of law; and (iii) to the Company's knowledge, there are no
past or present actions, activities, circumstances, conditions, events
or incidents, including, without
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<PAGE> 13
limitation, the release, emission, discharge, presence or disposal of
any Material of Environmental Concern, that reasonably could result in
a violation of any Environmental Law by the Company or form the basis
of a potential Environmental Claim against the Company or any of its
subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained
or assumed either contractually or by operation of law.
(dd) ERISA Compliance. The Company and its subsidiaries and
any "employee benefit plan" (as defined under the Employee Retirement
Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (collectively, "ERISA"))
established or maintained by the Company, its subsidiaries or their
"ERISA Affiliates" (as defined below) are in compliance in all material
respects with ERISA. "ERISA Affiliate" means, with respect to the
Company or a subsidiary, any member of any group of organizations
described in Sections 414(b), (c), (m) or (o) of the Internal Revenue
Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or such
subsidiary is a member. No "reportable event" (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates. No "employee benefit
plan" established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates, if such "employee benefit plan" were
terminated, would have any "amount of unfunded benefit liabilities" (as
defined under ERISA). Neither the Company, its subsidiaries nor any of
their ERISA Affiliates has incurred or reasonably expects to incur any
liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "employee benefit plan" or (ii) Sections 412,
4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of
their ERISA Affiliates that is intended to be qualified under Section
401(a) of the Code is so qualified and nothing has occurred, whether by
action or failure to act, which would cause the loss of such
qualification.
(ee) No Default in Senior Indebtedness. No event of default
exists under any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument constituting Senior Indebtedness
(as defined in the Indenture).
(ff) New Credit Facility. The senior credit facilities (as
described in the Offering Memorandum) has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the valid and legally binding obligation of the
Company, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(gg) Compliance with Regulation S. The Company, the Guarantors
and their respective affiliates and all persons acting on their behalf
(other than the Initial Purchasers, as to whom the Company and the
Guarantors make no representation) have complied with and will comply
with the offering restrictions requirements of Regulation S in
connection with the offering of the Securities outside the United
States. The Company is a "reporting issuer," as defined in Rule 902
under the Securities Act.
(hh) Year 2000 Compliance. The Company has taken reasonable
steps to ensure that all Date Data and Date-Sensitive Systems of the
Company and its subsidiaries will be Year 2000 Compliant by December
31, 1999. As used herein: (i) "Date Data" means any data of any type
that includes date information or which is otherwise derived from,
dependent on or related to date information, (ii) "Date-Sensitive
System" means any software, microcode or hardware system or component,
including any electronic or electronically controlled system or
component, that processes any Date Data and that is installed, in
development or on order by the Company or any of its subsidiaries for
their internal use, or which the Company or any of its subsidiaries
sells, leases, licenses, assigns or otherwise provides, or the
provision or operation of which the Company or any of its subsidiaries
provides the benefit, to its customers, vendors, suppliers, affiliates
or any other third party, and (iii) "Year 2000 Compliant" means (A)
with respect to Date Data, that such data is in proper format and
accurate for all dates in the twentieth and twenty-first centuries, and
(B) with respect to Date-Sensitive Systems, that each such system
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<PAGE> 14
accurately processes all Date Data, including for the twentieth and
twenty-first centuries, without loss of any functionality, including
but not limited to calculating, comparing, sequencing, storing and
displaying such Date Data (including all leap year considerations),
when used as a stand-alone system or in combination with other software
or hardware.
Any certificate signed by an officer of the Company and
delivered to the Initial Purchasers or to counsel for the Initial
Purchasers shall be deemed to be a representation and warranty by the
Company to each Initial Purchaser as to the matters set forth therein.
Section 2. Purchase, Sale and Delivery of the Securities.
(a) The Securities. The Company agrees to issue and sell to
the several Initial Purchasers, severally and not jointly, all of the
Securities upon the terms herein set forth. On the basis of the
representations, warranties and agreements herein contained, and upon
the terms but subject to the conditions herein set forth, the Initial
Purchasers agree, severally and not jointly, to purchase from the
Company the aggregate principal amount of Securities set forth opposite
their names on Schedule A, at a purchase price of 96.282% of the
principal amount thereof payable on the Closing Date.
(b) The Closing Date. Delivery of certificates for the
Securities in definitive form to be purchased by the Initial Purchasers
and payment therefor shall be made at the offices of Skadden, Arps,
Slate, Meagher & Flom (Illinois) LLP, 333 West Wacker Drive, Chicago,
Illinois 60606 (or such other place as may be agreed to by the Company
and the Initial Purchasers) at 9:00 a.m. New York City time, on June
30, 1999, or such other time and date as the Initial Purchasers shall
designate by notice to the Company (the time and date of such closing
are called the "Closing Date"). The Company hereby acknowledges that
circumstances under which the Initial Purchasers may provide notice to
postpone the Closing Date as originally scheduled include, but are in
no way limited to, any determination by the Company or the Initial
Purchasers to recirculate to investors copies of an amended or
supplemented Offering Memorandum or a delay as contemplated by the
provisions of Section 16.
(c) Delivery of the Securities. The Company shall deliver, or
cause to be delivered, to Banc of America Securities LLC for the
accounts of the several Initial Purchasers certificates for the
Securities at the Closing Date against the irrevocable release of a
wire transfer of immediately available funds for the amount of the
purchase price therefor. The certificates for the Securities shall be
in such denominations and registered in the name of Cede & Co., as
nominee of the Depository, pursuant to the DTC Agreement, and shall be
made available for inspection on the business day preceding the Closing
Date at a location in New York City, as the Initial Purchasers may
designate. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the
obligations of the Initial Purchasers.
(d) Delivery of Offering Memorandum to the Initial Purchasers.
Not later than 12:00 p.m. on the second business day following the date
of this Agreement, the Company shall delivery or cause to be delivered
copies of the Offering Memorandum in such quantities and at such places
as the Initial Purchasers shall reasonably request.
(e) Initial Purchasers as Qualified Institutional Buyers. Each
of the Initial Purchasers, severally and not jointly, represent and
warrant to the Company and the Guarantors, and agrees that:
(1) Such Initial Purchaser is either a
"qualified institutional buyer" within the meaning of Rule
144A (a "Qualified Institutional Buyer") or an Accredited
Institution, in either case, with such knowledge and
experience in financial and business matters as is necessary
in order to evaluate the merits and risks of an investment in
the Securities.
(2) Such Initial Purchaser (A) is not
acquiring the Securities with a view to any distribution
thereof or with any present intention of offering or selling
any of the Securities in
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<PAGE> 15
a transaction that would violate the Securities Act or the
securities laws of any state of the United States or any other
applicable jurisdiction and (B) will be reoffering and
reselling the Securities only to (x) Qualified Institutional
Buyers in reliance on the exemption from the registration
requirements of the Securities Act provided by Rule 144A and
(y) in offshore transactions in reliance upon Regulation S
under the Securities Act.
(3) Such Initial Purchaser agrees that no
form of general solicitation or general advertising (within
the meaning of Regulation D under the Securities Act) has been
or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the
Securities pursuant hereto, including, but not limited to,
articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general
advertising.
(4) Such Initial Purchaser agrees that, in
connection with Exempt Resales, such Initial Purchaser will
solicit offers to buy the Securities only from, and will offer
to sell the Securities only to, Subsequent Purchasers. Each
Initial Purchaser further agrees that it will offer to sell
the Securities only to, and will solicit offers to buy the
Securities only from (1)(A) Qualified Institutional Buyers
who, in purchasing the Securities will be deemed to have
represented and agreed that (x) they are purchasing the
Securities for their own accounts or accounts with respect to
which they exercise sole investment discretion and that they
or such accounts are Qualified Institutional Buyers and (y)
they acknowledge that the seller of such Securities may be
relying on the exemption from the provisions of Section 5 of
the Securities Act provided by Rule 144A thereunder and that
such Securities will not have been registered under the
Securities Act and (B) Regulation S Purchasers who, in
purchasing the Securities will be deemed to have represented
and agreed that their purchase of Securities pursuant to
Regulation S is not part of a plan or scheme to evade the
registration provisions of the Securities Act and (2)
Subsequent Purchasers that agree that (x) Securities purchased
by them may be resold, pledged or otherwise transferred within
the time period referred to under Rule 144(k) (taking into
account the provisions of Rule 144(d) under the Securities
Act, if applicable) under the Securities Act, as in effect on
the date of the transfer of such Securities, only (I) to the
Company or any of its subsidiaries, (II) to a person whom the
seller reasonably believes is a Qualified Institutional Buyer
purchasing for its own account or for the account of a
Qualified Institutional Buyer in a transaction meeting the
requirements of Rule 144A under the Securities Act, (III) in
an offshore transaction (as defined in Rule 902 under the
Securities Act) meeting the requirements of Rule 904 of the
Securities Act, (IV) in a transaction meeting the requirements
of Rule 144 under the Securities Act, (V) to an Accredited
Institution that, prior to such transfer, furnishes the
Trustee a signed letter containing certain representations and
agreements relating to the registration of transfer of such
Series A Note and, if such transfer is in respect of an
aggregate principal amount of Securities less than $250,000,
an opinion of counsel acceptable to the Company that such
transfer is in compliance with the Securities Act, (f) in
accordance with another exception from the registration
requirements of the Securities Act (and based upon an opinion
of counsel acceptable to the Company) or (g) pursuant to an
effective registration statement and, in each case, in
accordance with the applicable securities laws of any state of
the United States or any other acceptable jurisdiction and (y)
they will deliver to each person to whom such Securities or an
interest therein is transferred a notice substantially to the
effect of the foregoing.
(5) Such Initial Purchaser and its
affiliates or any person acting on its or their behalf have
not engaged in any directed selling efforts within the meaning
of Regulation S with respect to the Securities or the
Subsidiary Guarantees.
(6) The Securities offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S
have been and will be offered and sold only in offshore
transactions.
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<PAGE> 16
(7) The sale of the Securities offered and
sold by such Initial Purchaser pursuant hereto in reliance on
Regulation S is not part of a plan or scheme to evade the
registration provisions of the Securities Act.
The Initial Purchaser acknowledges that the Company and its
Subsidiaries and, for purposes of the opinions to be delivered to each
Initial Purchaser pursuant to Sections 5(c), 5(d) and 5(e) hereof,
counsel to the Company and the Guarantors, counsel to the Investor and
counsel to the Initial Purchasers will rely upon the accuracy and truth
of the foregoing representations and the Initial Purchaser hereby
consents to such reliance.
Section 3. Additional Covenants. The Company and each of
the Guarantors, jointly and severally, further covenant and agree with
each Initial Purchaser as follows:
(a) Initial Purchasers' Review of Proposed Amendments and
Supplements. Prior to amending or supplementing the Offering Memorandum
(including any amendment or supplement through incorporation by
reference of any report filed under the Exchange Act), the Company
shall furnish to the Initial Purchasers for review a copy of each such
proposed amendment or supplement, and the Company shall not use any
such proposed amendment or supplement to which the Initial Purchasers
reasonably object.
(b) Amendments and Supplements to the Offering Memorandum and
Other Securities Act Matters. If, prior to the completion of the
placement of the Securities by the Initial Purchasers with the
Subsequent Purchasers, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Offering
Memorandum in order to make the statements therein, in the light of the
circumstances when the Offering Memorandum is delivered to a purchaser,
not misleading, or if in the reasonable opinion of the Initial
Purchasers or counsel for the Initial Purchasers it is otherwise
necessary to amend or supplement the Offering Memorandum to comply with
law, the Company agrees to promptly prepare (subject to Section 3(a)
hereof), file with the Commission (with respect to documents
incorporated by reference) and furnish at its own expense to the
Initial Purchasers, amendments or supplements to the Offering
Memorandum so that the statements in the Offering Memorandum as so
amended or supplemented will not, in the light of the circumstances
when the Offering Memorandum is delivered to a purchaser, be misleading
or so that the Offering Memorandum, as amended or supplemented, will
comply with law.
Following the consummation of the Exchange Offer or the
effectiveness of an applicable shelf registration statement and for so
long as the Securities are outstanding if, in the reasonable judgment
of the Initial Purchasers, the Initial Purchasers or any of their
affiliates (as such term is defined in the rules and regulations under
the Securities Act) are required to deliver a prospectus in connection
with sales of, or market-making activities with respect to, such
securities, (A) to periodically amend the applicable registration
statement so that the information contained therein complies with the
requirements of Section 10(a) of the Securities Act, (B) to amend the
applicable registration statement or supplement the related prospectus
or the documents incorporated therein when necessary to reflect any
material changes in the information provided therein so that the
registration statement and the prospectus will not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances existing as of the date the prospectus is so delivered,
not misleading and (C) to provide the Initial Purchasers with copies of
each amendment or supplement filed and such other documents as the
Initial Purchasers may reasonably request.
The Company hereby expressly acknowledges that the
indemnification and contribution provisions of Sections 8 and 9 hereof
are specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to
in this Section 3(b).
(c) Copies of the Offering Memorandum. The Company agrees to
furnish the Initial Purchasers, without charge, as many copies of the
Offering Memorandum and any amendments and
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supplements thereto as they shall have reasonably requested.
(d) Blue Sky Compliance. The Company shall cooperate with the
Initial Purchasers and counsel for the Initial Purchasers to qualify or
register the Securities for sale under (or obtain exemptions from the
application of) the Blue Sky or state securities laws of those
jurisdictions designated by the Initial Purchasers, shall comply with
such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the
Securities. The Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general
service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign
corporation. The Company will advise the Initial Purchasers promptly of
the suspension of the qualification or registration of (or any such
exemption relating to) the Securities for offering, sale or trading in
any jurisdiction or any initiation or threat of any proceeding for any
such purpose, and in the event of the issuance of any order suspending
such qualification, registration or exemption, the Company shall use
its best efforts to obtain the withdrawal thereof at the earliest
possible moment.
(e) Use of Proceeds. The Company shall apply the net proceeds
from the sale of the Securities sold by it in the manner described
under the caption "Use of Proceeds" in the Offering Memorandum.
(f) The Depositary. The Company will cooperate with the
Initial Purchasers and use its reasonable best efforts to permit the
Securities to be eligible for clearance and settlement through the
facilities of the Depositary.
(g) Additional Issuer Information. Prior to the completion of
the placement of the Securities by the Initial Purchasers with the
Subsequent Purchasers, the Company shall file, on a timely basis, with
the Commission and the Nasdaq National Market all reports and documents
required to be filed under Section 13 or 15(d) of the Exchange Act.
Additionally, at any time when the Company is not subject to Section 13
or 15(d) of the Exchange Act, for the benefit of holders and beneficial
owners from time to time of Securities, the Company shall furnish, at
its expense, upon request, to holders and beneficial owners of
Securities and prospective purchasers of Securities information
("Additional Issuer Information") satisfying the requirements of
subsection (d)(4) of Rule 144A.
(h) Future Reports to the Initial Purchasers. For so long as
any Securities or Exchange Securities remain outstanding, the Company
will furnish to Banc of America Securities LLC (i) as soon as
practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of
the close of such fiscal year and statements of income, stockholders'
equity and cash flows for the year then ended and the opinion thereon
of the Company's independent public or certified public accountants;
(ii) as soon as practicable after the filing thereof, copies of each
proxy statement, Annual Report on Form 10-K, Quarterly Report on Form
10-Q, Current Report on Form 8-K or other report filed by the Company
with the Commission, the NASD or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Company
mailed generally to holders of its capital stock or debt securities
(including the holders of the Securities), provided that, for the
purpose hereof, any report or statement filed under the Commission's
EDGAR system shall be deemed furnished as required hereunder.
(i) No Integration. The Company agrees that it will not and
will cause its Affiliates not to make any offer or sale of securities
of the Company of any class (other than the Securities) if, as a result
of the doctrine of "integration" referred to in Rule 502 under the
Securities Act, such offer or sale would render invalid (for the
purpose of (i) the sale of the Securities by the Company to the Initial
Purchasers, (ii) the resale of the Securities by the Initial Purchasers
to Subsequent Purchasers or (iii) the resale of the Securities by such
Subsequent Purchasers to others) the exemption from the registration
requirements of the Securities Act provided by Section 4(2) thereof or
by Rule 144A or by Regulation S thereunder or otherwise.
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<PAGE> 18
(j) Legended Securities. Each certificate for a Note will bear
the legend contained in "Notice to Investors" in the Offering
Memorandum for the time period and upon the other terms stated in the
Offering Memorandum.
(k) PORTAL. The Company will use its reasonable best efforts
to cause the Notes issued pursuant to Rule 144A to be eligible for the
National Association of Securities Dealers, Inc.'s PORTAL market (the
"PORTAL market").
Banc of America Securities LLC, on behalf of the several
Initial Purchasers, may, in its sole discretion, waive in writing the
performance by the Company of any one or more of the foregoing covenants or
extend the time for their performance.
Section 4. Payment of Expenses. The Company agrees to pay all
costs, fees and expenses incurred in connection with the performance of its
obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the issuance
and delivery of the Securities (including all printing and engraving costs),
(ii) all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Securities to the Initial Purchasers, (iii) all fees
and expenses of the Company's and the Guarantors' counsel, independent public or
certified public accountants and other advisors, (iv) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and
distribution of each preliminary Offering Memorandum and the Offering Memorandum
(including financial statements and exhibits), and all amendments and
supplements thereto, this Agreement, the Registration Rights Agreement, the
Indenture, the DTC Agreement, and the Notes and the Guarantees, (v) all filing
fees, reasonable attorneys' fees and reasonable expenses incurred by the Company
or the Initial Purchasers in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Securities for offer and sale under the Blue Sky laws and, if requested
by the Initial Purchasers, preparing and printing a "Blue Sky Survey" or
memorandum, and any supplements thereto, advising the Initial Purchasers of such
qualifications, registrations and exemptions, (vi) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture, the Securities and the Exchange Securities, (vii)
any fees payable in connection with the rating of the Securities or the Exchange
Securities with the ratings agencies and the listing of the Securities with the
PORTAL market, (viii) all fees and expenses (including reasonable fees and
expenses of counsel) of the Company and the Guarantors in connection with
approval of the Securities by DTC for "book-entry" transfer, and (ix) the
performance by the Company and the Guarantors of their respective other
obligations under this Agreement. Except as provided in this Section 4, Section
6, Section 8 and Section 9 hereof, the Initial Purchasers shall pay their own
expenses, including the fees and disbursements of their counsel.
Section 5. Conditions of the Obligations of the Initial Purchasers.
(A) The obligations of the several Initial Purchasers to
purchase and pay for the Securities as provided herein on the Closing Date shall
be subject to the accuracy of the representations and warranties on the part of
the Company set forth in Section 1 hereof as of the date hereof and as of the
Closing Date as though then made and to the timely performance by the Company of
its covenants and other obligations hereunder, and to each of the following
additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the
Initial Purchasers shall have received from PricewaterhouseCoopers LLP,
independent public or certified public accountants for the Company, a
letter dated the date hereof addressed to the Initial Purchasers, in
form and substance satisfactory to the Initial Purchasers, containing
statements and information of the type ordinarily included in
accountant's "comfort letters" to Initial Purchasers, delivered
according to Statement of Auditing Standards Nos. 72 and 76 (or any
successor bulletins), with respect to the audited and unaudited
financial statements and certain financial information contained in the
Registration Statement and the Offering Memorandum.
(b) No Material Adverse Change or Ratings Agency Change. For
the period from and after the date of this Agreement and prior to the
Closing Date:
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<PAGE> 19
(i) in the judgment of the Initial Purchasers
there shall not have occurred any Material Adverse Change; and
(ii) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any securities of the Company or any of
its subsidiaries by any "nationally recognized statistical
rating organization" as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act.
(c) Opinion of Counsel for the Company. On the Closing Date
the Initial Purchasers shall have received the favorable opinion of
Sonnenschein Nath & Rosenthal, counsel for the Company, dated as of
such Closing Date, the form of which is attached as Exhibit B.
(d) Opinion of Counsel for the Investor. On the Closing Date
the Initial Purchasers shall have received the favorable opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Investor,
dated as of such Closing Date, the form of which is attached as Exhibit
C.
(e) Opinion of Counsel for the Initial Purchasers. On the
Closing Date the Initial Purchasers shall have received the favorable
opinion of Latham & Watkins, counsel for the Initial Purchasers, dated
as of such Closing Date, with respect to such matters as may be
reasonably requested by the Initial Purchasers.
(f) Officers' Certificate. On the Closing Date the Initial
Purchasers shall have received a written certificate executed by the
Chairman of the Board, Chief Executive Officer or President of the
Company and the Chief Financial Officer or Chief Accounting Officer of
the Company, dated as of the Closing Date, to the effect set forth in
subsection (b)(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this
Agreement and prior to the Closing Date there has not occurred
any Material Adverse Change;
(ii) the representations, warranties and covenants of
the Company set forth in Section 1 of this Agreement are true
and correct with the same force and effect as though expressly
made on and as of the Closing Date; and
(iii) the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date.
(g) Bring-down Comfort Letter. On the Closing Date the Initial
Purchasers shall have received from PricewaterhouseCoopers LLP,
independent public or certified public accountants for the Company, a
letter dated such date, in customary form and substance reasonably
satisfactory to the Initial Purchasers, to the effect that they
reaffirm the statements made in the letter furnished by them pursuant
to subsection (a) of this Section 5, except that the specified date
referred to therein for the carrying out of procedures shall be no more
than three business days prior to the Closing Date.
(h) PORTAL Listing. At the Closing Date the Notes issued
pursuant to Rule 144A shall have been designated for trading on the
PORTAL market.
(i) Registration Rights Agreement. The Company shall have
entered into the Registration Rights Agreement and the Initial
Purchasers shall have received executed counterparts thereof.
(j) Concurrent Transactions. The Merger shall have been
consummated on or prior to the Closing Date on substantially the terms
and conditions described in the Company's proxy statement/prospectus
declared effective by the Commission on May 28, 1999 (File No.
333-76101).
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<PAGE> 20
(k) Additional Documents. On or before the Closing Date, the
Initial Purchasers and counsel for the Initial Purchasers shall have
received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Securities as contemplated herein, or in order
to evidence the accuracy of any of the representations and warranties,
or the satisfaction of any of the conditions or agreements, herein
contained.
If any condition specified in this Section 5(A) is not
satisfied when and as required to be satisfied, this Agreement may be terminated
by the Initial Purchasers by notice to the Company at any time on or prior to
the Closing Date, which termination shall be without liability on the part of
any party to any other party, except that Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such termination.
(B) The obligations of the Company set forth herein shall be
subject to (i) the accuracy of the representations and warranties on the part of
the Initial Purchasers set forth herein as of the date hereof and as of the
Closing Date as though then made and (ii) the consummation of the merger on or
prior to the Closing Date on substantially the terms and conditions described in
the Company's proxy statement/prospectus declared effective by the Commission on
May 28, 1999 (File No. 333-76101).
If any condition specified in this Section 5(B) is not
satisfied when and as required to be satisfied, this Agreement may be terminated
by the Company by notice to the Initial Purchasers at any time on or prior to
the Closing Date, which termination shall be without liability on the part of
any party to any other party, except that Section 4, Section 6, Section 8, and
Section 9 shall at all times be effective and shall survive such termination.
Section 6. Reimbursement of Initial Purchasers' Expenses. If
this Agreement is terminated by the Initial Purchasers pursuant to Section 5, or
if the sale to the Initial Purchasers of the Securities on the Closing Date is
not consummated because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or to comply with any provision hereof,
the Company agrees to reimburse the Initial Purchasers (or such Initial
Purchasers as have terminated this Agreement with respect to themselves),
severally, upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by the Initial Purchasers in connection with the proposed
purchase and the offering and sale of the Securities, including but not limited
to reasonable fees and reasonable disbursements of counsel, printing expenses,
travel expenses, postage, facsimile and telephone charges.
Section 7. Offer, Sale and Resale Procedures. Each of the
Initial Purchasers, on the one hand and the Company and each of the Guarantors,
on the other hand, hereby establish and agree to observe the following
procedures in connection with the offer and sale of the Securities:
(i) Offers and Sales Only to Qualified Institutional
Buyers. Offers and sales of the Securities will be made only
by the Initial Purchasers or Affiliates thereof qualified to
do so in the jurisdictions in which such offers or sales are
made. Each such offer or sale shall only be made (A) to
persons whom the offeror or seller reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under
the Securities Act) or (B) non-U.S. persons outside the United
States to whom the offeror or seller reasonably believes
offers and sales of the Securities may be made in reliance
upon Regulation S under the Securities Act, upon the terms and
conditions set forth in Annex I hereto, which Annex I is
hereby expressly made a part hereof.
(ii) No General Solicitation. The Securities will be
offered by approaching prospective Subsequent Purchasers on an
individual basis. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the
Securities Act) will be used in the United States in
connection with the offering of the Securities.
(iii) Restrictions on Transfer. Upon original
issuance by the Company, and until such time as the same is no
longer required under the applicable requirements of the
Securities Act, the Securities (and all securities issued in
exchange therefor or in substitution thereof, other than the
Exchange Securities) shall bear the following legend:
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<PAGE> 21
"THE NOTE (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, AND THE NOTE EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH NOTE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I)(A) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT), PURCHASING FOR ITS OWN
ACCOUNT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER
THE SECURITIES ACT, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 OF THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
PROVIDED THAT IN THE CASE OF A TRANSFER PURSUANT TO CLAUSE (D) SUCH
TRANSFER IS EFFECTED BY THE DELIVERY TO THE TRANSFEREE OF DEFINITIVE
SECURITIES REGISTERED IN ITS NAME (OR ITS NOMINEES NAME) IN THE BOOKS
MAINTAINED BY THE REGISTRAR, AND IS SUBJECT TO THE RECEIPT BY THE
REGISTRAR (AND THE ISSUER, IF THEY SO REQUEST) OF A CERTIFICATION OF
THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (II) TO THE ISSUER
OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTE
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
Following the sale of the Securities by the Initial Purchasers
to Subsequent Purchasers pursuant to the terms hereof, the
Initial Purchasers shall not be liable or responsible to the
Company for any losses, damages or liabilities suffered or
incurred by the Company, including any losses, damages or
liabilities under the Securities Act, arising from or relating
to any resale or transfer of any Security.
Section 8. Indemnification.
(a) Indemnification of the Initial Purchasers. The Company and
each of the Guarantors jointly and severally agree to indemnify and
hold harmless each Initial Purchaser, its directors, officers and
employees, and each person, if any, who controls any Initial Purchaser
within the meaning of the Securities Act and the Exchange Act against
any loss, claim, damage, liability or expense, as incurred, to which
such Initial Purchaser or such controlling person may become subject,
under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, or at common law (including in settlement
of any litigation, if such settlement is effected with the written
consent of the Company), insofar as such loss, claim, damage, liability
or expense (or actions in respect thereof as contemplated below) arises
out of or is based (i) upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the
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<PAGE> 22
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that none of the Company
and the Guarantors shall be liable in any such case to the extent that
any such loss, claim, damage, liability or expense arises out of, or is
based upon, an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance
upon and in conformity with the written information furnished to the
Company by the Initial Purchasers expressly for use in any Preliminary
Offering Memorandum or the Offering Memorandum (or any amendment or
supplement thereto) and provided, further, that the indemnification
contained in this paragraph (a) with respect to the Preliminary
Offering Memorandum shall not inure to the benefit of the Initial
Purchasers (or to the benefit of any person controlling the Initial
Purchasers) on account of any such loss, claim, damage, liability or
expense arising from the sale of the Securities by the Initial
Purchasers to any person if a copy of the Offering Memorandum shall not
have been delivered or sent to such person and each untrue statement of
a material fact contained in, and each omission or alleged omission of
a material fact from, such Preliminary Offering Memorandum was
corrected in the Offering Memorandum and it shall have been determined
by a final judgment of a court of competent jurisdiction that any
Initial Purchaser and each person, if any, who controls such Initial
Purchaser would not have incurred such losses, claims, damages,
liabilities and expenses had the Offering Memorandum been delivered or
sent.
(b) Indemnification of the Company, its Directors and
Officers. Each Initial Purchaser agrees, severally and not jointly, to
indemnify and hold harmless the Company and each of its directors and
each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, against any loss, claim, damage,
liability or expense, as incurred, to which the Company or any such
director, or controlling person may become subject, under the
Securities Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law (including in settlement of any
litigation, if such settlement is effected with the written consent of
such Initial Purchaser), insofar as such loss, claim, damage, liability
or expense (or actions in respect thereof as contemplated below) arises
out of or is based upon any untrue or alleged untrue statement of a
material fact contained in any preliminary Offering Memorandum
(including the Preliminary Offering Memorandum) or the Offering
Memorandum (or any amendment or supplement thereto), or arises out of
or is based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in any Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto), in reliance upon and in conformity with written information
furnished to the Company by the Initial Purchasers expressly for use
therein; and to reimburse the Company, or any such director or
controlling person for any legal and other expenses reasonably incurred
by the Company, or any such director or controlling person in
connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action. The
Company hereby acknowledges that the only information that the Initial
Purchasers have furnished to the Company expressly for use in any
Preliminary Offering Memorandum or the Offering Memorandum (or any
amendment or supplement thereto) are the statements set forth in the
first three sentences of the third paragraph, the fourth paragraph, the
third sentence of the fifth paragraph and the seventh paragraphs under
the caption "Plan of Distribution" in the Preliminary Offering
Memorandum and the Offering Memorandum; and the Initial Purchasers
confirm that such statements are correct. The indemnity agreement set
forth in this Section 8(b) shall be in addition to any liabilities that
each Initial Purchaser may otherwise have.
(c) Notifications and Other Indemnification Procedures.
Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying
party under this Section 8, notify the indemnifying party in writing of
the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it
is not prejudiced as a proximate result of such failure. In case any
such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to
participate in and, to the extent that it shall elect, jointly
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<PAGE> 23
with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that a conflict may arise between
the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party
of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel
(together with local counsel), approved by the indemnifying party (Banc
of America Securities LLC in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall
be at the expense of the indemnifying party. Each indemnified party, as
a condition to the indemnity agreements contained in Sections 8(a) and
8(b) hereof, shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action.
(d) Settlements. The indemnifying party under this Section 8
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
Section 8(c) hereof, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise
or consent includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
action, suit or proceeding.
Section 9. Contribution. If the indemnification provided for
in Section 8 is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party, as incurred, as a result of any losses, claims, damages,
liabilities or expenses referred to therein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Initial Purchasers, on the other hand, from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand, and the
Initial Purchasers, on the other hand, in connection with the statements or
omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company, on the one hand, and the Initial Purchasers, on the other hand, in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the
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<PAGE> 24
total net proceeds from the offering of the Securities pursuant to this
Agreement (before deducting expenses) received by the Company, and the total
discount received by the Initial Purchasers bear to the aggregate initial
offering price of the Securities. The relative fault of the Company, on the one
hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact or any such inaccurate or alleged inaccurate representation or warranty
relates to information supplied by the Company, on the one hand, or the Initial
Purchasers, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 8(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Initial
Purchaser shall be required to contribute any amount in excess of the discount
received by such Initial Purchaser in connection with the Securities distributed
by it. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute pursuant to this Section 9 are several,
and not joint, in proportion to their respective commitments as set forth
opposite their names in Schedule A. For purposes of this Section 9, each
director, officer and employee of an Initial Purchaser and each person, if any,
who controls an Initial Purchaser within the meaning of the Securities Act and
the Exchange Act shall have the same rights to contribution as such Initial
Purchaser, and each director of the Company, and each person, if any, who
controls the Company with the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as the Company.
Section 10. Termination of this Agreement. Prior to the
Closing Date, this Agreement may be terminated by the Initial Purchasers by
notice given to the Company if at any time (i) trading or quotation in any of
the Company's securities shall have been suspended or limited by the Commission
or by the Nasdaq Stock Market, or trading in securities generally on either the
Nasdaq Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any of federal, New York,
Delaware or California authorities; (iii) there shall have occurred any outbreak
or escalation of national or international hostilities or any crisis or
calamity, or any change in the United States or international financial markets,
or any substantial change or development involving a prospective substantial
change in United States' or international political, financial or economic
conditions, as in the judgment of the Initial Purchasers is material and adverse
and makes it impracticable to market the Securities in the manner and on the
terms described in the Offering Memorandum or to enforce contracts for the sale
of securities; (iv) in the judgment of the Initial Purchasers there shall have
occurred any Material Adverse Change; or (v) the Company shall have sustained a
loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the judgment of the Initial Purchasers may interfere materially
with the conduct of the business and operations of the Company regardless of
whether or not such loss shall have been insured. Any termination pursuant to
this Section 10 shall be without liability on the part of (a) the Company to any
Initial Purchaser, except that the Company shall be obligated to reimburse the
expenses of the Initial Purchasers pursuant to Sections 4 and 6 hereof, (b) any
Initial Purchaser to the Company, or (c) of any party hereto to any other party
except that the provisions of Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
20
<PAGE> 25
Section 11. Representations and Indemnities to Survive
Delivery. The respective indemnities, agreements, representations, warranties
and other statements of the Company, of its officers and of the several Initial
Purchasers set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Initial Purchaser or the Company or any of its or their partners, officers or
directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Securities sold hereunder and any termination of
this Agreement.
Section 12. Notices. All communications hereunder shall
be in writing and shall be mailed, hand delivered or telecopied and confirmed to
the parties hereto as follows:
If to the Initial Purchasers:
Banc of America Securities LLC
231 South LaSalle Street, 18th Floor
Chicago, Illinois 60697
Facsimile: (312) 828-3555
Attention: Leland T. Hart
with a copy (which shall not constitute notice) to:
Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, California 94111
Facsimile: (415) 395-8095
Attention: Gregory K. Miller, Esq.
If to the Company or the Guarantors:
Juno Lighting, Inc.
1300 S. Wolf Road
P.O. Box 5065
Des Plaines, Illinois 60017
Facsimile: (847) 813-8201
Attention: George J. Bilek
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue, Suite 220
Palo Alto, California 94301
Facsimile: (650) 470-4570
Attention: Gregory C. Smith, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
Section 13. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto, including any substitute
Initial Purchasers pursuant to Section 16 hereof, and to the benefit of the
employees, officers and directors and controlling persons referred to in Section
8 and Section 9, and in each case their respective successors, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Securities as such from any of the Initial
Purchasers merely by reason of such
21
<PAGE> 26
purchase.
Section 14. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
Section 15. Governing Law Provisions. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
(a) Consent to Jurisdiction. Any legal suit, action or
proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby ("Related Proceedings") may be
instituted in the federal courts of the United States of America
located in the City and County of New York or the courts of the State
of New York in each case located in the City and County of New York
(collectively, the "Specified Courts"), and each party irrevocably
submits to the non-exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court
(a "Related Judgment"), as to which such jurisdiction is non-exclusive)
of such courts in any such suit, action or proceeding. Service of any
process, summons, notice or document by mail to such party's address
set forth above shall be effective service of process for any suit,
action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of
venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such suit, action or other proceeding
brought in any such court has been brought in an inconvenient forum.
Section 16. Default of One or More of the Several Initial
Purchasers. If any one or more of the several Initial Purchasers shall fail or
refuse to purchase Securities that it or they have agreed to purchase hereunder
on the Closing Date, and the aggregate number of Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase does not exceed 10% of the aggregate number of the Securities to be
purchased on such date, the other Initial Purchasers shall be obligated,
severally, in the proportions that the number of Securities set forth opposite
their respective names on Schedule A bears to the aggregate number of Securities
set forth opposite the names of all such non-defaulting Initial Purchasers, or
in such other proportions as may be specified by the Initial Purchasers with the
consent of the non-defaulting Initial Purchasers, to purchase the Securities
which such defaulting Initial Purchaser or Initial Purchasers agreed but failed
or refused to purchase on such date. If any one or more of the Initial
Purchasers shall fail or refuse to purchase Securities and the aggregate number
of Securities with respect to which such default occurs exceeds 10% of the
aggregate number of Securities to be purchased on the Closing Date, and
arrangements satisfactory to the Initial Purchasers and the Company for the
purchase of such Securities are not made within 48 hours after such default,
this Agreement shall terminate without liability of any party to any other party
except that the provisions of Section 4, Section 6, Section 8 and Section 9
shall at all times be effective and shall survive such termination. In any such
case either the Initial Purchasers or the Company shall have the right to
postpone the Closing Date, as the case may be, but in no event for longer than
seven days in order that the required changes, if any, to the Offering
Memorandum or any other documents or arrangements may be effected.
As used in this Agreement, the term "Initial Purchaser" shall
be deemed to include any person substituted for a defaulting Initial Purchaser
under this Section 10. No action taken under this Section 16 nor the termination
of portions of this Agreement shall relieve any defaulting Initial Purchaser
from liability in respect of any default of such Initial Purchaser under this
Agreement.
Section 17. General Provisions. This Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may be
executed in two or more counterparts, each one of which shall be an original,
with the same effect as if the signatures thereto and hereto were
22
<PAGE> 27
upon the same instrument. This Agreement may not be amended or modified unless
in writing by all of the parties hereto, and no condition herein (express or
implied) may be waived unless waived in writing by each party whom the condition
is meant to benefit. The Table of Contents and the section headings herein are
for the convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.
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<PAGE> 28
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
JUNO LIGHTING, INC.
By: /s/ JOEL W. CHEMERS
----------------------------------------
Name: Joel W. Chemers
Title: Vice President, Corporate Planning
JUNO MANUFACTURING, INC.
By: /s/ JOEL W. CHEMERS
----------------------------------------
Name: Joel W. Chemers
Title:
INDY LIGHTING, INC.
By: /s/ JOEL W. CHEMERS
----------------------------------------
Name: Joel W. Chemers
Title:
ADVANCED FIBEROPTIC
TECHNOLOGIES, INC.
By: /s/ JOEL W. CHEMERS
----------------------------------------
Name: Joel W. Chemers
Title:
24
<PAGE> 29
The foregoing Purchase Agreement is hereby confirmed and
accepted by the Initial Purchasers as of the date first above written.
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
By: Banc of America Securities LLC
By: /s/ LELAND HART
---------------------------------------
Name: Leland Hart
Title: Vice President
25
<PAGE> 30
SCHEDULE A
Aggregate Principal
Initial Purchasers Amount of Securities
to be Purchased
Banc of America Securities LLC......................... $ 81,250,000
Credit Suisse First Boston Corporation................. 43,750,000
Total............................................. $ 125,000,000
<PAGE> 31
EXHIBIT A
SUBSIDIARIES
Juno Manufacturing, Inc.
Indy Lighting, Inc.
Advanced Fiberoptic Technologies, Inc.
Juno Lighting, Ltd.
A-1
<PAGE> 32
EXHIBIT B
Opinion of counsel for the Company to be delivered pursuant to
Section 5(c) of the Purchase Agreement.
B-1
<PAGE> 33
EXHIBIT C
Opinion of counsel for the Investor to be delivered pursuant
to Section 5(d) of the Purchase Agreement.
C-1
<PAGE> 34
ANNEX I
Resale Pursuant to Regulation S or Rule 144A. Each Initial Purchaser
understands that:
(a) Such Initial Purchaser agrees that it has not offered or sold and
will not offer or sell the Securities in the United States or to, or for the
benefit or account of, a U.S. Person (other than a distributor), in each case,
as defined in Rule 902 under the Securities Act (i) as part of its distribution
at any time and (ii) otherwise until 40 days after the later of the commencement
of the offering of the Securities pursuant hereto and the Closing Date, other
than in accordance with Regulation S of the Securities Act or another exemption
from the registration requirements of the Securities Act. Such Initial Purchaser
agrees that, during such 40-day restricted period, it will not cause any
advertisement with respect to the Securities (including any "tombstone"
advertisement) to be published in any newspaper or periodical or posted in any
public place and will not issue any circular relating to the Securities, except
such advertisements as are permitted by and include the statements required by
Regulation S.
(b) Such Initial Purchaser agrees that, at or prior to confirmation of
a sale of Securities by it to any distributor, dealer or person receiving a
selling concession, fee or other remuneration during the 40-day restricted
period referred to in Rule 903(c)(2) under the Securities Act, it will send to
such distributor, dealer or person receiving a selling concession, fee or other
remuneration a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered and sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of your distribution at any
time or (ii) otherwise until 40 days after the later of the date the
Notes were first offered to persons other than "distributors" (as
defined in Regulation S) in reliance upon Regulation S and the Closing
Date, except in either case in accordance with Regulation S under the
Securities Act (or Rule 144A or to Accredited Institutions in
transactions that are exempt from the registration requirements of the
Securities Act), and in connection with any subsequent sale by you of
the Notes covered hereby in reliance on Regulation S during the period
referred to above to any distributor, dealer or person receiving a
selling concession, fee or other remuneration, you must deliver a
notice to substantially the foregoing effect. Terms used above have the
meanings assigned to them in Regulation S."
<PAGE> 1
EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
JUNO LIGHTING, INC.
Juno Lighting, Inc. (the "Corporation"), a corporation organized and
duly existing under the General Corporation Law of the State of Delaware (the
"GCL") does hereby certify as follows:
(a) The original certificate of incorporation of the Corporation was
filed with the office of the Secretary of State of the State of Delaware on July
13, 1983.
(b) This Amended and Restated Certificate of Incorporation was duly
adopted by the Board of Directors of the Corporation (the "Board of Directors")
and by the stockholders of the Corporation in accordance with Sections 242 and
245 of the GCL.
(c) This Amended and Restated Certificate of Incorporation restates and
integrates and further amends the certificate of incorporation of the
Corporation, as heretofore amended or supplemented (the "Certificate of
Incorporation").
(d) The text of the Certificate of Incorporation is hereby amended and
restated in its entirety as follows:
<PAGE> 2
FIRST: The name of the Corporation is Juno Lighting, Inc. (hereinafter
the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1209 Orange Street, in the City of Wilmington, County of
New Castle. The name of its registered agent at that address is The Corporation
Trust Company
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the
"GCL").
FOURTH:
A. The total number of shares of stock which the Corporation shall have
authority to issue is Fifty Million (50,000,000) shares of capital stock,
consisting of Forty-Five Million (45,000,000) shares of Common Stock, each
having a par value of $0.001 per share, and Five Million (5,000,000) shares of
Preferred Stock, each having a par value of $0.001 per share, of which One
Million Sixty Thousand (1,060,000) shares shall be designated Series A
Convertible Preferred Stock (the "Series A Preferred").
B. The Board of Directors is expressly authorized to provide for the
issuance of all or any of the remaining shares of the Preferred Stock in one or
more classes or series, and to fix for each such class or series such voting
powers, full or limited, or no voting powers, and such distinctive designations,
preferences and relative, participating, optional or other special rights and
such qualifications, limitations or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions adopted by the Board of Directors
providing for the issuance of such class or series and as may be permitted by
the GCL, including, without limitation, the authority to provide that any such
class or series may be (i) subject to redemption at such time or times and at
such price or prices; (ii) entitled to receive dividends (which may be
cumulative or non-cumulative) at such rates, on such conditions, and at such
times, and payable in preference to, or in such relation to, the dividends
payable on any other class or classes or any other series; (iii) entitled to
such rights upon the dissolution of, or upon any distribution of the assets of,
the Corporation; or
2
<PAGE> 3
(iv) convertible into, or exchangeable for, shares of any other class or classes
of stock, or of any other series of the same or any other class or classes of
stock, of the Corporation at such price or prices or at such rates of exchange
and with such adjustments; all as may be stated in such resolution or
resolutions.
C. The rights, preferences, privileges, restrictions and other matters
relating to the Series A Preferred are as follows:
1. Dividends
(a) The holders of shares of Series A Preferred shall be entitled to
receive, whether or not declared by the Board of Directors, cumulative quarterly
dividends equal to the greater of: (i) dividends which would have been payable
to such holders of shares of Series A Preferred in such quarter had such holders
converted such shares of Series A Preferred into Common Stock immediately prior
to the record date of any dividend declared on the Common Stock in such quarter,
or (ii) 2% of the Stated Amount (as defined below) per share. Dividends payable
in respect of outstanding shares of Series A Preferred shall begin to accrue and
compound quarterly (by virtue of the increase to the Stated Amount per share in
accordance with Section 1(b) hereof) on the last day of each of November,
February, May and August in each year (each such date being a "Quarterly
Dividend Accrual Date") commencing in respect of each outstanding share of
Series A Preferred on the first Quarterly Dividend Accrual Date occurring on or
after the date that the first share of Preferred Stock is issued (the "Original
Issuance Date"), and continuing up to and including the last Quarterly Dividend
Accrual Date occurring on or prior to the fifth anniversary of the Original
Issuance Date (the "Final Quarterly Dividend Accrual Date"). For purposes
hereof, the Stated Amount shall mean $100 per share, as adjusted pursuant to
Section 1(b).
(b) The dividend set forth in Section 1(a) hereof shall be not be
payable in cash, but shall be payable by an increase, effective on each
Quarterly Dividend Accrual Date, in the Stated Amount Per Share equal to all
dividends which have accumulated on each outstanding share of Series A Preferred
during the quarterly period ending on the Quarterly Dividend Accrual Date (or
for such shorter period beginning on the date of issuance in the case of the
initial Quarterly Dividend Accrual Date).
3
<PAGE> 4
(c) With respect to periods after the Final Quarterly Dividend
Accrual Date, the holders of shares of Series A Preferred shall be entitled to
receive, on the last day of such fiscal quarter and each fiscal quarter
thereafter (each such date, a "Cash Dividend Payment Date") out of funds legally
available for such purpose, cash dividends in an amount equal to the greater of:
(i) dividends which would have been payable to such holders of shares of Series
A Preferred in such quarter had such holders converted such shares of Series A
Preferred into Common Stock immediately prior to the record date of any dividend
declared on the Common Stock in such quarter, or (ii) 2% of the Stated Amount
then in effect. Such dividends shall be cumulative and shall accrue from and
after each Cash Dividend Payment Date whether or not declared by the Board of
Directors and whether or not there are any funds of the Corporation legally
available for the payment of dividends. Accrued but unpaid dividends shall not
bear interest.
(d) The Board of Directors of the Corporation may fix a record date
for the determination of holders of Series A Preferred entitled to receive
payment of a dividend thereon pursuant to Section 1(a) or Section 1(c) hereof,
which record date shall be no more than sixty (60) days prior to the date fixed
for the payment thereof. All cash payments shall be made in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
(e) As long as any shares of Series A Preferred shall remain
outstanding, in no event shall any dividend be declared or paid upon, nor shall
any distribution be made upon, any capital stock of the Corporation other than
the Series A Preferred ("Junior Capital Stock"), including the Common Stock,
other than a dividend or distribution payable solely in shares of Common Stock,
nor shall any Junior Capital Stock be purchased or redeemed by the Corporation,
nor shall any monies be paid to or made available for a sinking fund for the
purchase or redemption of shares of any Junior Capital Stock, unless, in each
such case, (i) full cumulative dividends payable pursuant to Section 1(c) hereof
on the outstanding shares of Series A Preferred have been declared and paid and
(ii) any arrears or defaults in any redemption of shares of Series A Preferred
shall have been cured.
2. Protective Provisions
So long as at least 500,000 shares of Series A Preferred shall be
outstanding and unless the consent or approval of a greater number of shares
shall then be required by law, without first obtaining the consent or approval
of the holders
4
<PAGE> 5
of a majority of the number of then-outstanding shares of Series A Preferred
Stock, given in person or by proxy at a meeting at which the holders of such
shares shall be entitled to vote separately as a class, or by written consent,
the Corporation shall not:
(a) authorize or create any class or series, or any shares of any
class or series, of capital stock of the Corporation having any preference or
priority (either as to dividends or upon redemption, liquidation, dissolution,
or winding up) over the Series A Preferred ("Senior Stock");
(b) authorize or create any class or series, or any shares of any
class or series, of capital stock of the Corporation ranking on parity (either
as to dividends or upon redemption, liquidation, dissolution or winding up) with
the Series A Preferred ("Parity Stock"); or
(c) reclassify, convert or exchange any shares of any capital stock
of the Corporation into shares of Senior Stock or Parity Stock;
(d) authorize any security exchangeable for, convertible into, or
evidencing the right to purchase any shares of Senior Stock or Parity Stock;
(e) amend, alter, repeal or waive any provision of the Corporation's
Certificate of Incorporation, as it may be amended from time to time, or the
Corporation's By-Laws, as they may be amended from time to time, to alter or
change the powers, designations, preferences, rights and qualifications,
limitations or restrictions of Series A Preferred Stock;
(f) redeem or repurchase any, shares of Junior Capital Stock, other
than from time to time during the period in which shares of Series A Preferred
Stock are outstanding, redemptions or repurchases of Junior Stock held by
management of the Corporation in connection with termination of employment,
retirement and similar circumstances; or
(g) increase or decrease the number of authorized shares of
Preferred Stock, Common Stock or any other capital stock of the Company.
3. Redemption
(a) Subject to the provisions of any credit agreement, loan
agreement or indenture entered into by the Corporation, the Corporation may, at
any
5
<PAGE> 6
time after the ninth anniversary of the original Issuance Date, redeem, out of
funds legally available therefor, all, but not less than all, outstanding shares
of Series A Preferred Stock by paying for each share of Series A Preferred an
amount in cash equal to the Stated Amount then in effect plus the amount of any
accumulated but unpaid cash dividends as of the Redemption Date (as defined
below).
(b) Notice of any redemption of shares of Series A Preferred
pursuant to Section 3(a) (the "Redemption Notice") shall be mailed not less than
60 days prior to the date fixed for redemption to each holder of shares of
Series A Preferred to be redeemed, at such holder's address as it appears on the
transfer books of the Corporation, notifying each such holder of the redemption
to be effected and specifying the redemption date (the "Redemption Date"),
redemption price (the "Redemption Price"), the place at which payment may be
obtained and requesting each such holder to surrender to the Corporation, in the
manner and at the place designated, his certificate or certificates representing
the shares of Series A Preferred to be redeemed. On or after the Redemption
Date, each holder of Series A Preferred who has not previously elected to
convert its shares of Series A Preferred into Common Stock pursuant to Section 5
hereof shall surrender to the Corporation the certificate or certificates
representing such shares, in the manner and at the place designated in the
Redemption Notice, and thereupon the Redemption Price of such shares shall be
payable to the order of the person whose name appears on such certificate or
certificates as the owner thereof and each surrendered certificate shall be
cancelled. In order to facilitate the redemption of shares of Series A
Preferred, the Board may fix a record date for the determination of the holders
of shares of Series A Preferred to be redeemed, not more than 60 days or less
than 10 days prior to the date fixed for such redemption.
(c) From and after any Redemption Date, unless there shall have been
a default in payment of the Redemption Price, all rights of the holders of
shares of Series A Preferred shall cease with respect to such shares, and such
shares shall not thereafter be transferred on the books of the Corporation or be
deemed to be outstanding for any purpose whatsoever.
(d) On or prior to any Redemption Date, the Corporation shall
deposit the aggregate Redemption Price of all shares of Series A Preferred with
a bank or trust corporation having aggregate capital and surplus in excess of
$100,000,000 as a trust fund for the benefit of the respective holders of the
shares of Series A Preferred not yet redeemed, with irrevocable instructions and
authority to the bank or trust corporation to pay the Redemption Price for such
shares to their
6
<PAGE> 7
respective holders on or after the Redemption Date upon receipt of notification
from the Corporation that such holder has surrendered his share certificate to
the Corporation pursuant to section 3(b) above. As of the Redemption Date, the
deposit shall constitute full payment of the shares to their holders, and from
and after the Redemption Date the shares so called for redemption shall be
redeemed and deemed to be no longer outstanding, and the holders thereof shall
cease to be stockholders with respect to such shares and shall have no rights
with respect thereto except the right to receive from the bank or trust
corporation payment of the Redemption Price of the shares, without interest,
upon surrender of certificates therefor. Such instructions shall also provide
that any moneys deposited by the Corporation pursuant to this Section 3(d) for
the redemption of shares thereafter converted into shares of the Corporation's
Common Stock pursuant to Section 5 hereof prior to the Redemption Date shall be
returned to the Corporation forthwith upon such conversion. The balance of any
moneys deposited by the Corporation pursuant to this Section 3(d) remaining
unclaimed at the expiration of two (2) years following the Redemption Date shall
thereafter be returned to the Corporation upon its request expressed in a
resolution of the Board of Directors.
4. Liquidation, Dissolution or Winding Up
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series A
Preferred then outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders, before any payment
shall be made to the holders of any shares of Junior Capital Stock by reason of
their ownership thereof, an amount (the "Liquidation Preference") equal to the
greater of (i) the amount the holders of Series A Preferred would have received
had they converted their shares of Preferred Stock into Common Stock, in
accordance with the provisions of Section 5 hereof, immediately prior to such
liquidation, dissolution or winding up and (ii) the Stated Amount then in effect
plus (A) if such liquidation, dissolution or winding up occurs prior to the
Final Quarterly Dividend Accrual Date, the increase in the Stated Amount which
would have occurred on the Quarterly Dividend Accrual Date next following such
liquidation, dissolution or winding up, pro rated to the date of such
liquidation, dissolution or winding up or (B) if such liquidation, dissolution
or winding up occurs after the Final Quarterly Dividend Accrual Date, the amount
of any accumulated but unpaid cash dividends as of the date of such event. If
upon any such liquidation, dissolution or winding up of the Corporation the
remaining assets of the Corporation available for distribution to its
stockholders shall be insufficient to pay the holders of shares of Series A
Preferred
7
<PAGE> 8
the full amount to which they shall be entitled pursuant to this Section 4(a),
the holders of shares of Series A Preferred, and any other shares ranking on a
parity therewith, shall share ratably in any distribution of the remaining
assets and funds of the Corporation in proportion to the respective amounts
which would otherwise be payable in respect of the shares of Series A Preferred
held by them upon such distribution if all amounts payable on or with respect to
such shares were paid in full.
(b) After the payment of all amounts required to be paid pursuant to
Section 4(a) to the holders of shares of Series A Preferred, and any other
shares ranking on a parity therewith, upon the dissolution, liquidation or
winding up of the Corporation, the holders of shares of Junior Capital Stock
then outstanding shall share in any distribution of the remaining assets and
funds of the Corporation in the manner provided by law, in the Amended and
Restated Certificate of Incorporation of the Corporation, as amended, or as
provided in any pertinent Certificate of Designations of the Corporation, as the
case may be.
(c) For purposes of this Section 4, (i) any acquisition of the
Corporation by means of a merger or other form of corporate reorganization in
which outstanding shares of the Corporation are exchanged for securities or
other consideration issued, or caused to be issued, by the acquiring corporation
or its subsidiary (other than a mere reincorporation transaction), (ii) any
other transaction or series of transactions which result in the voting
securities of the Company outstanding immediately prior thereto representing
less than 50% of the combined voting power of the Corporation immediately after
such transaction or (iii) any sale of all or substantially all of the assets of
the Corporation other than to a subsidiary of the Corporation, shall be treated
as a liquidation, dissolution or winding up of the Corporation and shall entitle
the holders of Preferred Stock to receive at the closing of such transaction the
Liquidation Preference.
5. Conversion
(a) Subject to the terms and conditions of this Section 5, the
holder of any share or shares of Series A Preferred shall have the right, at
his, her or its option at any time, to convert any such shares of Series A
Preferred into such number of fully paid and nonassessable whole shares of
Common Stock as is obtained by dividing (i) the Stated Amount per share then in
effect plus (A) if such conversion occurs prior to the Final Quarterly Dividend
Accrual Date, the increase in the Stated Amount which would have occurred on the
Quarterly Dividend Accrual Date next following such conversion, pro rated to the
date of such conversion or (B)
8
<PAGE> 9
if such conversion occurs after the Final Quarterly Dividend Accrual Date, the
amount of any accumulated but unpaid cash dividends as of the date of such
conversion, by (ii) the conversion price of $26.25 per share, or, if there has
been an adjustment of the conversion price, by the conversion price as last
adjusted and in effect at the date any share or shares of Series A Preferred are
surrendered for conversion (such price, or such price as last adjusted, being
referred to herein as the "Conversion Price"). Such right of conversion shall be
exercised by the holder thereof by giving written notice that the holder elects
to convert a stated number of shares of Series A Preferred into Common Stock and
by surrender of a certificate or certificates for the shares so to be converted
to the Corporation at its principal office (or such other office or agency of
the Corporation as the Corporation may designate by notice in writing to the
holder or holders of the Series A Preferred) at any time during its usual
business hours on the date set forth in such notice, together with a statement
of the name or names (with address), subject to compliance with applicable laws
to the extent such designation shall involve a transfer, in which the
certificate or certificates for shares of Common Stock shall be issued.
(b) Promptly after the receipt by the Corporation of the written
notice referred to in Section 5(a) above and surrender of the certificate or
certificates for the share or shares of the Series A Preferred to be converted,
the Corporation shall issue and deliver, or cause to be issued and delivered, to
the holder, registered in such name or names as such holder may direct, subject
to compliance with applicable laws to the extent such designation shall involve
a transfer, a certificate or certificates for the number of whole shares of
Common Stock issuable upon the conversion of such share or shares of Series A
Preferred. To the extent permitted by law, such conversion shall be deemed to
have been effected and the Conversion Price shall be determined as of the close
of business on the date on which such written notice shall have been received by
the Corporation and the certificate or certificates for such share or shares
shall have been surrendered as aforesaid, and at such time the rights of the
holder of such shares or shares of Series A Preferred shall cease, and the
person or persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares represented thereby.
(c) (i) No fractional shares shall be issued upon conversion of the
Series A Preferred into Common Stock and the number of shares of Common Stock to
be issued shall be rounded to the nearest whole share. If any fractional
interest in a share of Common Stock would, except for the provisions of
9
<PAGE> 10
this Section 5(c), be deliverable upon any such conversion, the Corporation, in
lieu of delivering the fractional share thereof, shall pay to the holder
surrendering the Preferred Stock for conversion an amount in cash equal to the
current fair market value of such fractional interest based upon the closing
price of the Common Stock on the NASDAQ National Market or, any other national
securities exchange on which such Common Stock is then traded, on the trading
day prior to the date of the notice of conversion, or if such Common Stock is
not then traded on a national securities exchange, as determined in good faith
by the Board of Directors of the Corporation.
(ii) In case the number of shares of Series A Preferred
represented by the certificate or certificates surrendered pursuant to Section
5(a) exceeds the number of shares converted, the Corporation shall, upon such
conversion, execute and deliver to the holder thereof, at the expense of the
Corporation, a new certificate or certificates for the number of shares of
Series A Preferred Stock represented by the certificate or certificates
surrendered which are not to be converted.
(d) In the event that the Corporation shall declare or pay, without
consideration, any dividend or other distribution on the then outstanding shares
of Common Stock payable in Common Stock or in any right to acquire Common Stock
for no consideration (other than any dividend or distribution made pursuant to
any rights agreement entered into by the Company after the date hereof, the
terms of which provide for a dividend or distribution to be made upon the
occurrence of events substantially similar to those events which would have
resulted in a dividend or distribution under the terms of that certain Rights
Agreement between the Company and The First National Bank of Chicago, as Rights
Agent, dated as of August 3, 1989, as in effect immediately prior to the date
hereof (any such dividend or distribution, a "Rights Plan Distribution")), or
shall effect a subdivision of the outstanding shares of Common Stock into a
greater number of shares of Common Stock (by stock split, reclassification or
otherwise than by payment of a dividend in Common Stock or in any right to
acquire Common Stock), or in the event that the then outstanding shares of
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, then the applicable
Conversion Price for the Series A Preferred in effect immediately prior to such
event shall, concurrently with the effectiveness of such event, be
proportionately decreased or increased, as appropriate. In the event that the
Corporation shall declare or pay, without consideration, any dividend on the
10
<PAGE> 11
then outstanding shares of Common Stock payable in any right to acquire Common
Stock for no consideration, then the Corporation shall be deemed to have made a
dividend payable in Common Stock in an amount of shares equal to the maximum
number of shares issuable upon exercise of such rights to acquire Common Stock.
(e) In the event that the Corporation shall declare or pay, without
consideration, any dividend or other distribution on the then outstanding shares
of Common Stock payable in securities of the Corporation other than Common Stock
or in any right to acquire securities of the Corporation other than Common Stock
for no consideration (other than a Rights Plan Distribution) and other than as
otherwise adjusted in this Section 5, then in each such event provision shall be
made so that the holders of the Series A Preferred shall be entitled to receive
a proportionate share of any such dividend or distribution as though they were
the holders of the number of shares of Common Stock of the corporation into
which their shares of Series A Preferred are convertible as of the record date
fixed for the determination of the holders of Common Stock of the corporation
entitled to receive such dividend or other distribution.
(f) If the Common Stock issuable upon conversion of the Series A
Preferred shall be changed into the same or a different number of shares of any
other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
provided for in Section 5(d) above or a merger or other reorganization referred
to in Section 4(c) above), the Conversion Price then in effect shall,
concurrently with the effectiveness of such reorganization or reclassification,
be proportionately adjusted so that the Series A Preferred shall be convertible
into, in lieu of the number of shares of Common Stock which the holders would
otherwise have been entitled to receive, a number of shares of such other class
of classes of stock equivalent to the number of shares of Common Stock that
would have been subject to receipt by the holders upon conversion of the Series
A Preferred immediately before that change. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section 5
with respect to the rights of the holders of Series A Preferred after the
capital reorganization, reclassification or other action to the end that the
provisions of this Section 5 (including adjustment of the Conversion Price then
in effect and the number of shares issuable upon conversion of the Series A
Preferred) shall be applicable after such action and be as nearly equivalent as
possible.
(g) Upon any adjustment of the Conversion Price, then and in each
such case the Corporation shall give written notice thereof, by first class
11
<PAGE> 12
mail, postage prepaid, addressed to each holder of shares of Series A Preferred
at the address of such holder as shown on the books of the Corporation (or its
transfer agent, if any), which notice shall state the Conversion Price resulting
from such adjustment, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
(h) In case at any time:
(i) the Corporation shall declare any dividend upon its Common
Stock payable in cash or stock or make any other distribution to the holders of
its Common Stock;
(ii) the Corporation shall offer for subscription pro rata to
the holders of its Common Stock any additional shares of stock of any class or
other rights;
(iii) there shall be any reorganization, recapitalization or
reclassification of the capital stock of the Corporation (a "Reorganization") or
the Corporation shall enter into an agreement with respect to any transaction
described in Section 4(c) hereof (a "Change of Control Transaction"); or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then, in any one or more of said cases, the Corporation shall give, by first
class mail, postage prepaid, addressed to each holder of any shares of Series A
Preferred at the address of such holder as shown on the books of the Corporation
(or its transfer agent, if any), (A) at least 15 days' prior written notice of
the date on which the books of the Corporation (or its transfer agent) shall
close or a record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of any such Reorganization
or Change of Control Transaction, and (B) in the case of any such Reorganization
or Change of Control Transaction, at least 15 days' prior written notice of the
date when the same shall take place. Such notice in accordance with the
foregoing clause (A) shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the holders of Common
Stock shall be entitled thereto, and such notice in accordance with the
foregoing clause (B) shall also specify the date on which the holders of Common
Stock shall be entitled to exchange their Common Stock for securities or other
12
<PAGE> 13
property deliverable upon such Reorganization or Change of Control Transaction,
as the case may be.
(i) All outstanding shares of Convertible Preferred Stock shall, at
the option of the Corporation, be automatically converted into Common Stock, in
accordance with the provisions of this Section 5, if at any time the number of
outstanding shares of Series A Preferred is less than or equal to 250,000.
(j) The Corporation will at all times reserve and keep available out
of its authorized but unissued Common Stock, solely for the purpose of issuance
upon the conversion of the Series A Preferred as herein provided, such number of
shares of Common Stock as shall then be issuable upon the conversion of all
outstanding shares of Series A Preferred. All shares of Common Stock which shall
be so issued shall be duly and validly issued and fully paid and nonassessable
and free from all taxes, liens and charges arising out of or by reason of the
issue thereof, and, without limiting the generality of the foregoing, the
Corporation covenants that it will from time to time take all such action as may
be requisite to assure that the par value per share of the Common Stock is at
all times equal to or less than the effective Conversion Price. The Corporation
will take all such action within its control as may be necessary on its part to
assure that all such shares of Common Stock may be so issued without violation
of any applicable law or regulation, or of any requirements of any national
securities exchange upon which the Common Stock of the Corporation may be
listed.
(k) Shares of Series A Preferred that are converted into shares of
Common Stock as provided herein shall not be reissued.
(l) The issuance of certificates for shares of Common Stock upon
conversion of the Series A Preferred Stock shall be made without charge to the
holders thereof for any issuance tax in respect thereof, provided that the
Corporation shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any certificate in a
name other than that of the holder of Series A Preferred which is being
converted.
(m) The Corporation will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the corporation, but will at all times in
good
13
<PAGE> 14
faith assist in the carrying out of all the provisions of this Section 5 and in
the taking of all such action as may be necessary or appropriate in order to
protect the conversion rights of the holders of the Series A Preferred against
impairment.
6. Voting Except as otherwise provided by law or in Section 2 above,
the holders of the Series A Preferred shall vote together with the holders of
Common Stock on all matters to be voted on by the stockholders of the
Corporation, and each holder of Series A Preferred shall be entitled to one vote
for each whole share of Common Stock that would be issuable to such holder upon
the conversion of all the shares of Series A Preferred held by such holder on
the record date for the determination of stockholders entitled to vote.
FIFTH: [INTENTIONALLY OMITTED]
SIXTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
(1) The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors.
(2) The directors shall have concurrent power with the stockholders to
make, alter, amend, change, add to or repeal the By-Laws of the
Corporation.
(3) The number of directors of the Corporation shall be as from time to
time fixed by, or in the manner provided in, the By-Laws of the
Corporation. Election of directors need not be by written ballot unless the
By-Laws so provide.
(4) No director shall be personally liable to the Corporation or any of
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived
an improper personal benefit. Any repeal
14
<PAGE> 15
or modification of this Article SIXTH by the stockholders of the
Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or
modification with respect to acts or omissions occurring prior to such
repeal or modification.
(5) In addition to the powers and authority hereinbefore or by statute
expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation, subject, nevertheless, to the
provisions of the GCL, this Amended and Restated Certificate of
Incorporation, and any By-Laws adopted by the stockholders; provided,
however, that no By-Laws hereafter adopted by the stockholders shall
invalidate any prior act of the directors which would have been valid if
such By-Laws had not been adopted.
SEVENTH: Meetings of stockholders may be held within or without the
State of Delaware, as the By-Laws may provide. The books of the Corporation may
be kept (subject to any provision contained in the GCL) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the By-Laws of the Corporation.
EIGHTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
15
<PAGE> 16
I, THE UNDERSIGNED, being the President of the Corporation hereby
declare and certify that this is my act and deed and the facts herein stated are
true, and accordingly have hereunto set my hand this 30th day of June, 1999.
/s/ Glenn R. Bordfeld
--------------------------------------------
Name: Glenn R. Bordfeld
Title: President, Chief Operating Officer
16
<PAGE> 1
EXHIBIT 4.1
JUNO LIGHTING, INC.
SERIES A AND SERIES B
11% SENIOR SUBORDINATED NOTES DUE 2009
INDENTURE
Dated as of June 30, 1999
JUNO MANUFACTURING, INC.
INDY LIGHTING, INC.
ADVANCED FIBEROPTIC TECHNOLOGIES, INC.
Guarantors
FIRSTAR BANK OF MINNESOTA, N.A.
Trustee
i
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
310 (a)(1)............................................................. 7.10
(a)(2)............................................................. 7.10
(a)(3)............................................................. N.A.
(a)(4)............................................................. N.A.
(a)(5)............................................................. 7.10
(b)................................................................ 7.10
(c)................................................................ N.A.
311 (a)................................................................ 7.11
(b)................................................................ 7.11
(c)................................................................ N.A.
312 (a)................................................................ 2.05
(b)................................................................ 12.03
(c)................................................................ 12.03
313 (a)................................................................ 7.06
(b)(2)............................................................. 7.07
(c)................................................................ 7.06; 12.02
(d)................................................................ 7.06
314 (a)................................................................ 4.03; 12.02
(c)(1)............................................................. 12.04
(c)(2)............................................................. 12.04
(c)(3)............................................................. N.A.
(e)................................................................ 12.05
(f)................................................................ N.A.
315 (a)................................................................ 7.01
(b)................................................................ 7.05; 12.02
(c)................................................................ 7.01
(d)................................................................ 7.01
(e)................................................................ 6.11
316 (a) (last sentence)................................................ 2.09
(a)(1)(A).......................................................... 6.05
(a)(1)(B).......................................................... 6.04
(a)(2)............................................................. N.A.
(b)................................................................ 6.07
(c)................................................................ 2.12
317 (a)(1)............................................................. 6.08
(a)(2)............................................................. 6.09
(b)................................................................ 2.04
318 (a)................................................................ 12.01
(b)................................................................ N.A.
(c)................................................................ 12.01
</TABLE>
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
ii
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
Section 1.01. Definitions.....................................................................................1
Section 1.02. Other Definitions..............................................................................18
Section 1.03. Incorporation by Reference of Trust Indenture Act..............................................18
Section 1.04. Rules of Construction..........................................................................19
ARTICLE 2 THE NOTES
Section 2.01. Form and Dating................................................................................19
Section 2.02. Execution and Authentication...................................................................20
Section 2.03. Registrar and Paying Agent.....................................................................20
Section 2.04. Paying Agent to Hold Money in Trust............................................................21
Section 2.05. Holder Lists...................................................................................21
Section 2.06. Transfer and Exchange..........................................................................21
Section 2.07. Replacement Notes..............................................................................32
Section 2.08. Outstanding Notes..............................................................................32
Section 2.09. Treasury Notes.................................................................................32
Section 2.10. Temporary Notes................................................................................32
Section 2.11. Cancellation...................................................................................33
Section 2.12. Defaulted Interest.............................................................................33
ARTICLE 3 REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.............................................................................33
Section 3.02. Selection of Notes to Be Redeemed..............................................................33
Section 3.03. Notice of Redemption...........................................................................34
Section 3.04. Effect of Notice of Redemption.................................................................34
Section 3.05. Deposit of Redemption Price....................................................................35
Section 3.06. Notes Redeemed in Part.........................................................................35
Section 3.07. Optional Redemption............................................................................35
Section 3.08. Mandatory Redemption...........................................................................36
Section 3.09. Offer to Purchase by Application of Excess Proceeds............................................36
ARTICLE 4 COVENANTS
Section 4.01. Payment of Notes...............................................................................37
Section 4.02. Maintenance of Office or Agency................................................................38
Section 4.03. Reports........................................................................................38
Section 4.04. Compliance Certificate.........................................................................39
Section 4.05. Taxes..........................................................................................39
Section 4.06. Stay, Extension and Usury Laws.................................................................39
Section 4.07. Restricted Payments............................................................................40
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.................................42
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.....................................43
Section 4.10. Asset Sales....................................................................................45
Section 4.11. Transactions with Affiliates...................................................................47
Section 4.12. Liens..........................................................................................48
Section 4.13. Line of Business...............................................................................48
Section 4.14. Corporate Existence............................................................................48
Section 4.15. Offer to Repurchase Upon Change of Control.....................................................48
</TABLE>
iii
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<TABLE>
<S> <C> <C>
Section 4.16. No Senior Subordinated Debt....................................................................49
Section 4.17. Limitation on Issuances and Sales of Equity Interests in Wholly Owned Subsidiaries.............49
Section 4.18. Payments for Consent...........................................................................50
Section 4.19. Additional Subsidiary Guarantees...............................................................50
ARTICLE 5 SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.......................................................50
Section 5.02. Successor Corporation Substituted..............................................................51
ARTICLE 6 DEFAULTS AND REMEDIES
Section 6.01. Events of Default..............................................................................52
Section 6.02. Acceleration...................................................................................53
Section 6.03. Other Remedies.................................................................................54
Section 6.04. Waiver of Past Defaults........................................................................54
Section 6.05. Control by Majority............................................................................54
Section 6.06. Limitation on Suits............................................................................54
Section 6.07. Rights of Holders of Notes to Receive Payment..................................................55
Section 6.08. Collection Suit by Trustee.....................................................................55
Section 6.09. Trustee May File Proofs of Claim...............................................................55
Section 6.10. Priorities.....................................................................................56
Section 6.11. Undertaking for Costs..........................................................................56
ARTICLE 7 TRUSTEE
Section 7.01. Duties of Trustee..............................................................................56
Section 7.02. Rights of Trustee..............................................................................57
Section 7.03. Individual Rights of Trustee...................................................................58
Section 7.04. Trustee's Disclaimer...........................................................................58
Section 7.05. Notice of Defaults.............................................................................58
Section 7.06. Reports by Trustee to Holders of the Notes.....................................................58
Section 7.07. Compensation and Indemnity.....................................................................59
Section 7.08. Replacement of Trustee.........................................................................59
Section 7.09. Successor Trustee by Merger, etc...............................................................60
Section 7.10. Eligibility; Disqualification..................................................................60
Section 7.11. Preferential Collection of Claims Against Company..............................................60
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.......................................61
Section 8.02. Legal Defeasance and Discharge.................................................................61
Section 8.03. Covenant Defeasance............................................................................61
Section 8.04. Conditions to Legal or Covenant Defeasance.....................................................62
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions..63
Section 8.06. Repayment to Company...........................................................................63
Section 8.07. Reinstatement..................................................................................64
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes............................................................64
Section 9.02. With Consent of Holders of Notes...............................................................65
Section 9.03. Compliance with Trust Indenture Act............................................................66
Section 9.04. Revocation and Effect of Consents..............................................................66
Section 9.05. Notation on or Exchange of Notes...............................................................66
</TABLE>
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<TABLE>
<S> <C> <C>
Section 9.06. Trustee to Sign Amendments, etc................................................................67
ARTICLE 10 SUBORDINATION
Section 10.01. Agreement to Subordinate.......................................................................67
Section 10.02. Certain Definitions............................................................................67
Section 10.03. Liquidation; Dissolution; Bankruptcy...........................................................67
Section 10.04. Default on Designated Senior Debt..............................................................67
Section 10.05. Acceleration of Securities.....................................................................68
Section 10.06. When Distribution Must Be Paid Over............................................................68
Section 10.07. Notice by Company..............................................................................69
Section 10.08. Subrogation....................................................................................69
Section 10.09. Relative Rights................................................................................69
Section 10.10. Subordination May Not Be Impaired by Company...................................................69
Section 10.11. Distribution or Notice to Representative.......................................................70
Section 10.12. Rights of Trustee and Paying Agent.............................................................70
Section 10.13. Authorization to Effect Subordination..........................................................70
Section 10.14. Amendments.....................................................................................70
ARTICLE 11 NOTE GUARANTEES
Section 11.01. Guarantee......................................................................................70
Section 11.02. Subordination of Note Guarantee................................................................71
Section 11.03. Limitation on Guarantor Liability..............................................................72
Section 11.04. Execution and Delivery of Note Guarantee.......................................................72
Section 11.05. Guarantors May Consolidate, etc., on Certain Terms.............................................72
Section 11.06. Releases Following Sale of Assets..............................................................73
ARTICLE 12 MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls...................................................................73
Section 12.02. Notices........................................................................................73
Section 12.03. Communication by Holders of Notes with Other Holders of Notes..................................75
Section 12.04. Certificate and Opinion as to Conditions Precedent.............................................75
Section 12.05. Statements Required in Certificate or Opinion..................................................75
Section 12.06. Rules by Trustee and Agents....................................................................75
Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders.......................75
Section 12.08. Governing Law..................................................................................76
Section 12.09. No Adverse Interpretation of Other Agreements..................................................76
Section 12.10. Successors.....................................................................................76
Section 12.11. Severability...................................................................................76
Section 12.12. Counterpart Originals..........................................................................76
Section 12.13. Table of Contents, Headings, etc...............................................................76
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF NOTE GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
</TABLE>
v
<PAGE> 6
INDENTURE dated as of June 30, 1999 among Juno Lighting, Inc., a
Delaware corporation (the "Company"), Juno Manufacturing, Inc., an Illinois
corporation, Indy Lighting, Inc., an Indiana corporation, and Advanced
Fiberoptic Technologies, Inc., a Florida corporation (each a "Guarantor" and
collectively, the "Guarantors"), and Firstar Bank of Minnesota, N.A., as trustee
(the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the 11% Series A Senior Subordinated Notes due 2009 (the "Series A
Notes") and the 11% Series B Senior Subordinated Notes due 2009 (the
"Series B Notes" and, together with the Series A Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a global note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person
is merged with or into or became a Subsidiary of such specified Person,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Additional Notes" means up to $75 million aggregate principal amount
of Notes (other than the Initial Notes) issued under this Indenture in
accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the
Initial Notes.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" shall have correlative meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Cedel that apply to such transfer or
exchange.
"Asset Sale" means:
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(1) the sale, lease, conveyance or other disposition of any assets or
rights, (including, without limitation, by way of a sale and leaseback)
other than sales of inventory in the ordinary course of business
consistent with past practices; provided that the sale, conveyance or
other disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole will be
governed by Section 4.15 or Section 5.01 hereof and not by Section 4.10
hereof; and
(2) the issuance of Equity Interests in any of the Company's Restricted
Subsidiaries or the sale of Equity Interests in any of its
Subsidiaries.
Notwithstanding the preceding, the following items shall not be
deemed to be Asset Sales:
(1) any single transaction or series of related transactions that involves
assets having a fair market value of less than $1.5 million;
(2) a transfer of assets between or among the Company and its Wholly Owned
Subsidiaries,
(3) an issuance of Equity Interests by a Wholly Owned Subsidiary to the
Company or to another Wholly Owned Subsidiary;
(4) the conveyance, transfer, assignment or other disposition of inventory
and other property in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents; and
(6) a Restricted Payment or Permitted Investment that is permitted by
Section 4.07 hereof.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a
corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the Board of Directors of the general
partner of the partnership; and
(3) with respect to any other Person, the board or committee of such Person
serving a similar function.
"Borrowing Base" means an amount equal to the sum of (i) 85% of the
value of accounts receivable (before giving effect to any related reserves)
shown on the Company's most recent consolidated balance sheet that are not more
than 90 days past due in accordance with GAAP and (ii) 50% of the value of the
inventory shown on the Company's consolidated balance sheet in accordance with
GAAP.
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"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership
or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is
pledged in support thereof) having maturities of not more than one year
from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with maturities of
six months or less from the date of acquisition, bankers' acceptances
with maturities not exceeding six months and overnight bank deposits,
in each case, with any domestic commercial bank having capital and
surplus in excess of $500.0 million and a Thomson Bank Watch Rating of
"B" or better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having at least a P1 rating obtainable from Moody's
Investors Service, Inc. or an A1 rating obtained from Standard & Poor's
Rating Services and in each case maturing within 270 days after the
date of acquisition; and
(6) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition.
"Cedel" means Cedel Bank, SA.
"Change of Control" means the occurrence of any of the following:
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(1) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole to any
"person" (as that term is used in Section 13(d)(3) of the Exchange Act)
other than the Principal or an Affiliate of a Principal;
(2) the adoption of a plan relating to the liquidation or dissolution of
the Company;
(3) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as
defined above), other than the Principal and its Affiliates, becomes
the Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of the Company, measured by voting power rather than
number of shares; or
(4) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors.
"Company" means the issuer of the Notes, and any and all successors
thereto.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss realized by
such Person or any of its Subsidiaries in connection with an Asset
Sale, to the extent such losses were deducted in computing such
Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and its
Subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus
(3) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred
in respect of letter of credit or bankers' acceptance financings, and
net of the effect of all payments made or received pursuant to Hedging
Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses
that were paid in a prior period) and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents
an accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period)
of such Person and its Restricted Subsidiaries for such period to the
extent that such depreciation, amortization and other non-cash expenses
were deducted in computing such Consolidated Net Income;
provided that such Consolidated Net Income shall be reduced by non-cash
items increasing such Consolidated Net Income for such period, other
than the accrual of revenue in the ordinary course of business, in each
case, on a consolidated basis and determined in accordance with GAAP.
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<PAGE> 10
Notwithstanding the preceding, the provision for taxes based
on the income or profits of, and the depreciation and amortization and other
non-cash expenses of, a Subsidiary of the Company shall be added to Consolidated
Net Income to compute Consolidated Cash Flow of the Company only to the extent
that a corresponding amount would be permitted at the date of determination to
be dividended to the Company by such Subsidiary without prior governmental
approval (that has not been obtained), and without direct or indirect
restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Wholly Owned
Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be excluded to the
extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not
at the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall
be excluded;
(4) the cumulative effect of a change in accounting principles shall be
excluded; and
(5) the Net Income (but not loss) of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to the specified Person or one of
its Subsidiaries.
"Consolidated Net Worth" means, with respect to any specified Person
as of any date, the sum of:
(1) the consolidated equity of the common stockholders of such Person and
its consolidated Subsidiaries as of such date; plus
(2) the respective amounts reported on such Person's balance sheet as of
such date with respect to any series of preferred stock (other than
Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of
net earnings in respect of the year of such declaration and payment,
but only to the extent of any cash received by such Person upon
issuance of such preferred stock;
less (x) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a
going-concern business made within 12 months after the acquisition of
such business) subsequent to the date of the Indenture in the book
value of any asset owned by such Person or Restricted Subsidiary of
such Person, (y) all investments as of such date in unconsolidated
Subsidiaries and in Persons that are not Subsidiaries (except, in each
case,
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Permitted Investments), and (z) all unamortized debt discount and
expense and unamortized deferred charges as of such date, all of the
foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of the Indenture;
or
(2) was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members
of such Board at the time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 11.02 hereof or such other address as to which
the Trustee may give notice to the Company.
"Credit Agreement" means that certain Credit Agreement, to be entered
into by and among the Company and NationsBank, N.A., and Credit Suisse First
Boston Corporation, providing for two senior secured term loan facilities in an
aggregate principal amount of $90.0 million and up to $35.0 million of revolving
credit borrowings, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time.
"Credit Facilities" means, one or more debt facilities (including,
without limitation, the Credit Agreement) or commercial paper facilities, in
each case with banks or other institutional lenders providing for revolving
credit loans, term loans, capital leases, receivables financing (including
through the sale of receivables to such lenders or to special purpose entities
formed to borrow from such lenders against such receivables) or letters of
credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Senior Debt" means:
(1) any Indebtedness outstanding under the Credit Agreement; and
(2) any other Senior Debt permitted under the Indenture the principal
amount of which is $15.0 million or more and that has been designated
by the Company as "Designated Senior Debt."
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"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Company may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with Section 4.07
hereof.
"Domestic Subsidiary" means any Restricted Subsidiary that was formed
under the laws of the United States or any state thereof or the District of
Columbia or that guarantees or otherwise provides direct credit support for any
Indebtedness of the Company.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock or an increase in the stated value of
preferred stock (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the date of the Indenture, until such amounts are repaid.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of
credit or bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
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<PAGE> 13
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries, whether or not such Guarantee or Lien is called upon;
plus
(4) the product of (a) all dividends, whether paid or accrued and whether
or not in cash, on any series of preferred stock of such Person or any
of its Restricted Subsidiaries, other than dividends on Equity
Interests payable solely in Equity Interests of the Company (other than
Disqualified Stock) or to the Company or a Restricted Subsidiary of the
Company, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with
GAAP.
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
and its Restricted Subsidiaries for such period to the Fixed Charges of such
Person and its Restricted Subsidiaries for such period. In the event that the
specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified Person or any of its
Restricted Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date shall be given pro forma effect
as if they had occurred on the first day of the four-quarter reference
period and Consolidated Cash Flow for such reference period shall be
calculated on a pro forma basis in accordance with Regulation S-X under
the Securities Act, but without giving effect to clause (3) of the
proviso set forth in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, but only
to the extent that the obligations giving rise to such Fixed Charges
will not be obligations of the specified Person or any of its
Restricted Subsidiaries following the Calculation Date.
"GAAP" means 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
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<PAGE> 14
other statements by such other entity as have been approved by a significant
segment of the accounting profession, which are in effect from time to time.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means each of:
(1) the Company's Domestic Subsidiaries; and
(2) any other subsidiary that executes a Subsidiary Guarantee in accordance
with the provisions of the Indenture;
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person,
the obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements;
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates; and
(3) currency hedging arrangements designed to protect such Person against
fluctuations in currency values.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
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(5) the balance deferred and unpaid of the purchase price of any property,
except any such balance that constitutes an accrued expense or trade
payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness issued with
original issue discount; and
(2) the principal amount thereof, together with any interest thereon that
is more than 30 days past due, in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means the first $125 million aggregate principal
amount of Notes issued under this Indenture on the date hereof.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Investments" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of direct or indirect loans (including Guarantees or other
obligations), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Restricted Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the last paragraph of Section 4.07 hereof. The acquisition by the
Company or any Subsidiary of the Company of a Person that holds an Investment in
a third Person shall be deemed to be an Investment by the Company or such
Subsidiary in such third Person in an amount equal to the fair market value of
the Investment held by the acquired Person in such third Person in an amount
determined as provided in the last paragraph of Section 4.07 hereof.
"Issue Date" means the date of the first issuance of the Notes under
the Indenture.
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"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Management Agreement" means the management agreement dated as
of the Issue Date between Fremont Partners L.L.C. and the Company, as
amended from time to time.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes on such
gain or loss, realized in connection with: (a) any Asset Sale; or (b)
the disposition of any securities by such Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related provision for
taxes on such extraordinary gain or loss.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, and amounts required to
be applied to the repayment of Indebtedness, other than Senior Debt secured by a
Lien on the asset or assets that were the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (b) is
directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender;
(2) no default with respect to which (including any rights that the holders
thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time
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<PAGE> 17
or both any holder of any other Indebtedness (other than the Notes) of
the Company or any of its Restricted Subsidiaries to declare a default
on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that they will
not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Guarantee" means the Guarantee by each Guarantor of the
Company's payment obligations under this Indenture and on the Notes, executed
pursuant to the provisions of this Indenture.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes shall be treated as a
single class for all purposes under this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or
Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to DTC, shall include Euroclear and Cedel).
"Permitted Business" means any business conducted or proposed to be
conducted (as described in the offering memorandum relating to the Notes) by the
Company and its Restricted Subsidiaries on the date hereof and other businesses
reasonably related or ancillary thereto.
"Permitted Investments" means:
(1) any Investment in the Company or in a Wholly Owned Restricted
Subsidiary of the Company;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of the
Company in a Person, if as a result of such Investment:
(a) such Person becomes a Wholly Owned Restricted Subsidiary of
the Company; or
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<PAGE> 18
(b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets
to, or is liquidated into, the Company or a Wholly Owned
Restricted Subsidiary of the Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described in Section 4.10 hereof;
(5) any acquisition of assets solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company;
(6) Hedging Obligations; and
(7) other Investments in any Person having an aggregate fair market value
(measured on the date each such Investment was made and without giving
effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (7) that are at the time
outstanding not to exceed $10.0 million.
"Permitted Junior Securities" means:
(1) Equity Interests in the Company or any Guarantor; or
(2) debt securities that are subordinated to all Senior Debt and any debt
securities issued in exchange for Senior Debt to substantially the same
extent as, or to a greater extent than, the Notes and the Subsidiary
Guarantees are subordinated to Senior Debt under the Indenture.
"Permitted Liens" means:
(1) Liens of the Company and any Guarantor securing Senior Debt that was
permitted by the terms of the Indenture to be incurred;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Subsidiary
of the Company; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with
the Company or the Subsidiary;
(4) Liens on property existing at the time of acquisition thereof by the
Company or any Subsidiary of the Company, provided that such Liens were
in existence prior to the contemplation of such acquisition;
(5) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (5) of the second paragraph Section 4.09 hereof
covering only the assets acquired with such Indebtedness;
(7) Liens existing on the date of the Indenture;
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<PAGE> 19
(8) Liens for taxes, fees, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently
concluded, provided that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made
therefor;
(9) Liens incurred in the ordinary course of business of the Company or any
Subsidiary of the Company with respect to obligations that do not
exceed $10.0 million at any one time outstanding; and
(10) Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse
Debt of Unrestricted Subsidiaries.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest thereon and the amount of all expenses and premiums incurred
in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes,
such Permitted Refinancing Indebtedness has a final maturity date no
earlier than the final maturity date of, and is subordinated in right
of payment to, the Notes on terms at least as favorable to the Holders
of Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Principal" means Fremont Investors I, LLC.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Public Equity Offerings" means an underwritten public offering of
Capital Stock (other than Disqualified Stock) of the Company registered under
the Securities Act.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
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<PAGE> 20
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of June 30, 1999, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
"Representative" means the indenture trustee or other trustee, agent
or representative for any Senior Debt.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means:
(1) all Indebtedness of the Company or any Guarantor outstanding under
Credit Facilities and all Hedging Obligations with respect thereto;
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<PAGE> 21
(2) any other Indebtedness of the Company or any Guarantor permitted to be
incurred under the terms of the Indenture, unless the instrument under
which such Indebtedness is incurred expressly provides that it is on a
parity with or subordinated in right of payment to the Notes or any
Subsidiary Guarantee; and
(3) all Obligations with respect to the items listed in the preceding
clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding,
Senior Debt will not include:
(1) any liability for federal, state, local or other taxes owed or owing by
the Company;
(2) any Indebtedness of the Company to any of its Subsidiaries or other
Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in violation of the
Indenture.
"Senior Guarantees" means the Guarantees by the Guarantors of
Obligations under the Credit Agreement.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Restricted Subsidiary" means any Restricted Subsidiary
that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the date hereof.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or
more of the other Subsidiaries of that Person (or a combination
thereof); and
(2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15
U.S.C.ss.ss.77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.
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<PAGE> 22
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note
substantially in the form of Exhibit A attached hereto that bears the Global
Note Legend and that has the "Schedule of Exchanges of Interests in the Global
Note" attached thereto, and that is deposited with or on behalf of and
registered in the name of the Depositary, representing a series of Notes that do
not bear the Private Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or understanding
with the Company or any Restricted Subsidiary of the Company unless the
terms of any such agreement, contract, arrangement or understanding are
no less favorable to the Company or such Restricted Subsidiary than
those that might be obtained at the time from Persons who are not
Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or
preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Company or any of the Restricted
Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary of the Company as of
such date and, if such Indebtedness is not permitted to be incurred as of such
date under Section 4.09 hereof, the Company shall be in default of such
covenant. The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (1) such Indebtedness
is permitted under Section 4.09 hereof, calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-quarter reference
period; and (2) no Default or Event of Default would be in existence following
such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
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"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment; by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
---- -------
<S> <C>
"Affiliate Transaction"............................................................ 4.11
"Asset Sale Offer"................................................................. 3.09
"Authentication Order"............................................................. 2.02
"Bankruptcy Law"................................................................... 4.01
"Change of Control Offer".......................................................... 4.15
"Change of Control Payment"........................................................ 4.15
"Change of Control Payment Date"................................................... 4.15
"Covenant Defeasance".............................................................. 8.03
"Event of Default"................................................................. 6.01
"Excess Proceeds".................................................................. 4.10
"incur"............................................................................ 4.09
"Legal Defeasance"................................................................. 8.02
"Offer Amount"..................................................................... 3.09
"Offer Period"..................................................................... 3.09
"Paying Agent"..................................................................... 2.03
"Permitted Debt"................................................................... 4.09
"Purchase Date".................................................................... 3.09
"Registrar"........................................................................ 2.03
"Restricted Payments".............................................................. 4.07
"Unit Legend"...................................................................... 2.06
</TABLE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
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<PAGE> 24
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Note Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Note Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular;
(e) provisions apply to successive events and transactions; and
(f) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. Notes issued in global form shall be substantially
in the form of Exhibit A attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests
19
<PAGE> 25
in the Global Note" attached thereto). Notes issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without the Global
Note Legend thereon and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
(c) Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Cedel Bank.
Section 2.02. Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes and may
be in facsimile form.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers (an "Authentication Order"), authenticate Notes for original issue up
to the aggregate principal amount stated in paragraph 4 of the Notes. The
aggregate principal amount of Notes outstanding at any time may not exceed such
amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
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<PAGE> 26
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Notes, and will notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee. Upon the occurrence of either of
the preceding events in (i) or (ii) above, Definitive Notes shall be issued in
such names as the Depositary shall instruct the Trustee. Global Notes also may
be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
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<PAGE> 27
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Regulation S Global Note may not be made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Beneficial interests in any Unrestricted Global Note
may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above, the
transferor of such beneficial interest must deliver to the Registrar
either (A) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase or (B)
(1) a written order from a Participant or an Indirect Participant given to
the Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to
the beneficial interest to be transferred or exchanged and (2)
instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall
be registered to effect the transfer or exchange referred to in (1) above.
Upon consummation of an Exchange Offer by the Company in accordance with
Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall
be deemed to have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered by the
Holder of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the
Notes or otherwise applicable under the Securities Act, the Trustee shall
adjust the principal amount of the relevant Global Note(s) pursuant to
Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
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(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications and certificates and Opinion of Counsel required by
item (3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the Unrestricted Global
Note. A beneficial interest in any Restricted Global Note may be exchanged
by any holder thereof for a beneficial interest in an Unrestricted Global
Note or transferred to a Person who takes delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1)
a Broker-Dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one
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or more Unrestricted Global Notes in an aggregate principal amount equal
to the aggregate principal amount of beneficial interests transferred
pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the
form of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Restricted Definitive
Note, then, upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the certifications
in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(b) thereof;
or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the Securities Act,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c) shall be registered in such name or names
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and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from
the Depositary and the Participant or Indirect Participant. The Trustee
shall deliver such Definitive Notes to the Persons in whose names such
Notes are so registered. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section
2.06(c)(i) shall bear the Private Placement Legend and shall be subject to
all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial interest
for a Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall
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execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iii) shall be registered in such
name or names and in such authorized denomination or denominations as the
holder of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect
Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note
issued in exchange for a beneficial interest pursuant to this Section
2.06(c)(iii) shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred
to a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred
to a Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred
to an Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the effect
set forth in Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred
to the Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities Act,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted Global
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[MORE TO COME]
Note, in the case of clause (B) above, the 144A Global Note, in the case
of clause (C) above, the Regulation S Global Note, and in all other cases,
the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes
to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes
to transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item
(4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs
in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes
and increase or cause to be increased the aggregate principal amount of
the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note at any time. Upon receipt of a request for such an exchange or
transfer, the Trustee shall cancel the applicable Unrestricted Definitive
Note and increase or cause to be increased the aggregate principal amount
of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D)
or (iii) above at a time when an Unrestricted Global Note
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has not yet been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee
shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of Definitive Notes so
transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes.
Any Restricted Definitive Note may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (2)
thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
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(1) if the Holder of such Restricted Definitive
Notes proposes to exchange such Notes for an Unrestricted
Definitive Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(d)
thereof; or
(2) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant to
the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THE NOTE (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND THE NOTE EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
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NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER
OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH
NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I)(A) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT), PURCHASING FOR ITS OWN ACCOUNT IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (B)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (D) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT PROVIDED THAT IN THE CASE OF A TRANSFER PURSUANT TO CLAUSE (D)
SUCH TRANSFER IS EFFECTED BY THE DELIVERY TO THE TRANSFEREE OF DEFINITIVE
SECURITIES REGISTERED IN ITS NAME (OR ITS NOMINEES NAME) IN THE BOOKS MAINTAINED
BY THE REGISTRAR, AND IS SUBJECT TO THE RECEIPT BY THE REGISTRAR (AND THE
ISSUER, IF THEY SO REQUEST) OF A CERTIFICATION OF THE TRANSFEROR AND AN OPINION
OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT, (II) TO THE ISSUER OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section
2.06 (and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time
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prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note or for Definitive Notes,
the principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note shall be increased accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note
for any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05
hereof.
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes surrendered upon such registration of transfer
or exchange.
(v) The Company shall not be required (A) to issue, to register
the transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business
on the day of selection, (B) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part or (C) to register
the transfer of or to exchange a Note between a record date and the next
succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem and
treat the Person in whose name any Note is registered as the absolute
owner of such Note for the purpose of receiving payment of principal of
and interest on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02 hereof.
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(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, the Company shall issue and the Trustee, upon receipt of
an Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
Section 2.10. Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Company
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considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits
of this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 35 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee shall select the Notes to be redeemed
or purchased among the Holders of the Notes in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
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The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company shall mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
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Section 3.05. Deposit of Redemption Price.
On or prior to the redemption date, the Company shall deposit with
the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in clause (b) of this Section 3.07, the
Company shall not have the option to redeem the Notes pursuant to this Section
3.07 prior to July 1, 2004. Thereafter, the Company shall have the option to
redeem the Notes, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest, if any, thereon, to
the applicable redemption date, if redeemed during the twelve-month period
beginning on July 1 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004........................................................................... 105.9375%
2005........................................................................... 103.9583%
2006........................................................................... 101.9792%
2007 and thereafter............................................................ 100.0000%
</TABLE>
(b) Notwithstanding the provisions of clause (a) of this Section
3.07, at any time prior to July 1, 2002, the Company may on one or more
occasions redeem up to 35% of the aggregate principal amount of Notes issued
under the Indenture at a redemption price of 111.875% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the redemption date, with
the net cash proceeds of one or more Public Equity Offerings; provided that:
(1) at least 65% in aggregate principal amount of Notes
(including any Additional Notes) issued under the
Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the
Company and its Subsidiaries); and
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(2) the redemption occurs within 90 days of the date of the
closing of such Public Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemption.
The Company shall not be required to make mandatory redemption
payments or sinking fund payments with respect to the Notes.
Section 3.09. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an offer to all Holders to purchase Notes (an "Asset
Sale Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall
remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer shall cease to
accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
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(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon written request from the Company shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due.
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Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.
Section 4.03. Reports.
Whether or not required by the Commission, so long as any Notes are
outstanding, the Company shall furnish to the Holders of Notes, within the time
periods specified in the Commission's rules and regulations:
(1) all quarterly and annual financial information that would be required
to be contained in a filing with the Commission on Forms 10-Q and 10-K
if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information
only, a report on the annual financial statements by the Company's
certified independent accountants; and
(2) all current reports that would be required to be filed with the
Commission on Form 8-K if the Company were required to file such
reports.
If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph shall include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
In addition, following the consummation of the exchange offer
contemplated by the Registration Rights Agreement, to the extent required by the
Commission, the Company shall file a copy of all of the information and reports
referred to in clauses (1) and (2) above with the Commission for public
availability within the time periods specified in the Commission's rules and
regulations (unless the Commission will not accept such a filing), and the
Company shall make such information available to securities analysts and
prospective investors within 10 days of their request. In addition, the Company
and the Subsidiary Guarantors have agreed that, for so long as any Notes remain
outstanding, they will
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furnish to the Holders and to securities analysts and prospective investors,
within 10 days of their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
Section 4.04. Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor
is so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation, including the Company's current
independent accountants or any successor thereto) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, within 30 days of any Officer becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.05. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company and each of the Guarantors (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of
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any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.
Section 4.07. Restricted Payments.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution
on account of the Company's or any of its Restricted Subsidiaries'
Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving the Company or
any of its Restricted Subsidiaries) or to the direct or indirect
holders of the Company's or any of its Restricted Subsidiaries' Equity
Interests in their capacity as such (other than dividends or
distributions payable in Equity Interests (other than Disqualified
Stock) of the Company or payable to the Company or a Restricted
Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any
direct or indirect parent of the Company (other than any such Equity
Interests owned by the Company or any Restricted Subsidiary of the
Company);
(3) make any payment on or with respect to, or repurchase, redeem, defease
or otherwise acquire or retire for value any Indebtedness that is
subordinated in right of payment to the Notes or the Subsidiary
Guarantees, except a payment of interest or principal at the Stated
Maturity thereof; or
(4) make any Restricted Investment (all such payments and other actions set
forth in clauses (1) through (4) above being collectively referred to
as "Restricted Payments"),
unless, at the time of and immediately after giving effect to such Restricted
Payment:
(1) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof; and
(2) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in Section 4.09
hereof; and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of the Indenture (excluding Restricted
Payments permitted by clauses (2), (3) and (4) of the next succeeding
paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of
the first fiscal quarter commencing after the date of the
Indenture to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less
100% of such deficit), plus
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(b) 100% of the aggregate net cash proceeds received by the
Company after the date of the Indenture as a contribution to
its common equity capital or from the issue or sale of Equity
Interests of the Company (other than Disqualified Stock) or
from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt
securities of the Company that have been converted into or
exchanged for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to a
Subsidiary of the Company), plus
(c) 50% of any cash dividends or other cash distributions received
by the Company or a Restricted Subsidiary after the Issue Date
from an Unrestricted Subsidiary, plus
(d) to the extent that any Restricted Investment that was made
after the date of the Indenture is sold for cash or Cash
Equivalents or otherwise liquidated or repaid for cash or Cash
Equivalents, the lesser of (i) the cash return of capital with
respect to such Restricted Investment (less the cost of
disposition, if any) and (ii) the initial amount of such
Restricted Investment, plus.
(e) $10 million.
So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions shall not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would
have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition
of any subordinated Indebtedness of the Company or any Guarantor or of
any Equity Interests of the Company in exchange for, or out of the net
cash proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of, Equity Interests of the Company (other
than Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from
clause (3) (b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company or any Guarantor with the net
cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of the Company
to the holders of its common Equity Interests on a pro rata basis;
(5) the repurchase, redemption, cancellation or other acquisition or
retirement for value of any Equity Interests of the Company or any
Restricted Subsidiary of the Company held by any member of the
Company's (or any of its Restricted Subsidiaries') management,
employees or directors pursuant to (i) any management, employee or
director equity subscription agreement or stock option agreement or
(ii) upon the death, disability or termination of employment of such
members of management, employees or directors; provided that the
aggregate price paid for all such purchased, redeemed, acquired or
retired Equity Interests shall not exceed $1,000,000 in any
twelve-month period; and
(6) other Restricted Payments in an aggregate amount not to exceed $5.0
million since the date of the Indenture.
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The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this covenant shall be determined by the Board of Directors whose resolution
with respect thereto shall be delivered to the Trustee. The Board of Directors'
determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $5.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
the Indenture.
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock to
the Company or any of its Restricted Subsidiaries, or with respect to
any other interest or participation in, or measured by, its profits, or
pay any indebtedness owed to the Company or any of its Restricted
Subsidiaries;
(2) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the date of the Indenture and any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are not materially
more restrictive, taken as a whole, with respect to such dividend and
other payment restrictions than those contained in such Existing
Indebtedness, as in effect on the date of the Indenture;
(2) the Indenture, the Notes and the Subsidiary Guarantees;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of
such acquisition), which encumbrance or restriction is not applicable
to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired,
provided that, in the case of Indebtedness, such Indebtedness was
permitted by the terms of the Indenture to be incurred;
(5) customary non-assignment provisions in leases, licenses and similar
agreements entered into in the ordinary course of business and
consistent with past practices;
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(6) purchase money obligations for property acquired in the ordinary course
of business that impose restrictions on the property so acquired of the
nature described in clause (3) of the preceding paragraph;
(7) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary
pending its sale or other disposition;
(8) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are not materially more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness being
refinanced;
(9) Liens securing Indebtedness that limit the right of the Company or any
of its Restricted Subsidiaries to dispose of the assets subject to such
Lien;
(10) provisions with respect to the disposition or distribution of assets or
property in joint venture agreements, assets sale agreements, stock
sale agreements and other similar agreements entered into in the
ordinary course of business; and
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt), and the Company will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that the Company may
incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and
the Guarantors may incur Indebtedness (including Acquired Debt) or issue
preferred stock, if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or preferred stock is issued
or incurred would have been at least 2.0 to 1, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or the preferred stock or Disqualified
Stock had been issued, as the case may be, at the beginning of such four-quarter
period.
The first paragraph of this Section 4.09 will not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(1) the incurrence by the Company and any Guarantor of additional term
Indebtedness under Credit Facilities in an aggregate principal amount
at any one time outstanding under this clause (1) not to exceed $90.0
million less the aggregate amount of all repayments, optional or
mandatory, of the principal of any term Indebtedness under Credit
Facilities (other than repayments that are concurrently reborrowed)
that have actually been made since the date of the Indenture;
(2) the incurrence by the Company and any Guarantor of additional revolving
credit Indebtedness and letters of credit under Credit Facilities in an
aggregate principal amount at any one time outstanding under this
clause (2) (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and its
Restricted Subsidiaries thereunder) not to exceed the greater of (a)
$35.0 million less the aggregate amount of all Net
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Proceeds of Asset Sales applied by the Company or any of its Restricted
Subsidiaries to repay any revolving credit Indebtedness under Credit
Facilities and effect a corresponding commitment reduction thereunder
pursuant to Section 4.10 hereof or (b) the Borrowing Base;
(3) the incurrence by the Company or its Restricted Subsidiaries of the
Existing Indebtedness;
(4) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes (other than the Additional Notes) and the
related Subsidiary Guarantees to be issued on the date of the Indenture
and the Exchange Notes and the related Subsidiary Guarantees to be
issued pursuant to the Registration Rights Agreement;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage
financings or repurchase money obligations, in each case, incurred for
the purpose of financing all or any part of the repurchase price or
cost of construction or improvement of property, plant or equipment
used in the business of the Company or such Restricted Subsidiary, in
an aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (5), not to exceed $10.0 million at
any time outstanding;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to refund, refinance or replace Indebtedness (other
than intercompany Indebtedness) that was permitted by the Indenture to
be incurred under the first paragraph of this covenant or clauses (3),
(4), (5), (6), (11) or (12) of this paragraph;
(7) the incurrence by the Company or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the Company and any of its
Wholly Owned Restricted Subsidiaries or between or among any Wholly
Owned Restricted Subsidiaries; provided, however, that:
(a) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated
to the prior payment in full in cash of all Obligations with
respect to the Notes, in the case of the Company, or the
Subsidiary Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person
other than the Company or a Restricted Subsidiary thereof and
(ii) any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Wholly Owned
Restricted Subsidiary thereof; shall be deemed, in each case,
to constitute an incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may be,
that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or
hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding;
(9) the guarantee by the Company or any of the Guarantors of Indebtedness
of the Company or a Restricted Subsidiary of the Company that was
permitted to be incurred by another provision of this covenant;
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(10) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form
of additional Indebtedness with the same terms, and the payment of
dividends on Disqualified Stock in the form of additional shares of the
same class of Disqualified Stock will not be deemed to be an incurrence
of Indebtedness or an issuance of Disqualified Stock for purposes of
this covenant; provided, in each such case, that the amount thereof is
included in Fixed Charges of the Company as accrued;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (11), not to exceed $30.0
million; and
(12) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such
event shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company that was not permitted by this
clause (12).
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (12) above,
or is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Company will be permitted to classify such item of Indebtedness on the
date of its incurrence, or later reclassify all or a portion of such item of
Indebtedness, in any manner that complies with this Section 4.09. Indebtedness
under Credit Facilities outstanding on the date on which Notes are first issued
and authenticated under the Indenture shall be deemed to have been incurred on
such date in reliance on the exception provided by clauses (1) and (2) of the
definition of Permitted Debt.
Section 4.10. Asset Sales.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(2) such fair market value is determined by the Company's Board of
Directors and evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee; and
(3) at least 75% of the consideration therefor received by the Company or
such Restricted Subsidiary is in the form of cash or Cash Equivalents.
For purposes of this provision, each of the following shall be deemed
to be cash:
(a) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet), of the Company or any
Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes
or any Subsidiary Guarantee) that are assumed by the
transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted
Subsidiary from further liability; and
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(b) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee
that are contemporaneously (subject to ordinary settlement
periods) converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received in
that conversion).
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or any of its Restricted Subsidiaries may apply such Net
Proceeds at its option:
(1) to repay Senior Debt and, if the Senior Debt repaid is revolving credit
Indebtedness, to correspondingly reduce commitments with respect
thereto;
(2) to acquire all or substantially all of the assets of, or a majority of
the Voting Stock of, another Permitted Business;
(3) to make capital expenditures; and/or
(4) to acquire other long-term assets that are used or useful in a
Permitted Business.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph shall be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $5.0 million,
the Company shall make an Asset Sale Offer to all Holders of Notes and all
holders of other Indebtedness that is pari passu with the Notes (including any
Additional Notes) containing provisions similar to those set forth in the
Indenture with respect to offers to repurchase or redeem with the proceeds of
sales of assets to repurchase the maximum principal amount of Notes (including
any Additional Notes) and such other pari passu Indebtedness that may be
repurchased out of the Excess Proceeds. The offer price in any Asset Sale Offer
shall be equal to 100% of principal amount plus accrued and unpaid interest, if
any, to the date of repurchase, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
such Excess Proceeds for any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount of Notes (including any Additional Notes) and
such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds
the amount of Excess Proceeds, the Trustee shall select the Notes (including any
Additional Notes) and such other pari passu Indebtedness to be repurchased on a
pro rata basis based on the principal amount of Notes and such other pari passu
Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of the Indenture, the Company shall comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of the Indenture by virtue of such
conflict.
The agreements governing the Company's and the Guarantors' outstanding
Senior Debt currently prohibit the Company from purchasing any Notes, and also
provide that certain change of control or asset sale events with respect to the
Company would constitute a default under these agreements. Any future credit
agreements or other agreements relating to Senior Debt to which the Company
becomes a party
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may contain similar restrictions and provisions. In the event a Change of
Control or Asset Sale occurs at a time when the Company is prohibited from
purchasing Notes, the Company could seek the consent of its senior lenders to
the repurchase of Notes or could attempt to refinance the borrowings that
contain such prohibition. If the Company does not obtain such a consent or repay
such borrowings, the Company will remain prohibited from purchasing Notes. In
such case, the Company's failure to repurchase tendered Notes would constitute
an Event of Default under the Indenture which would, in turn, constitute a
default under such Senior Debt. In such circumstances, the subordination
provisions in the Indenture would likely restrict payments to the Holders of
Notes.
Section 4.11. Transactions with Affiliates.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate
consideration in excess of $1.0 million, a resolution of
the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction or
series of Affiliate Transactions complies with this
covenant and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the
Board of Directors; and
(b) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate
consideration in excess of $5.0 million, an opinion as to
the fairness to the Holders of such Affiliate Transaction
from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing.
The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior paragraph:
(1) any employment agreement entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Restricted
Subsidiary;
(2) transactions between or among the Company and/or its Restricted
Subsidiaries;
(3) payment of reasonable directors fees to Persons who are not otherwise
Affiliates of the Company;
(4) sales of Equity Interests (other than Disqualified Stock) to Affiliates
of the Company;
(5) so long as no Default or Event of Default has occurred and is
continuing, the payment of fees and reimbursements owed pursuant to the
Management Agreement and transaction fees and related expenses to the
Principal or its Affiliates consistent with past practices, including,
without
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limitation, in connection with acquisitions, divestitures, investments
or financings by the Company or any of its Restricted Subsidiaries;
provided that the amount of fees payable under the Management Agreement
will not exceed $325,000 during any 12 month period, which amount may
be reasonably increased to reflect a material increase in the size of
the Company as a result of an acquisition;
(6) Restricted Payments that are permitted by the provisions of Section
4.07 hereof; and
(7) maintenance in the ordinary course of business of benefit programs or
loan arrangements for employees, officers or directors of the Company
or any Restricted Subsidiary, including vacation plans, health and life
insurance plans, deferred compensation plans and retirement or savings
plans and similar plans.
Section 4.12. Liens.
The Company shall not, and shall not permit any of its Subsidiaries to,
create, incur, assume or otherwise cause or suffer to exist or become effective
any Lien of any kind (other than Permitted Liens) upon any of their property or
assets, now owned or hereafter acquired, unless all payments due under the
Indenture and the Notes are secured on an equal and ratable basis with the
obligations so secured until such time as such obligations are no longer secured
by a Lien.
Section 4.13. Line of Business.
The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any business other than Permitted Businesses, except to such
extent as would not be material to the Company and its Restricted Subsidiaries
taken as a whole.
Section 4.14. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things reasonably necessary to preserve and keep in full force and effect
(i) its corporate or other existence, and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Subsidiary and (ii) the rights (charter and statutory),
licenses and franchises of the Company and its Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of its
Subsidiaries, if the Board of Directors shall determine that the preservation
thereof is no longer reasonably necessary or desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders of the Notes.
Section 4.15. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall
make an offer (a "Change of Control Offer") to each Holder to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of such Holder's
Notes at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest thereon, if any, to the date of
purchase (the "Change of Control Payment"). Within 30 days following any Change
of Control, the Company shall mail a notice to each Holder stating: (1) that the
Change of Control Offer is being made pursuant to this Section 4.15 and that all
Notes tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be no earlier than 30 and no later than 60 days from
the date such notice is mailed (the "Change of Control Payment Date"); (3) that
any Note not tendered will continue to accrue interest; (4) that, unless
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the Company defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date; (5) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (6) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not later
than the close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (7) that Holders whose Notes are being purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes in
connection with a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered payment in an amount equal to the Change of Control Payment for such
Notes, and the Trustee shall promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Note equal in principal amount
to any unpurchased portion of the Notes surrendered by such Holder, if any;
provided, that each such new Note shall be in a principal amount of $1,000 or an
integral multiple thereof. The Company shall publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.15 and all other provisions of this Indenture applicable to a
Change of Control Offer made by the Company and purchases all Notes validly
tendered and not withdrawn under such Change of Control Offer.
Section 4.16. No Senior Subordinated Debt.
The Company shall not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to Indebtedness of the Company and senior in any respect in
right of payment to the Notes. No Guarantor shall incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to any Indebtedness of such Guarantor and senior in
any respect in right of payment to such Guarantor's Subsidiary Guarantee.
Section 4.17. Limitation on Issuances and Sales of Equity Interests in
Wholly Owned Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any
Equity Interests in any Wholly Owned Restricted
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Subsidiary of the Company to any Person (other than the Company or a Wholly
Owned Restricted Subsidiary of the Company), unless:
(1) such transfer, conveyance, sale, lease or other disposition is of all
the Equity Interests in such Wholly Owned Restricted Subsidiary; and
(2) the cash Net Proceeds from such transfer, conveyance, sale, lease or
other disposition are applied in accordance with Section 4.10 hereof.
In addition, the Company shall not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any of its Equity Interests (other than, if
necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person other than to the Company or a Wholly Owned Restricted
Subsidiary of the Company.
Section 4.18. Payments for Consent.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of the Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.19. Additional Subsidiary Guarantees.
If the Company or any of its Subsidiaries acquires or creates another
Domestic Subsidiary after the date of the Indenture, then that newly acquired or
created Domestic Subsidiary must become a Guarantor and execute a supplemental
indenture and deliver an Opinion of Counsel to the Trustee within 10 Business
Days of the date on which it was acquired or created; provided that a Domestic
Subsidiary with assets with a fair market value of less than $1,000 shall not be
required to become a Subsidiary Guarantor and execute such a supplemental
indenture until such time as it shall have assets with a fair market value of at
least $1,000. This requirement shall not apply to any Subsidiaries that have
properly been designated as Unrestricted Subsidiaries in accordance with the
Indenture for so long as they continue to constitute Unrestricted Subsidiaries.
If any Subsidiary that is not a Guarantor at any time Guarantees Indebtedness of
the Company or a Guarantor, the Company shall cause such Subsidiary to
simultaneously execute and deliver a supplemental Indenture providing for the
Guarantee of the payment of the Notes by such Subsidiary.
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company shall not, directly or indirectly: (1) consolidate or
merge with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person; unless:
(1) either: (a) the Company is the surviving corporation; or (b) the
Person formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale, assignment,
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transfer, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger (if
other than the Company) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes
all the obligations of the Company under the Notes, the Indenture and
the Registration Rights Agreement pursuant to a supplemental indenture
reasonably satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of Default
exists; and
(4) the Company or the Person formed by or surviving any such consolidation
or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been
made:
(a) will have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the
transaction; and
(b) will, on the date of such transaction after giving pro
forma effect thereto and any related financing
transactions as if the same had occurred at the beginning
of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.09 hereof.
In addition, the Company shall not, directly or indirectly, lease all
or substantially all of its properties or assets, in one or more related
transactions, to any other Person. The provisions of this Section 5.01 shall not
apply to a sale, assignment, transfer, conveyance or other disposition of assets
between or among the Company and any of its Wholly Owned Restricted
Subsidiaries.
Upon the occurrence of any transaction described above in which the
Company is not the continuing corporation, the successor corporation formed by
such a consolidation or into which the Company is merged or to which such
transfer is made will succeed to, and be substituted for, and may exercise every
right and power of, the Company under the Indenture and the Notes with the same
effect as if such successor corporation had been named as the Company therein.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
or other entity formed by such consolidation or into or with which the Company
is merged or to which such sale, assignment, transfer, lease, conveyance or
other disposition is made shall succeed to, and be substituted for (so that from
and after the date of such consolidation, merger, sale, lease, conveyance or
other disposition, the provisions of this Indenture referring to the "Company"
shall refer instead to the successor corporation and not to the Company), and
may exercise every right and power of the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company's assets that meets the requirements of Section
5.01 hereof.
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ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on the
Notes and such default continues for a period of 30 days, whether or not
prohibited by the subordination provisions of the Indenture;
(b) the Company defaults in the payment when due of principal of, or
premium, if any, on the Notes when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise, whether or not prohibited by the subordination provisions of the
Indenture;
(c) the Company fails to comply with any of the provisions of
Sections 4.10, 4.15, or 5.01 hereof;
(d) the Company fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture or the Notes for
60 days after notice to the Company by the Trustee or the Holders of at least
25% in aggregate principal amount of the Notes (including Additional Notes, if
any) then outstanding voting as a single class;
(e) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or
is created after the date of this Indenture, which default:
(i) is caused by a failure to pay principal of, or
interest or premium, if any, on any such Indebtedness
prior to the expiration of the grace period provided
in such Indebtedness on the date of such default (a
"Payment Default"); or
(ii) results in the acceleration of such Indebtedness
prior to its express maturity,
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$7.5 million or more;
(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any of its Restricted Subsidiaries and such judgment or judgments remain
undischarged for a period (during which execution shall not be effectively
stayed) of 60 days, provided that the aggregate of all such undischarged
judgments exceeds $7.5 million;
(g) the Company or any of its Significant Restricted Subsidiaries
pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
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(iii) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due; or
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Restricted Subsidiaries in an involuntary case;
(ii) appoints a custodian of the Company or any of its
Significant Restricted Subsidiaries or for all or substantially all of the
property of the Company or any of its Significant Restricted Subsidiaries;
or
(iii) orders the liquidation of the Company or any of its
Significant Restricted Subsidiaries;
and the order or decree remains unstayed and in effect for 60 consecutive days;
or
(i) except as permitted by this Indenture, any Guarantee is held in
any judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or any Guarantor, or any Person acting on
behalf of any Guarantor, shall in writing deny or disaffirm its obligations
under such Guarantor's Guarantee.
Section 6.02. Acceleration.
If any Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.01 hereof with respect to the Company, any
Significant Restricted Subsidiary or any group of Significant Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Restricted
Subsidiary) occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the then outstanding Notes (including Additional Notes,
if any) may declare all the Notes to be due and payable immediately. Upon any
such declaration, the Notes shall become due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (g) or
(h) of Section 6.01 hereof occurs with respect to the Company or any of its
Significant Restricted Subsidiaries, all outstanding Notes shall be due and
payable immediately without further action or notice. The Holders of a majority
in aggregate principal amount of the then-outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium that has become due solely because of the acceleration) have been
cured or waived.
If an Event of Default occurs on or after July 1, 2004 by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding payment of the premium that the Company
would have had to pay if the Company then had elected to redeem the Notes
pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding. If an Event of Default occurs prior to July 1, 2004 by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of the Company
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<PAGE> 59
with the intention of avoiding the prohibition on redemption of the Notes prior
to such date, then, upon acceleration of the Notes, an additional premium shall
also become and be immediately due and payable in an amount, for each of the
years beginning on July 1 of the years set forth below, as set forth below
(expressed as a percentage of the principal amount of the Notes on the date of
payment that would otherwise be due but for the provisions of this sentence):
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
1999.......................................................................... 115.8333%
2000.......................................................................... 113.8542%
2001.......................................................................... 111.8750%
2002.......................................................................... 109.8958%
2003.......................................................................... 107.9167%
</TABLE>
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on, the Notes
(including in connection with an offer to purchase) (provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding
Notes (including Additional Notes, if any) may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then-outstanding
Notes (including Additional Notes, if any) may direct the time, method and place
of conducting any proceeding for exercising any remedy available to the Trustee
or exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that the Trustee reasonably believes conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of other Holders of Notes or that may involve the Trustee in
personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
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(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium, if any, and
interest on the Note, on or after the respective due dates expressed in the Note
(including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in
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liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for
amounts due under Section 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made, by
the Trustee and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on
the Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium, if any and interest,
respectively; and
Third: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only those
duties that are specifically set forth in this Indenture
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and no others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
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(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium, if
any, or interest on any Note, the Trustee may withhold the notice if and so long
as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA ss. 313(a) (but if no event described in
TIA ss. 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA ss. 313(d). The
Company shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
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Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
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(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
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ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article Eight.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
deemed to have been discharged from their respective obligations with respect to
all outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of outstanding Notes to receive solely from the trust fund described
in Section 8.04 hereof, and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, and interest on such Notes when
such payments are due, (b) the Company's obligations with respect to such Notes
under Article 2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and the Company's obligations in
connection therewith and (d) this Article Eight. Subject to compliance with this
Article Eight, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19 hereof and clause (iv) of Section
5.01 hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(c) through 6.01(f) and 6.01(i) hereof shall not constitute Events of
Default.
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Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit or cause to be deposited
with the Trustee, in trust, for the benefit of the Holders, cash in United
States dollars, non-callable Government Securities, or a combination thereof, in
such amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium, if
any, and interest on the outstanding Notes on the stated date for payment
thereof or on the applicable redemption date, as the case may be, and the
Company must specify whether the Notes are being defeased to maturity or to a
particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Notes pursuant to this Article Eight
concurrently with such incurrence) or insofar as Sections 6.01(g) or 6.01(h)
hereof is concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to customary exceptions) to the effect that,
assuming no intervening bankruptcy of the Company or any Guarantor between the
date of deposit and the 91st day following the deposit and assuming that no
Holder is an "insider" of the Company under applicable bankruptcy law, after the
91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
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(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities held by
it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
Section 8.06. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in The New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
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Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Note
Guarantees or the Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 hereof (including the
related definitions) in a manner that does not materially adversely affect any
Holder;
(c) to provide for the assumption of the Company's or a Guarantor's
obligations to the Holders of the Notes by a successor to the Company pursuant
to Article 5 or Article 10 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture as of the date hereof; or
(g) to allow any Guarantor to execute a supplemental indenture and/or
a Note Guarantee with respect to the Notes.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
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Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including Sections 3.09, 4.10
and 4.15 hereof), the Note Guarantees and the Notes with the consent of the
Holders of at least a majority in principal amount of the Notes (including
Additional Notes, if any) then outstanding voting as a single class (including
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any
existing Default or Event of Default (other than a Default or Event of Default
in the payment of the principal of, premium, if any, or interest on the Notes,
except a payment default resulting from an acceleration that has been rescinded)
or compliance with any provision of this Indenture, the Note Guarantees or the
Notes may be waived with the consent of the Holders of a majority in principal
amount of the then-outstanding Notes (including Additional Notes, if any) voting
as a single class (including consents obtained in connection with a tender offer
or exchange offer for, or purchase of, the Notes). Without the consent of at
least 75% in principal amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, such Notes), no waiver or amendment to this Indenture may make any change in
the provisions of Article 10 hereof. Section 2.08 hereof shall determine which
Notes are considered to be "outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes (including Additional Notes,
if any) then outstanding voting as a single class may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of the
Notes at the option of the Company, except as provided above with respect to
Sections 4.10 and 4.15 hereof;
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(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the then-outstanding Notes (including Additional Notes, if
any) and a waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or Events of Default the rights of Holders of Notes to
receive payments of principal of, or interest or premium, if any, on the Notes;
(g) waive a redemption payment with respect to any Note, except as
provided above with respect to Sections 4.10 and 4.15 hereof;
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions; or
(i) release any Guarantor from any of its obligations under its Note
Guarantee or this Indenture, except in accordance with the terms of this
Indenture.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
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Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01 hereof)
shall be fully protected in relying upon, in addition to the documents required
by Section 11.04 hereof, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to Subordinate.
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes is subordinated in right of payment, to
the extent and in the manner provided in this Article 10, to the prior payment
in full of all Senior Debt (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Debt.
Section 10.02. Certain Definitions.
A distribution may consist of cash, securities or other property, by
set-off or otherwise.
Section 10.03. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities:
(i) holders of Senior Debt shall be entitled to receive payment
in full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Debt) before Holders of the Notes shall
be entitled to receive any payment with respect to the Notes (except that
Holders may receive (A) Permitted Junior Securities and (B) payments and
other distributions made from any defeasance trust created pursuant to
Section 8.01 hereof); and
(ii) until all Obligations with respect to Senior Debt (as
provided in clause (i) above) are paid in full, any distribution to which
Holders would be entitled but for this Article 10 shall be made to holders
of Senior Debt (except that Holders of Notes may receive (A) Permitted
Junior Securities and (B) payments and other distributions made from any
defeasance trust created pursuant to Section 8.01 hereof), as their
interests may appear.
Section 10.04. Default on Designated Senior Debt.
(a) The Company may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Notes and
may not acquire from the Trustee or any Holder any
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Notes for cash or property (other than (A) Permitted Junior Securities and (B)
payments and other distributions made from any defeasance trust created pursuant
to Section 8.01 hereof) until all principal and other Obligations with respect
to the Senior Debt have been paid in full if:
(i) a default in the payment of any principal or other
Obligations with respect to Designated Senior Debt occurs and is
continuing beyond any applicable grace period in the agreement, indenture
or other document governing such Designated Senior Debt; or
(ii) a default, other than a payment default, on Designated
Senior Debt occurs and is continuing that then permits holders of the
Designated Senior Debt to accelerate its maturity and the Trustee receives
a notice of the default (a "Payment Blockage Notice") from a Person who
may give it pursuant to Section 10.12 hereof. If the Trustee receives any
such Payment Blockage Notice, no subsequent Payment Blockage Notice shall
be effective for purposes of this Section unless and until (A) at least
360 days shall have elapsed since the effectiveness of the immediately
prior Payment Blockage Notice and (B) all scheduled payments of principal,
interest and premium, if any, and interest on the Notes that have come due
have been paid in full in cash. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
(b) The Company may and shall resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(i) in the case of a payment default, the date upon which the
default is cured or waived, or
(ii) in the case of a default referred to in clause (ii) of
Section 10.04(a) hereof, the earlier of the date on which such default is
cured or waived or 179 days after the date on which the applicable Payment
Blockage Notice is received, unless the maturity of any Designated Senior
Debt has been accelerated and such acceleration has not been rescinded or
waived,
if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
Section 10.05. Acceleration of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the
acceleration.
Section 10.06. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any payment of
any Obligations with respect to the Notes at a time when the Trustee or such
Holder, as applicable, has actual knowledge that such payment is prohibited by
Section 10.04 hereof, such payment shall be held by the Trustee or such Holder,
in trust for the benefit of, and shall be paid forthwith over and delivered,
upon written request, to, the holders of Senior Debt as their interests may
appear or their Representative under the indenture or other agreement (if any)
pursuant to which Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt.
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With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
Section 10.07. Notice by Company.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt as
provided in this Article 10.
Section 10.08. Subrogation.
After all Senior Debt is paid in full and until the Notes are paid in
full, Holders of Notes shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.
Section 10.09. Relative Rights.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture shall:
(i) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
(ii) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders of
Senior Debt; or
(iii) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of
or interest on a Note on the due date, the failure is still a Default or Event
of Default.
Section 10.10. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt to enforce the subordination
provisions contained in this Section 10 shall be impaired by any act or failure
to act by the Company or any Holder or by the failure of the Company or any
Holder to comply with this Indenture.
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Section 10.11. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
Section 10.12. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
Section 10.13. Authorization to Effect Subordination.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Representatives are hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.
Section 10.14. Amendments.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Debt.
ARTICLE 11
NOTE GUARANTEES
Section 11.01. Guarantee.
Subject to this Article 11, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the
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obligations of the Company hereunder or thereunder, that: (a) the principal of
and interest on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Note Guarantee. The Guarantors shall have the right to
seek contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Guarantee.
Section 11.02. Subordination of Note Guarantee.
The Obligations of each Guarantor under its Note Guarantee pursuant
to this Article 11 shall be junior and subordinated to the Senior Guarantee of
such Guarantor on the same basis as the Notes are junior and subordinated to
Senior Debt of the Company. For the purposes of the foregoing sentence, the
Trustee and the Holders shall have the right to receive and/or retain payments
by any of the Guarantors only at such times as they may receive and/or retain
payments in respect of the Notes pursuant to this Indenture, including Article
10 hereof.
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<PAGE> 77
Section 11.03. Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Guarantor that are relevant under such
laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Article 11, result
in the obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.
Section 11.04. Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form included in Exhibit E shall be endorsed by an Officer of such Guarantor
on each Note authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of such Guarantor by its President or one of its
Vice Presidents by manual or facsimile signatures.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any new
Subsidiaries subsequent to the date of this Indenture, if required by Section
4.19 hereof, the Company shall cause such Subsidiaries to execute supplemental
indentures to this Indenture and Note Guarantees in accordance with Section 4.19
hereof and this Article 11, to the extent applicable.
Section 11.05. Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.06, no Guarantor may
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person whether or not affiliated with such Guarantor
unless:
(a) subject to Section 11.06 hereof, the Person formed by or
surviving any such consolidation or merger (if other than a Guarantor or the
Company) unconditionally assumes all the obligations of such Guarantor, pursuant
to a supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Notes, the Indenture and the Note Guarantee on the terms set
forth herein or therein; and
(b) immediately after giving effect to such transaction, no Default
or Event of Default exists.
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<PAGE> 78
In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
Note Guarantee endorsed upon the Notes and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by the
Guarantor, such successor Person shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of the Note
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Note Guarantees so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Note Guarantees theretofore
and thereafter issued in accordance with the terms of this Indenture as though
all of such Note Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 11.06. Releases Following Sale of Assets.
In the event of a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all the capital stock of any Guarantor, in each case to a Person
that is not (either before or after giving effect to such transactions) a
Restricted Subsidiary of the Company, then such Guarantor (in the event of a
sale or other disposition, by way of merger, consolidation or otherwise, of all
of the capital stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all or substantially
all of the assets of such Guarantor) will be released and relieved of any
obligations under its Note Guarantee; provided that the Net Proceeds of such
sale or other disposition are applied in accordance with the applicable
provisions of this Indenture, including without limitation Section 4.10 hereof.
Upon delivery by the Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such sale or other disposition was made by
the Company in accordance with the provisions of this Indenture, including
without limitation Section 4.10 hereof, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from its
obligations under its Note Guarantee.
Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article 11.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA ss.318(c), the imposed duties shall control.
Section 12.02. Notices.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return
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<PAGE> 79
receipt requested), telex, telecopier or overnight courier guaranteeing next day
delivery, to the others' address:
If to the Company and/or any Guarantor:
Juno Lighting, Inc.
1300 South Wolf Road
Des Plaines, Illinois 60018
Telecopier No.: (847) 813-8201
Attention: George Bilek
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue, Suite 220
Palo Alto, California 94301
Telecopier No.: (650) 470-4570
Attention: Gregory Smith
If to the Trustee:
Firstar Bank of Minnesota, N.A.
101 East 5th Street, 12th Floor
Saint Paul, Minnesota 55101
Telecopier No.: (651) 229-3954
Attention: Corporate Trust Department
The Company, any Guarantor or the Trustee, by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt is
electronically acknowledged, if telecopied; and the next Business Day after
timely delivery to the courier, if sent by overnight courier guaranteeing next
day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
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<PAGE> 80
Section 12.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Guarantors, the Trustee, the Registrar and anyone else shall have the protection
of TIA ss. 312(c).
Section 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee, if
reasonably requested by the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied (which counsel, as to
factual matters, may rely on an Officers' Certificate).
Section 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied, provided that with respect to
matters of fact an Opinion of Counsel may rely on an Officers' Certificate or
certificates of public officials.
Section 12.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator,
partner, member or stockholder of the Company or any Guarantor, as such, shall
have any liability for any obligations of the Company or such Guarantor under
the Notes, the Note Guarantees or this Indenture or for any claim
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<PAGE> 81
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
Section 12.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW (EXCEPT FOR SECTIONS 5-1401 AND
5-1402 OF THE NEW YORK CIVIL GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE
LAWS AND RULES 327(b)) TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
Section 12.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 12.10. Successors.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors. All agreements of each Guarantor in this Indenture shall bind
its successors, except as otherwise provided in Section 11.05.
Section 12.11. Severability.
In case any provision in this Indenture, the Notes or the Guarantees
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 12.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 12.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
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<PAGE> 82
SIGNATURES
Dated as of June 30, 1999
JUNO LIGHTING, INC.
By: /s/ Joel W. Chemers
-------------------------------------
Name: Joel W. Chemers
Title: Vice President, Corporate Planning
By: /s/ George J. Bilek
-------------------------------------
Name: George J. Bilek
Title: Vice President, Finance and
Treasurer
JUNO MANUFACTURING, INC.
By: /s/ Joel W. Chemers
-------------------------------------
Name: Joel W. Chemers
Title:
By: /s/ George J. Bilek
-------------------------------------
Name: George J. Bilek
Title:
INDY LIGHTING, INC.
By: /s/ Joel W. Chemers
-------------------------------------
Name: Joel W. Chemers
Title:
By: /s/ George J. Bilek
-------------------------------------
Name: George J. Bilek
Title:
ADVANCED FIBEROPTIC TECHNOLOGIES, INC.
By: /s/ Joel W. Chemers
-------------------------------------
Name: Joel W. Chemers
Title:
By: /s/ George J. Bilek
-------------------------------------
Name: George J. Bilek
Title:
(Signature Page to Indenture)
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<PAGE> 83
FIRSTAR BANK OF MINNESOTA, N.A.
By: /s/ FRANK P. LESLIE III
-------------------------------------
Name: Frank P. Leslie III
Title: Vice President
(Signature Page to Indenture)
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<PAGE> 84
EXHIBIT A
[Face of Note]
- --------------------------------------------------------------------------------
CUSIP/CINS
----------
11% Series A Senior Subordinated Notes due 2009
No. $125,000,000
---
JUNO LIGHTING, INC.
promises to pay to Cede & Co.
or registered assigns,
the principal sum of
------------------------------------------------------------
Dollars on July 1, 2009.
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
Dated: June 30, 1999
JUNO LIGHTING, INC.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
(SEAL)
This is one of the Notes referred to
in the within-mentioned Indenture:
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
By: __________________________________
Authorized Signatory
- --------------------------------------------------------------------------------
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<PAGE> 85
[Back of Note]
11% Series A Senior Subordinated Note due 2009
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Juno Lighting, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 11%
per annum from June 30, 1999 until maturity. The Company will pay interest
semi-annually in arrears on January 1 and July 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be January 1, 2000. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the December 15 or June 15 next preceding the
Interest Payment Date, even if such Notes are canceled after such record date
and on or before such Interest Payment Date, except as provided in Section 2.12
of the Indenture with respect to defaulted interest. The Notes will be payable
as to principal, premium, if any, and interest at the office or agency of the
Company maintained for such purpose within or without the City and State of New
York, or, at the option of the Company, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to principal of and interest, premium on, all Global
Notes and all other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Firstar Bank of Minnesota,
N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated
as of June 30, 1999 ("Indenture") among the Company, the Guarantors and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended and in effect on the date of the Indenture (15 U.S. Code ss.
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling. The Notes are
obligations of the Company limited to $125 million in aggregate principal
amount. Each Holder, by accepting a Note, agrees to be bound by all the terms
and provisions of the Indenture, as the same may be amended from time to time.
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<PAGE> 86
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Notes prior to July 1, 2004.
Thereafter, the Company shall have the option to redeem the Notes, in whole or
in part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on July 1 of the years
indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004........................................................................... 105.9375%
2005........................................................................... 103.9583%
2006........................................................................... 101.9792%
2007 and thereafter............................................................ 100.0000%
</TABLE>
(b) Notwithstanding the provisions of clause (a) of this Section
3.07, at any time prior to July 1, 2002, the Company may on one or more
occasions redeem up to 35% of the aggregate principal amount of Notes issued
under the Indenture at a redemption price of 111.875% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the redemption date, with
the net cash proceeds of one or more Public Equity Offerings; provided that at
least 65% in aggregate principal amount of Notes (including any Additional
Notes) issued under the Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and its
Subsidiaries) and the redemption occurs within 90 days of the date of the
closing of such Public Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest thereon, if any, to the date of purchase (the "Change of Control
Payment"). Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder setting forth the procedures governing the Change
of Control Offer as required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales,
within five days of each date on which the aggregate amount of Excess Proceeds
exceeds $5 million, the Company shall commence an offer to all Holders of Notes
(as "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to purchase
the maximum principal amount of Notes (including any Additional Notes) that may
be purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date fixed for the closing of such offer, in accordance
with the procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes (including any Additional Notes) tendered pursuant to an Asset
Sale Offer is less than the Excess Proceeds, the Company (or such Subsidiary)
may use such deficiency for general corporate purposes. If the aggregate
principal amount of Notes surrendered by Holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro
rata basis. Holders of Notes that are the subject of an offer to purchase will
receive an Asset Sale Offer from the
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<PAGE> 87
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed by first
class mail at least 30 days but not more than 60 days before the redemption date
to each Holder whose Notes are to be redeemed at its registered address. Notes
in denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date, interest ceases to accrue on Notes
or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company or the Trustee may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Company or the Trustee need
not exchange or register the transfer of any Note or portion of a Note selected
for redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Company or the Trustee need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture, the Note Guarantees or the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes and Additional Notes, if any, voting as a single
class, and any existing default or compliance with any provision of the
Indenture, the Note Guarantees or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Notes and
Additional Notes, if any, voting as a single class. Without the consent of any
Holder of a Note, the Indenture, the Note Guarantees or the Notes may be amended
or supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's or Guarantor's obligations to
Holders of the Notes in case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, to
provide for the Issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, or to allow any Guarantor to execute a supplemental
indenture to the Indenture and/or a Note Guarantee with respect to the Notes.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on the Notes; (ii) default in
payment when due of principal of or premium, if any, on the Notes when the same
becomes due and payable at maturity, upon redemption (including in connection
with an offer to purchase) or otherwise, (iii) failure by the Company to comply
with Sections 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Company
for 60 days after notice to the Company by the Trustee or the Holders of at
least 25% in principal amount of the Notes (including Additional Notes, if any)
then outstanding voting as a single class to comply with certain other
agreements in the Indenture or the Notes; (v) default under certain other
agreements relating to Indebtedness of the Company which default results in the
acceleration of such Indebtedness prior to its express maturity; (vi)
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<PAGE> 88
certain final judgments for the payment of money that are not paid, discharged
or stayed for a period of 60 days; (vii) certain events of bankruptcy or
insolvency with respect to the Company or any of its Significant Restricted
Subsidiaries; and (viii) except as permitted by the Indenture, any Note
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Guarantor or any Person acting on its behalf shall deny or disaffirm its
obligations under such Guarantor's Note Guarantee. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then-outstanding Notes may declare all the Notes to be
due and payable. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all outstanding
Notes will become due and payable without further action or notice. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then-outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator, partner, member or stockholder, of the Company, as such, shall not
have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
15. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the A/B Exchange
Registration Rights Agreement dated as of June 30, 1999, between the Company and
the parties named on the signature pages thereof.
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
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<PAGE> 89
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed hereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Juno Lighting, Inc.
1300 South Wolf Road
Des Plaines, Illinois 60018
Telecopier No.: (847) 813-8201
Attention: George Bilek
A-6
<PAGE> 90
<TABLE>
<S><C>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
-----------------------------------------------------------
(Insert assignee's legal name)
- --------------------------------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------------------------------------
as agent to transfer this Note on the books of the Company. The agent may substitute another to act for
him.
Date:
--------------------
Your Signature:
---------------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*:
----------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
</TABLE>
A-7
<PAGE> 91
<TABLE>
<S><C>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$
-------------------------
Date:
--------------------
Your Signature:
-----------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.:
---------------------------------------
Signature Guarantee*:
-----------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
</TABLE>
A-8
<PAGE> 92
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
<TABLE>
<S><C>
Principal Amount
Amount of decrease in Amount of increase in of Signature of
Principal Amount Principal Amount this Global Note authorized officer of
of of following such decrease Trustee or Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ---------------- ---------------- ------------- ---------
</TABLE>
A-9
<PAGE> 93
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Juno Lighting, Inc.
1300 South Wolf Road
Des Plaines, Illinois 60018
Firstar Bank of Minnesota, N.A.
101 East 5th Street, 12th Floor
Saint Paul, Minnesota 55101
Re: 11% Senior Subordinated Notes due 2009
Reference is hereby made to the Indenture, dated as of June 30, 1999
(the "Indenture"), between Juno Lighting, Inc., as issuer (the "Company"), and
Firstar Bank of Minnesota, N.A., as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
REGULATION S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S.
B-1
<PAGE> 94
Person (other than an Initial Purchaser). Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
Transfer enumerated in the Private Placement Legend printed on the Regulation S
Global Note and/or the Definitive Note and in the Indenture and the Securities
Act.
3. / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) / / such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) / / such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) / / such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
(d) / / such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule
904, and the Transferor hereby further certifies that it has not engaged
in any general solicitation within the meaning of Regulation D under the
Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Note or
Restricted Definitive Notes and the requirements of the exemption claimed,
which certification is supported by (1) a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and (2) an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), to the effect that such
Transfer is in compliance with the Securities Act. Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the IAI Global Note and/or the Definitive Notes and in the
Indenture and the Securities Act.
4. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) / / CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer
is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
B-2
<PAGE> 95
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) / / CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) / / CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
--------------------------------------
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
Dated:
----------------------
B-3
<PAGE> 96
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP 428047AA5), or
(ii) / / Regulation S Global Note (CUSIP U5249HAA7), or
(iii) / / IAI Global Note (CUSIP ); or
(b) / / a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP 428047AA5), or
(ii) / / Regulation S Global Note (CUSIP U5249HAA7), or
(iii) / / IAI Global Note (CUSIP ); or
(iv) / / Unrestricted Global Note (CUSIP ); or
(b) / / a Restricted Definitive Note; or
(c) / / an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
<PAGE> 97
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Juno Lighting, Inc.
1300 South Wolf Road
Des Plaines, Illinois 60018
Firstar Bank of Minnesota, N.A.
101 East 5th Street, 12th Floor
Saint Paul, Minnesota 55101
Re: 11% Senior Subordinated Notes due 2009
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of June 30, 1999
(the "Indenture"), between Juno Lighting, Inc., as issuer (the "Company"), and
Firstar Bank of Minnesota, N.A., as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to
exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount of $____________ in such Note[s] or interests (the "Exchange").
In connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been
C-1
<PAGE> 98
EXHIBIT C
effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(d) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] / / 144A Global Note, / / Regulation S Global Note, / / IAI Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
------------------------------------
[Insert Name of Transferor]
By:
---------------------------------
Name:
Title:
C-2
<PAGE> 99
EXHIBIT C
Dated:
-----------------
C-3
<PAGE> 100
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Juno Lighting, Inc.
1300 South Wolf Road
Des Plaines, Illinois 60018
Firstar Bank of Minnesota, N.A.
101 East 5th Street, 12th Floor
Saint Paul, Minnesota 55101
Re: 11% Senior Subordinated Notes due 2009
Reference is hereby made to the Indenture, dated as of June 30, 1999
(the "Indenture"), between Juno Lighting, Inc., as issuer (the "Company"), and
Firstar Bank of Minnesota, N.A., as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) / / a beneficial interest in a Global Note, or
(b) / / a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any person purchasing the Definitive Note or beneficial interest
in a Global Note from us in a transaction meeting the requirements of clauses
(A) through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies
D-1
<PAGE> 101
EXHIBIT D
with the foregoing restrictions. We further understand that the Notes purchased
by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
-----------------------------------------
[Insert Name of Accredited Investor]
By:
--------------------------------------
Name:
Title:
Dated:
---------------
D-2
<PAGE> 102
EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of June 30, 1999 (the "Indenture") among
Juno Lighting, Inc., a Delaware corporation (the "Company"), the Guarantors
listed on Schedule I thereto and Firstar Bank of Minnesota, N.A., as trustee
(the "Trustee"), (a) the due and punctual payment of the principal of, premium,
if any, and interest on the Notes (as defined in the Indenture), whether at
maturity, by acceleration, redemption or otherwise, the due and punctual payment
of interest on overdue principal and premium, and, to the extent permitted by
law, interest, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee all in accordance with the terms of
the Indenture and (b) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise. The
obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Note Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Note Guarantee. Each Holder of a Note, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee, on behalf of such Holder, to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the
Indenture and (c) appoints the Trustee attorney-in-fact of such Holder for such
purpose; provided, however, that the Indebtedness evidenced by this Note
Guarantee shall cease to be so subordinated and subject in right of payment upon
any defeasance of this Note in accordance with the provisions of the Indenture.
JUNO MANUFACTURING, INC., an Illinois
corporation
By:
------------------------------------------
Name:
Title:
INDY LIGHTING, INC., an Indiana corporation
By:
------------------------------------------
Name:
Title:
ADVANCED FIBEROPTIC TECHNOLOGIES, INC., a
Florida corporation
By:
------------------------------------------
Name:
Title:
E-1
<PAGE> 103
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of Juno Lighting, Inc. (or its permitted successor), a Delaware
corporation (the "Company"), the Company, the other Guarantors (as defined in
the Indenture referred to herein) and Firstar Bank of Minnesota, N.A., as
trustee under the indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of June 30, 1999 providing for
the issuance of an aggregate principal amount of up to $125,000,000 of 11%
Senior Subordinated Notes due 2009 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees as follows:
(a) Along with all Guarantors named in the Indenture, to
jointly and severally Guarantee to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and
assigns, the Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and
interest on the Notes, if any, if lawful, and all other obligations
of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and
(ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same will
be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same
immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or
the Indenture, the absence of any action to enforce the
F-1
<PAGE> 104
same, any waiver or consent by any Holder of the Notes with respect to any
provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of a
guarantor.
(c) The following is hereby waived: diligence presentment,
demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding
first against the Company, protest, notice and all demands whatsoever.
(d) This Note Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture, and the Guaranteeing Subsidiary accepts all obligations of a
Guarantor under the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to either
the Company or the Guarantors, any amount paid by either to the Trustee or
such Holder, this Note Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any
right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 of the
Indenture for the purposes of this Note Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in
respect of the obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such obligations as provided in Article 6
of the Indenture, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this
Note Guarantee.
(h) The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does
not impair the rights of the Holders under the Guarantee.
(i) Pursuant to Section 10.02 of the Indenture, after giving
effect to any maximum amount and any other contingent and fixed
liabilities that are relevant under any applicable Bankruptcy or
fraudulent conveyance laws, and after giving effect to any collections
from, rights to receive contribution from or payments made by or on behalf
of any other Guarantor in respect of the obligations of such other
Guarantor under Article 10 of the Indenture, this new Note Guarantee shall
be limited to the maximum amount permissible such that the obligations of
such Guarantor under this Note Guarantee will not constitute a fraudulent
transfer or conveyance.
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that
the Note Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
F-2
<PAGE> 105
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) The Guaranteeing Subsidiary may not consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity whether or not affiliated with such Guarantor
unless:
(i) subject to Sections 10.04 and 10.05 of the Indenture, the
Person formed by or surviving any such consolidation or merger (if other
than a Guarantor or the Company) unconditionally assumes all the
obligations of such Guarantor, pursuant to a supplemental indenture in
form and substance reasonably satisfactory to the Trustee, under the
Notes, the Indenture and the Note Guarantee on the terms set forth herein
or therein; and
(ii) immediately after giving effect to such transaction, no
Default or Event of Default exists.
(b) In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the Note Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of the Indenture to be
performed by the Guarantor, such successor corporation shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor corporation thereupon may cause to be
signed any or all of the Note Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Note Guarantees so issued shall in all
respects have the same legal rank and benefit under the Indenture as the Note
Guarantees theretofore and thereafter issued in accordance with the terms of the
Indenture as though all of such Note Guarantees had been issued at the date of
the execution hereof.
(c) Except as set forth in Articles 4 and 5 and Section 10.05 of
Article 10 of the Indenture, and notwithstanding clauses (a) and (b) above,
nothing contained in the Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.
5. RELEASES.
(a) In the event of a sale or other disposition of all of the assets
of any Guarantor, by way of merger, consolidation or otherwise, or a sale or
other disposition of all to the capital stock of any Guarantor, in each case to
a Person that is not (either before or after giving effect to such transaction)
a Restricted Subsidiary of the Company, then such Guarantor (in the event of a
sale or other disposition, by way of merger, consolidation or otherwise, of all
of the capital stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all or substantially
all of the assets of such Guarantor) will be released and relieved of any
obligations under its Note Guarantee; provided that the Net Proceeds of such
sale or other disposition are applied in accordance with the applicable
provisions of the Indenture, including without limitation Section 4.10 of the
Indenture. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of the
Indenture, including without limitation Section 4.10 of the Indenture, the
Trustee shall execute any documents reasonably required in order to evidence the
release of any Guarantor from its obligations under its Note Guarantee.
F-3
<PAGE> 106
(b) Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under the Indenture
as provided in Article 10 of the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. COUNTERPARTS The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
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<PAGE> 107
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, ____
[GUARANTEEING SUBSIDIARY]
By:
------------------------------------------
Name:
Title:
JUNO LIGHTING, INC., a Delaware corporation
By:
------------------------------------------
Name:
Title:
JUNO MANUFACTURING, INC., an Illinois
corporation
By:
------------------------------------------
Name:
Title:
INDY LIGHTING, INC., an Indiana corporation
By:
------------------------------------------
Name:
Title:
ADVANCED FIBEROPTIC TECHNOLOGIES, INC., a
Florida corporation
By:
------------------------------------------
Name:
Title:
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
By:
------------------------------------------
Authorized Signatory
F-5
<PAGE> 108
EXHIBIT H
SCHEDULE I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under the Indenture as of
the Issue Date:
Juno Manufacturing, Inc., an Illinois corporation
Indy Lighting, Inc., an Indiana corporation
Advanced Fiberoptic Technologies, Inc., a Florida corporation
H-1
<PAGE> 1
EXHIBIT 4.2
A/B EXCHANGE
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 30, 1999
BY AND AMONG
JUNO LIGHTING, INC.
JUNO MANUFACTURING, INC.
INDY LIGHTING, INC.
ADVANCED FIBEROPTIC TECHNOLOGIES, INC.
AND
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
<PAGE> 2
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of June 30, 1999, by and among Juno Lighting, Inc., a Delaware
corporation (the "COMPANY"), Juno Manufacturing, Inc., an Illinois corporation,
Indy Lighting, Inc., an Indiana corporation, and Advanced Fiberoptic
Technologies, Inc., a Florida corporation (each a "GUARANTOR" and, collectively,
the "GUARANTORS"), and Banc of America Securities LLC and Credit Suisse First
Boston Corporation (each an "INITIAL PURCHASER" and, collectively, the "INITIAL
PURCHASERS"), each of whom has agreed to purchase the Company's 11%
Series A Senior Subordinated Notes due 2009 (the "SERIES A NOTES") pursuant to
the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated June
24, 1999 (the "PURCHASE AGREEMENT"), by and among the Company, the Guarantors
and the Initial Purchasers. In order to induce the Initial Purchasers to
purchase the Series A Notes, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution and delivery of this Agreement
is a condition to the obligations of the Initial Purchasers set forth in Section
5 of the Purchase Agreement. Capitalized terms used herein and not otherwise
defined shall have the meaning assigned to them the Indenture, dated June 30,
1999, between the Company and Firstar Bank of Minnesota, N.A., as Trustee,
relating to the Series A Notes and the Series B Notes (the "INDENTURE").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
CERTIFICATED SECURITIES: Definitive Notes, as defined in the
Indenture.
CLOSING DATE: The date of this Agreement.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal amount of Series A Notes tendered by
Holders thereof pursuant to the Exchange Offer.
CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.
EFFECTIVENESS DEADLINE: As defined in Section 3(a) and 4(a) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
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<PAGE> 3
EXCHANGE OFFER: The offer by the Company to Holders of Series A Notes
to exchange a principal amount of Series B Notes (which shall be registered
pursuant to the Exchange Offer Registration Statement) equal to the outstanding
principal amount of Series A Notes that are tendered by such Holders in
connection with such offer.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Series A Notes to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Act and outside the United States
to persons other than U.S. persons in offshore transactions meeting the
requirements of Regulation S under the Act.
FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
HOLDERS: As defined in Section 2 hereof.
PERSON: An individual, partnership, corporation, trust, limited
liability company, unincorporated organization or a government or agency or
political subdivision thereof.
PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Series B Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
REGULATION S: Regulation S promulgated under the Act.
RULE 144: Rule 144 promulgated under the Act.
SERIES B NOTES: The Company's 11% Series B Senior Subordinated Notes
due 2009 to be issued pursuant to the Indenture: (i) in the Exchange Offer or
(ii) as contemplated by Section 4 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
2
<PAGE> 4
TRANSFER RESTRICTED SECURITIES: Each (A) Series A Note (including any
guarantee by the Guarantors thereof), until the earliest to occur of (i) the
date on which such Series A Note is exchanged in the Exchange Offer for a Series
B Note which is entitled to be resold to the public by the Holder thereof
without complying with the prospectus delivery requirements of the Act, (ii) the
date on which such Series A Note (including any guarantee by the Guarantors
thereof) has been disposed of in accordance with a Shelf Registration Statement
(and the purchasers thereof have been issued Series B Notes), (iii) the date on
which such Series A Note (including any guarantee by the Guarantors thereof) is
distributed to the public pursuant to Rule 144 under the Act and each (B) Series
B Note held by a Broker-Dealer until the date on which such Series B Note is
disposed of by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including the
delivery of the Prospectus contained therein), or (iv) the date on which such
Series A Note has been resold outside the United States to persons other than
U.S. Persons in offshore transactions meeting the requirements of Regulation S.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable law
or Commission policy (after the procedures set forth in Section 6(a)(i) below
have been complied with), the Company and the Guarantors shall (i) cause the
Exchange Offer Registration Statement to be filed with the Commission as soon as
practicable after the Closing Date, but in no event later than 60 days after the
Closing Date (such 60th day being the "FILING DEADLINE"), (ii) use its
reasonable best efforts to cause such Exchange Offer Registration Statement to
become effective at the earliest possible time, but in no event later than 150
days after the Closing Date (such 150th day being the "EFFECTIVENESS DEADLINE"),
(iii) in connection with the foregoing, (A) file all pre-effective amendments to
such Exchange Offer Registration Statement as may be necessary in order to cause
it to become effective, (B) file, if applicable, a post-effective amendment to
such Exchange Offer Registration Statement pursuant to Rule 430A under the Act
and (C) cause all necessary filings, if any, in connection with the registration
and qualification of the Series B Notes to be made under the Blue Sky laws of
such jurisdictions as are necessary to permit Consummation of the Exchange
Offer, and (iv) upon the effectiveness of such Exchange Offer Registration
Statement, commence and Consummate the Exchange Offer. The Exchange Offer shall
be on the appropriate form permitting (i) registration of the Series B Notes to
be offered in exchange for the Series A Notes that are Transfer Restricted
Securities and (ii) resales of Series B Notes by each Broker-Dealer that
tendered into the Exchange Offer Series A Notes that such Broker-Dealer acquired
for its own account as a result of market-making activities or other trading
activities (other than Series A Notes acquired directly from the Company or any
of its Affiliates) as contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall use their respective
reasonable best efforts to cause the Exchange Offer Registration Statement to be
effective continuously, and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 business days. The Company and the
Guarantors shall use their respective reasonable best efforts cause the Exchange
Offer to comply with all applicable federal and state securities laws. No
securities other than the Series B Notes shall be included in the Exchange Offer
Registration
3
<PAGE> 5
Statement. The Company and the Guarantors shall use their respective best
efforts to cause the Exchange Offer to be Consummated on the earliest
practicable date after the Exchange Offer Registration Statement has become
effective, but in no event later than 30 business days thereafter (such 30th day
being the "CONSUMMATION DEADLINE").
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any Affiliate of the Company) may exchange such
Transfer Restricted Securities pursuant to the Exchange Offer, provided, that
such Broker-Dealer may be deemed to be an "underwriter" within the meaning of
the Act and must, therefore, deliver a Prospectus meeting the requirements of
the Act in connection with any resales of the Series B Notes received by such
Broker-Dealer in the Exchange Offer. Such "Plan of Distribution" section shall
also contain all other information with respect to such resales by
Broker-Dealers that the Commission may require in order to permit such sales
pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Transfer Restricted Securities held by
any such Broker-Dealer, except to the extent required by the Commission as a
result of a change in policy, rules or regulations after the date of this
Agreement. See the Shearman & Sterling no-action letter (available July 2,
1993).
Because such Broker-Dealer may be deemed to be an "underwriter" within
the meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Series B
Notes received by such Broker-Dealer in the Exchange Offer, the Company and the
Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement. To the extent necessary to ensure that the prospectus
contained in the Exchange Offer Registration Statement is available for sales of
Series B Notes acquired by Broker-Dealers, the Company and the Guarantors agree
to use their respective reasonable best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented, amended and current
as required by and subject to the provisions of Section 6(a) and (c) hereof and
in conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of 180 days from the Consummation Deadline or such shorter period as will
terminate when all Transfer Restricted Securities covered by such Registration
Statement have been sold pursuant thereto. The Company shall provide sufficient
copies of the latest version of such Prospectus to such Broker-Dealers, promptly
upon request, at any time during such 180- day period.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not permitted by
applicable law or Commission policy (after the Company and the Guarantors have
complied with the procedures set forth in Section 6(a)(i) below) or (ii) if any
Holder of Transfer Restricted Securities that is a "qualified institutional
buyer" as defined in Rule 144A under the Act shall notify the Company within 20
Business Days following the Consummation Deadline that (A) such Holder was
prohibited by law or Commission policy from participating in the Exchange Offer
or (B) such Holder may not resell the Series B Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder or (C) such Holder is a Broker-Dealer
and holds Series A Notes acquired directly from the Company or any of its
Affiliates, then the Company and the Guarantors shall:
4
<PAGE> 6
(x) cause to be filed, on or prior to 60 days after the earlier of (i) the
date on which the Company determines that the Exchange Offer Registration
Statement cannot be filed as a result of clause (a)(i) above and (ii) the date
on which the Company receives the notice specified in clause (a)(ii) above,
(such earlier date, the "FILING DEADLINE"), a shelf registration statement
pursuant to Rule 415 under the Act (which may be an amendment to the Exchange
Offer Registration Statement) (the "SHELF REGISTRATION STATEMENT"), relating to
all Transfer Restricted Securities, and
(y) shall use their respective reasonable best efforts to cause such Shelf
Registration Statement to become effective on or prior to 90 days after the
Filing Deadline for the Shelf Registration Statement (such 90th day the
"EFFECTIVENESS DEADLINE")
If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the Company is
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable federal law (i.e.,
clause (a)(i) above), then the filing of the Exchange Offer Registration
Statement shall be deemed to satisfy the requirements of clause (x) above;
provided that, in such event, the Company shall remain obligated to meet the
Effectiveness Deadline set forth in clause (y).
To the extent necessary to ensure that the Shelf Registration Statement
is available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and
the Guarantors shall use their respective reasonable best efforts to keep any
Shelf Registration Statement required by this Section 4(a) continuously
effective, supplemented, amended and current as required by and subject to the
provisions of Sections 6(b) and (c) hereof and in conformity with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of at least two
years (as extended pursuant to Section 6(c)(i)) following the Closing Date, or
such shorter period as will terminate when all Transfer Restricted Securities
covered by such Shelf Registration Statement have been sold pursuant thereto or
may be sold pursuant to Regulation S without resale restriction or pursuant to
Rule 144 without any volume limitation.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 5 days after receipt of a request therefor, any
information as the Company may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary Prospectus included
therein. No Holder of Transfer Restricted Securities shall be entitled to
Additional Interest pursuant to Section 5 hereof unless and until such Holder
shall have provided all such information. Each selling Holder agrees to promptly
furnish additional information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
(c) Notwithstanding any other provision of this Agreement, in no event
shall the Company be obligated to file or keep effective any Registration
Statement after the second anniversary of the Issue Date.
SECTION 5. ADDITIONAL INTEREST
If (i) any Registration Statement required to be filed by the Company
by this Agreement is not filed with the Commission on or prior to the applicable
Filing Deadline, (ii) any such Registration
5
<PAGE> 7
Statement has not been declared effective by the Commission on or prior to the
applicable Effectiveness Deadline, (iii) the Exchange Offer has not been
Consummated on or prior to the Consummation Deadline or (iv) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded immediately by a post-effective amendment to such
Registration Statement that cures such failure and that is itself declared
effective immediately (each such event referred to in clauses (i) through (iv),
a "REGISTRATION DEFAULT"), then the Company and the Guarantors hereby jointly
and severally agree to pay to each Holder of Transfer Restricted Securities
affected thereby as liquidated damages additional interest to each Holder of
Notes ("ADDITIONAL INTEREST"), which shall accrue at a rate of 0.5% per annum
during the first 90-day period immediately following the occurrence of the first
Registration Default. The rate of Additional Interest shall increase by an
additional 0.5% per annum with respect to each subsequent 90-day period until
all Registration Defaults have been cured, up to a maximum rate of Additional
Interest of 2.0% per annum; provided that the Company and the Guarantors shall
in no event be required to pay Additional Interest for more than one
Registration Default at any given time. Notwithstanding anything to the contrary
set forth herein, (1) upon filing of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the case of (i)
above, (2) upon the effectiveness of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the case of (ii)
above, (3) upon Consummation of the Exchange Offer, in the case of (iii) above,
or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared effective or made usable in the case of (iv) above, the
Additional Interest payable with respect to the Transfer Restricted Securities
as a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued Additional Interest shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which Additional
Interest is due cease to be Transfer Restricted Securities, all obligations of
the Company and the Guarantors to pay Additional Interest with respect to
securities shall survive until such time as such obligations with respect to
such securities shall have been satisfied in full.
The parties hereto agree that the Additional Interest provided for in
this Section 5 constitutes a reasonable estimate of the damages that will be
suffered by Holders of Transfer Restricted Securities by reason of the happening
of a Registration Default.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective reasonable
best efforts to effect such exchange and to permit the resale of Series B Notes
by each Broker-Dealer that tendered in the Exchange Offer Series A Notes that
such Broker-Dealer acquired for its own account as a result of its market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and (z) comply with
all of the following provisions:
(i) If, in the reasonable opinion of counsel to the Company
there is a substantial question as to whether the Exchange Offer is
permitted by applicable law or Commission policy, the Company and the
Guarantors hereby agree to seek a no-action letter or other favorable
6
<PAGE> 8
decision from the Commission allowing the Company and the Guarantors to
Consummate an Exchange Offer for such Transfer Restricted Securities.
The Company and the Guarantors hereby agree to pursue the issuance of
such a decision to the Commission staff level but shall not be required
to take unreasonable action to effect a change of Commission policy. In
connection with the foregoing, the Company and the Guarantors hereby
agree to take all such other actions as may be requested by the
Commission or otherwise required in connection with the issuance of
such decision, including without limitation (A) participating in
telephonic conferences with the Commission, (B) delivering to the
Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded
that such an Exchange Offer should be permitted and (C) diligently
pursuing a resolution (which need not be favorable) by the Commission
staff.
(ii) As a condition to its participation in the Exchange
Offer, each Holder of Transfer Restricted Securities (including,
without limitation, any Holder who is a Broker-Dealer) shall furnish,
upon the request of the Company, prior to the Consummation of the
Exchange Offer, a written representation to the Company and the
Guarantors (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the
effect that (A) it is not an Affiliate of the Company, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the
Series B Notes to be issued in the Exchange Offer and (C) it is
acquiring the Series B Notes in its ordinary course of business. In
addition, all such Holders of Transfer Restricted Securities shall
otherwise cooperate with the Company in effecting the Exchange Offer.
As a condition to its participation in the Exchange Offer each Holder
using the Exchange Offer to participate in a distribution of the Series
B Notes shall acknowledge and agree that, if the resales are of Series
B Notes obtained by such Holder in exchange for Series A Notes acquired
directly from the Company or an Affiliate thereof, it (1) could not,
under Commission policy as in effect on the date of this Agreement,
rely on the position of the Commission enunciated in Morgan Stanley and
Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
Corporation (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and
similar no-action letters (including, if applicable, any no-action
letter obtained pursuant to clause (i) above), and (2) must comply with
the registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company and the Guarantors shall provide a
supplemental letter to the Commission (A) stating that the Company and
the Guarantors are registering the Exchange Offer in reliance on the
position of the Commission enunciated in Exxon Capital Holdings
Corporation (available May 13, 1988), Morgan Stanley and Co., Inc.
(available June 5, 1991) as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and, if applicable, any
no-action letter obtained pursuant to clause (i) above, (B) including a
representation that neither the Company nor any Guarantor has entered
into any arrangement or understanding with any Person to distribute the
Series B Notes to be received in the Exchange Offer and that, to the
best of the Company's and each Guarantor's information and belief, each
Holder participating in the Exchange Offer is acquiring the Series B
Notes in its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of the
Series B Notes received in the Exchange Offer and (C) any other
undertaking or representation reasonably required by the Commission as
set forth in any no-action letter obtained pursuant to clause (i)
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<PAGE> 9
above, if applicable.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall:
(i) comply with all the provisions of Section 6(c) below and
use their respective reasonable best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities
being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished to the
Company pursuant to Section 4(b) hereof), and pursuant thereto the
Company and the Guarantors will prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate
form under the Act, which form shall be available for the sale of the
Transfer Restricted Securities in accordance with the intended method
or methods of distribution thereof within the time periods and
otherwise in accordance with the provisions hereof, and
(ii) issue, upon the request of any Holder or purchaser of
Series A Notes covered by any Shelf Registration Statement contemplated
by this Agreement, Series B Notes having an aggregate principal amount
equal to the aggregate principal amount of Series A Notes sold pursuant
to the Shelf Registration Statement and surrendered to the Company for
cancellation; the Company shall register Series B Notes on the Shelf
Registration Statement for this purpose and issue the Series B Notes to
the purchaser(s) of securities subject to the Shelf Registration
Statement in the names as such purchaser(s) shall designate.
(c) General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement, the Company and the
Guarantors shall:
(i) use their respective reasonable best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain an untrue statement of material fact or omit to
state any material fact necessary to make the statements therein not
misleading or (B) not to be effective and usable for resale of Transfer
Restricted Securities during the period required by this Agreement, the
Company and the Guarantors shall file promptly an appropriate amendment
to such Registration Statement curing such defect, and, if Commission
review is required, use their respective reasonable best efforts to
cause such amendment to be declared effective as soon as practicable,
provided, that the Company or the Guarantors may suspend the
effectiveness of a Shelf Registration Statement (a "Shelf Blackout
Period") in the event that (a)(i) an event occurs and is continuing as
a result of which the Shelf Registration Statement would, in the good
faith judgment of the Company or the Guarantors, contain an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading and (ii) if the
Company or the Guarantors determine in good faith that the disclosure
of such event of such time would have a material adverse effect on the
business, operations or prospects of the Company or (b) the disclosure
otherwise relates to a pending material business transaction which has
not yet been publicly disclosed.
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as
may be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the
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<PAGE> 10
case may be; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Act, and to comply fully with Rules 424, 430A and
462, as applicable, under the Act in a timely manner; and comply with
the provisions of the Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable
period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) advise each Holder promptly and, if requested by any
Holder, confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to any applicable Registration Statement or any
post-effective amendment thereto, when the same has become effective,
(B) of any request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for
additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Registration Statement in order
to make the statements therein not misleading, or that requires the
making of any additions to or changes in the Prospectus in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Company and the Guarantors
shall use their respective best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(iv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to each Holder, before filing with the Commission,
copies of any Registration Statement or any Prospectus included therein
or any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review and comment of such Holders in connection with
such sale, if any, for a period of at least five Business Days, and the
Company will not file any such Registration Statement or Prospectus or
any amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which such Holders shall reasonably object within five business days
after the receipt thereof. A Holder shall be deemed to have reasonably
objected to such filing if such Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed,
contains an untrue statement of a material fact
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<PAGE> 11
or omits to state any material fact necessary to make the statements
therein not misleading or fails to comply with the applicable
requirements of the Act;
(vi) promptly prior to the filing of any document that is to
be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to each Holder, make the
Company's and the Guarantors' representatives available for discussion
of such document and other customary due diligence matters, and include
such information in such document prior to the filing thereof as such
Holders may reasonably request;
(vii) make available, at reasonable times, for inspection by
one representative designated by the Holders and one attorney and one
accountant, each reasonably acceptable to the Company, retained by all
such Holders and reasonably acceptable to the Company, such relevant
financial and other records and pertinent corporate documents of the
Company and the Guarantors as are reasonably requested and cause the
Company's and the Guarantors' officers, directors and employees to
supply all information reasonably requested by any such Holders,
attorney or accountant in connection with such Registration Statement
or any post-effective amendment thereto subsequent to the filing
thereof and prior to its effectiveness; provided, that each such party
shall be required to maintain in confidence and not to disclose to any
other person any information or records reasonably designated by the
Company or any Guarantor as being confidential, until such time as (A)
such information becomes a matter of public record (whether by virtue
of its inclusion in such Registration Statement or otherwise), or (B)
such person shall be required so to disclose such information pursuant
to the subpoena or order of any court or other governmental agency or
body having jurisdiction over the matter (subject to the requirements
of such order, and only after such person shall have given the Company
prompt prior written notice of such requirement), or (C) such
information is required to be set forth in such Registration Statement
or the Prospectus included therein or in an amendment to such
Registration Statement or an amendment or supplement to such Prospectus
in order that such Registration Statement, Prospectus, amendment or
supplement, as the case may be, does not contain an untrue statement of
a material fact or omit to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading;
(viii) if reasonably requested by any Holders in connection
with such exchange or sale, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such Holders may reasonably
request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
(ix) furnish to each Holder in connection with such exchange
or sale, without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment
thereto, including all documents incorporated by reference therein and
all exhibits (including exhibits incorporated therein by reference);
(x) deliver to each Holder, without charge, as many copies
of the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Holders reasonably may request;
the Company and the Guarantors hereby consenting to the use (in
accordance with law) of the Prospectus and any amendment or supplement
thereto by each
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<PAGE> 12
selling Holder in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
(xi) upon the reasonable request of any Holder, enter into
such agreements (including underwriting agreements) and make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any applicable
Registration Statement contemplated by this Agreement as may be
reasonably requested by any Holder who holds at least 25% in aggregate
principal amount of Transfer Restricted Securities in connection with
any sale or resale pursuant to any applicable Registration Statement
provided, that neither the Company nor the Guarantors shall be required
to enter into any such agreement more than once with respect to all of
the Transfer Restricted Securities and, in the case of a Shelf
Registration Statement, may delay entering into such agreement if the
respective Boards of Directors of the Company or the Guarantors
determines in good faith that it is in the best interests of the
Company or a Guarantor not to disclose the existence of or facts
surrounding any proposed or pending material corporate transaction
involving the Company or any Guarantor. In such connection, the Company
and the Guarantors shall:
(A) upon request of any Holder who holds at least 25% in
aggregate principal amount of Transfer Restricted Securities,
furnish, upon receipt of customary representations of such Holder
(or in the case of paragraphs (2) and (3), use its best efforts to
cause to be furnished) to such Holder, upon Consummation of the
Exchange Offer or upon the effectiveness of the Shelf Registration
Statement, as the case may be:
(1) a certificate, dated such date, signed on behalf of
the Company and each Guarantor by (x) the President or any Vice
President and (y) a principal financial or accounting officer of
the Company and such Guarantor, confirming, as of the date
thereof, the matters set forth in Sections 5(b)(ii) and 5(f) of
the Purchase Agreement and such other similar matters as such
Holders may reasonably request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Guarantors covering matters similar to those set
forth in Sections 5(c) and 5(d) of the Purchase Agreement and
such other matters as such Holders may reasonably request, and
in any event including a statement to the effect that such
counsel has participated in conferences with officers and other
representatives of the Company and the Guarantors,
representatives of the independent public accountants for the
Company and the Guarantors and although such counsel is not
passing upon, and does not assume any responsibility for and has
not independently verified the accuracy, completeness or
fairness of such statements; and that such counsel advises that,
on the basis of the foregoing, no facts came to such counsel's
attention that caused such counsel to believe that the
applicable Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became
effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or
that the Prospectus contained in such Registration Statement as
of its date and, in the case of the opinion dated the date of
Consummation of the Exchange Offer, as of the date of
Consummation, contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made,
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<PAGE> 13
not misleading. Without limiting the foregoing, such counsel may
state further that such counsel assumes no responsibility for,
and has not independently verified, the accuracy, completeness
or fairness of the financial statements, notes and schedules and
other financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated the date of
Consummation of the Exchange Offer, or as of the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with
underwritten offerings, and affirming the matters set forth in
the comfort letters delivered pursuant to Section 5(a) of the
Purchase Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders to evidence compliance
with the matters covered in clause (A) above and with any
customary conditions contained in the any agreement entered into
by the Company and the Guarantors pursuant to this clause (xi);
(xii) prior to any public offering of Transfer Restricted
Securities, reasonably cooperate with the selling Holders and one
counsel designated by such Holders in connection with the registration
and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling
Holders may reasonably request and do any and all other acts or things
reasonably necessary or reasonably advisable to enable the disposition
in such jurisdictions of the Transfer Restricted Securities covered by
the applicable Registration Statement; provided, however, that neither
the Company nor any Guarantor shall be required to register or qualify
as a foreign corporation where it is not now so qualified or to take
any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and provided that such certificates representing Transfer
Restricted Securities be in such denominations and be registered such
names as the selling Holders may reasonably request at least two
Business Days prior to such sale of Transfer Restricted Securities;
(xiv) use their respective reasonable best efforts to cause
the disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (xii) above;
(xv) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with The
Depository Trust Company;
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(xvi) otherwise use their respective reasonable best efforts
to comply with all applicable rules and regulations of the Commission,
and make generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is
defined in paragraph (c) of Rule 158 under the Act);
(xvii) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance
with the terms of the TIA; and execute and use its best efforts to
cause the Trustee to execute, all documents that may be required to
effect such changes and all other forms and documents required to be
filed with the Commission to enable such Indenture to be so qualified
in a timely manner; and
(xviii) provide promptly to each Holder, upon request, each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
Any reference in this Section 6(c) to a Holder shall be deemed to refer
only to a Holder participating in a sale or resale pursuant to the subject
Registration Statement.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT
DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the Recommencement Date.
The Company may require each Holder of Transfer Restricted Securities
as to which any registration is being effected to furnish to the Company such
information regarding such Holder and such Holder's intended method of
distribution of the applicable Transfer Restricted Securities as the Company may
from time to time reasonably request in writing, but only to the extent that
such information is required in order to comply with the Act. Each such Holder
agrees to notify the Company as promptly as practicable of (i) any inaccuracy or
change in information previously furnished by such Holder to the Company or (ii)
the occurrence of any event, in either case, as a result of which any Prospectus
relating to such registration contains or would contain an untrue statement of a
material fact regarding such Holder or such Holder's intended method of
distribution of the applicable Transfer Restricted Securities or omits to state
any material fact regarding such Holder or such Holder's intended method of
distribution of the
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<PAGE> 15
applicable Transfer Restricted Securities required to be stated therein or
necessary to make the statements therein not misleading and promptly to furnish
to the Company any additional information required to correct and update any
previously furnish to the Company any additional information required to correct
and update any previously furnished information or required so that such
Prospectus shall not contain, with respect to such Holder or the distribution of
the applicable Transfer Restricted Securities an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Series B Notes to be issued in the Exchange Offer and printing of
Prospectuses whether for exchanges, sales, market making or otherwise),
messenger and delivery services; (iv) all reasonable fees and disbursements of
counsel for the Company, the Guarantors and the one designated counsel for the
Holders of Transfer Restricted Securities; (v) all application and filing fees
in connection with listing the Series B Notes on a national securities exchange
or automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the
Company and the Guarantors (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities who are tendering Series A Notes into in the Exchange Offer and/or
selling or reselling Series A Notes or Series B Notes pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Latham & Watkins,
unless another firm shall be chosen by the Holders of a majority in principal
amount of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act), from and against any and all losses,
claims, damages, liabilities, judgments (including without limitation,
reasonable legal or other expenses incurred in connection with investigating or
defending any matter caused by any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement, preliminary
Prospectus or Prospectus (or any amendment or supplement thereto) provided by
the Company to any Holder or any prospective purchaser of Series B Notes or
registered Series A Notes, or caused by any
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<PAGE> 16
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by an untrue statement or omission or alleged untrue statement or
omission that is based upon information relating to any of the Holders furnished
in writing to the Company by any of the Holders, provided, that the
indemnification contained in this paragraph (a) with respect to any preliminary
Prospectus shall not inure to the benefit of any Holder (or to the benefit of
any person controlling the Initial Purchasers) on account of any such loss,
claim, damage, liability or expense arising from the sale of the Transfer
Restricted Securities by such Holder to any person if a copy of any final
Prospectus shall not have been delivered or sent to such person and each untrue
statement of a material fact contained in, and each omission or alleged omission
of a material fact from, such preliminary Prospectus was corrected in the final
Prospectus and it shall have been determined by a final judgment of a court of
competent jurisdiction that any Holder and each person, if any, who controls
such Holder would not have incurred such losses, claims, damages, liabilities
and expenses had the final Prospectus been delivered or sent; and provided
further, that the Company and the Guarantors shall not, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all Holders.
(b) Each Holder of Transfer Restricted agrees, severally and not
jointly, to indemnify and hold harmless the Company and the Guarantors, and
their respective directors and officers, and each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company, or the Guarantors to the same extent as the foregoing indemnity
from the Company and the Guarantors set forth in section (a) above, but only
with reference to information relating to such Holder furnished in writing to
the Company by such Holder expressly for use in any Registration Statement and
shall reimburse the Company and any such director, officer or controlling person
for any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Holder may otherwise have to the Company or
any such director, officer, employee or controlling person.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional
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<PAGE> 17
to those available to the indemnifying party (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf of
the indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by a majority of the Holders, in the case of
the parties indemnified pursuant to Section 8(a), and by the Company and
Guarantors, in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment includes an unconditional
release of the indemnified party from all liability on claims that are or could
have been the subject matter of such action. Each indemnified party, as a
condition to the indemnity agreements contained herein, shall use all reasonable
efforts to cooperate with the indemnifying party in the defense of any such
action.
(d) To the extent that the indemnification provided for in this Section
8 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors, on the one hand, and the Holders, on the other hand, from their sale
of Transfer Restricted Securities or (ii) if the allocation provided by clause
8(d)(i) is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 8(d)(i) above
but also the relative fault of the Company and the Guarantors, on the one hand,
and of the Holder, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
fault of the Company and the Guarantors, on the one hand, and of the Holder, on
the other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or such Guarantor, on the one hand, or by the Holder, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
judgments referred to above shall be deemed to include, any legal (subject to
the second provision of Section 8(a)) or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company, the Guarantors and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount
16
<PAGE> 18
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal (subject to the second provision of Section 8(a)) or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any matter, including any action that could have
given rise to such losses, claims, damages, liabilities or judgments.
Notwithstanding the provisions of this Section 8, no Holder, its directors, its
officers or any Person, if any, who controls such Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities and (ii) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 8(c) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each Holder hereunder
and not joint.
SECTION 9. RULE 144A AND RULE 144
The Company and each Guarantor agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding and during any period in
which the Company or such Guarantor (i) is not subject to Section 13 or 15(d) of
the Exchange Act within the two-year period following the Closing Date, to make
available, upon request of any Holder, to such Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A, and (ii) is subject to Section 13 or 15(d) of the
Exchange Act, to make all filings required thereby in a timely manner in order
to permit resales of such Transfer Restricted Securities pursuant to Rule 144.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company and the Guarantors acknowledge and agree that
any failure by the Company and/or the Guarantors to comply with their respective
obligations under Sections 3 and 4 hereof may result in material irreparable
injury to the Initial Purchasers or the Holders for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Initial Purchasers or
any Holder may obtain such relief as may be required to specifically enforce the
Company's and the Guarantors' obligations under Sections 3 and 4 hereof. The
Company and the Guarantors further agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any Guarantor
will, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any Guarantor has previously entered into any agreement
granting any registration rights with respect to its securities to any Person.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's and
the Guarantors' securities under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended,
17
<PAGE> 19
modified or supplemented, and waivers or consents to or departures from the
provisions hereof may not be given unless (i) in the case of Section 5 hereof
and this Section 10(c)(i), the Company has obtained the written consent of
Holders of all outstanding Transfer Restricted Securities and (ii) in the case
of all other provisions hereof, the Company has obtained the written consent of
Holders of a majority of the outstanding principal amount of Transfer Restricted
Securities (excluding Transfer Restricted Securities held by the Company or its
Affiliates). Notwithstanding the foregoing, a waiver or consent to departure
from the provisions hereof that relates exclusively to the rights of Holders
whose Transfer Restricted Securities are being tendered pursuant to the Exchange
Offer, and that does not affect directly or indirectly the rights of other
Holders whose Transfer Restricted Securities are not being tendered pursuant to
such Exchange Offer, may be given by the Holders of a majority of the
outstanding principal amount of Transfer Restricted Securities subject to such
Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the rights
of Holders hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the
Registrar under the Indenture; and
(ii) if to the Company or the Guarantors:
Juno Lighting, Inc.
1300 South Wolf Road
Des Plaines, Illinois 60018
Telecopier No.: (847) 813-8201
Attention: George Bilek
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue, Suite 220
Palo Alto, California 94301
Telecopier No.: (650) 470-4570
Attention: Gregory Smith
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
is electronically acknowledged, if telecopied; and on the next business day, if
timely delivered to a courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
18
<PAGE> 20
Upon the date of filing of the Exchange Offer or a Shelf Registration
Statement, as the case may be, notice shall be delivered to Banc of America
Securities LLC, on behalf of the Initial Purchasers (in the form attached hereto
as Exhibit A) and shall be addressed to: 100 North Tryon Street, 7th Floor,
Charlotte, North Carolina 28255, Attention: Compliance Department.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders; provided, that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Transfer Restricted Securities in
violation of the terms hereof or of the Purchase Agreement or the Indenture. If
any transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Purchase Agreement, and such
Person shall be entitled to receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF (EXCEPT FOR SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(B)).
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
19
<PAGE> 21
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
JUNO LIGHTING, INC.
By: /s/ George J. Bilek
--------------------------------------
Name: George J. Bilek
Title: Vice President, Finance and
Treasurer
JUNO MANUFACTURING, INC.
By: /s/ George J. Bilek
--------------------------------------
Name: George J. Bilek
Title:
INDY LIGHTING, INC.
By: /s/ George J. Bilek
--------------------------------------
Name: George J. Bilek
Title:
ADVANCED FIBEROPTIC TECHNOLOGIES, INC.
By: /s/ George J. Bilek
--------------------------------------
Name: George J. Bilek
Title:
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
By: BANC OF AMERICA SECURITIES LLC
By: /s/ Leland Hart
----------------------------------------
Name: Leland Hart
Title: Vice President
20
<PAGE> 22
EXHIBIT A
NOTICE OF FILING OF
A/B EXCHANGE OFFER REGISTRATION STATEMENT
To: Banc of America Securities Corporation LLC
100 North Tryon Street, 7th Floor
Charlotte, North Carolina 28255
Attention: Compliance Department
Fax: (704) 388-9444
From: Juno Lighting, Inc.
11% Senior Subordinated Notes due 2009
Date: __, 1999
For your information only (NO ACTION REQUIRED):
Today, __, 1999, we filed [an A/B Exchange Registration Statement/a
Shelf Registration Statement] with the Securities and Exchange Commission. We
currently expect this registration statement to be declared effective within
__ business days of the date hereof.
21
<PAGE> 1
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue, Suite 220
Palo Alto, California 94301
August 27, 1999
Juno Lighting, Inc.
1300 South Wolf Road
Des Plaines, Illinois 60018
Re: Juno Lighting, Inc.
Registration Statement on Form S-4
Ladies and Gentlemen:
We have acted as special counsel to Juno Lighting, Inc., an
Illinois corporation (the "Company"), in connection with the public offering of
$125,000,000 aggregate principal amount of the Company's 11 7/8% Series B Senior
Subordinated Notes due 2009 (the "Exchange Notes"). The Exchange Notes are to be
issued pursuant to an exchange offer (the "Exchange Offer") in exchange for a
like principal amount of the issued and outstanding 11 7/8% Series A Senior
Subordinated Notes due 2009 of the Company (the "Original Notes") under an
Indenture dated as of June 30, 1999 (the "Indenture"), by and among the Company,
Juno Manufacturing, Inc., Indy Lighting, Inc., Advanced Fiberoptic Technologies,
Inc. and Firstar Bank of Minnesota, N.A., as Trustee (the "Trustee"), as
contemplated by the Registration Rights Agreement dated as of June 30, 1999 (the
"Registration Rights Agreement"), by and among the Company, Juno Manufacturing,
Inc., Indy Lighting, Inc., Advanced Fiberoptic Technologies, Inc., Banc of
America Securities LLC and Credit Suisse First Boston Corporation.
This opinion is being furnished in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of
1933, as amended (the "Act").
<PAGE> 2
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
Registration Statement on Form S-4 to be filed with the Securities and Exchange
Commission (the "Commission") on the date hereof under the Act (the
"Registration Statement"); (ii) an executed copy of the Registration Rights
Agreement; (iii) an executed copy of the Indenture; (iv) the Amended and
Restated Certificate of Incorporation of the Company; (v) the By-Laws of the
Company, as amended to date; (vi) certain resolutions adopted by the Board of
Directors of the Company relating to the Exchange Offer, the issuance of the
Original Notes and the Exchange Notes, the Indenture and related matters; (vii)
the Form T-1 of the Trustee filed as an exhibit to the Registration Statement;
and (viii) the form of the Exchange Notes. We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of such records
of the Company and such agreements, certificates of public officials,
certificates of officers or other representatives of the Company and others, and
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. In making our
examination of executed documents or documents to be executed, we have assumed
that the parties thereto, other than the Company, had or will have the power,
corporate or other, to enter into and perform all obligations thereunder and
have also assumed the due authorization by all requisite action, corporate or
other, and execution and delivery by such parties of such documents and the
validity and binding effect on such parties. As to any facts material to the
opinions expressed herein which we have not independently established or
verified, we have relied upon statements and representations of officers and
other representatives of the Company and others.
Our opinions set forth herein are limited to the Delaware
corporate law and the laws of the State of New York which are normally
applicable to transactions of the type contemplated by the Exchange Offer and to
the extent that judicial or regulatory orders or decrees or consents, approvals,
licenses, authorizations, validations, filings, recordings or registrations with
governmental authorities are relevant, to those issued or required under such
laws (all of the foregoing being referred to as "Opined on Law"). We do not
express any opinion with respect to the
<PAGE> 3
law of any jurisdiction other than Opined on Law or as to the effect of any such
non opined law on the opinions herein stated.
Based upon and subject to the foregoing and the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that when the Exchange Notes (in the form examined by us) have been duly
executed and authenticated in accordance with the terms of the Indenture and
have been delivered upon consumption of the Exchange Offer against receipt of
Original Notes surrendered in exchange therefor in accordance with the terms of
the Exchange Offer, the Exchange Notes will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may be limited by (1)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (2) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
In rendering the opinion set forth above, we have assumed that
the execution and delivery by the Company of the Indenture and the Exchange
Notes and the performance by the Company of its obligations thereunder do not
and will not violate, conflict with or constitute a default under any judicial
or administrative order or decree of any governmental authority or any agreement
or instrument to which the Company or its properties is subject, except for
those agreements and instruments which have been identified to us by the Company
as being material to it and which are listed in Part II of the Registration
Statement.
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. We also consent to the
reference to our firm under the caption "Legal Matters" in the Registration
Statement. In giving this consent, we do not thereby admit that we are included
in the category of persons whose consent is required under Section 7 of the Act
or the rules and regulations of the Commission.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
<PAGE> 1
EXHIBIT 10.9
MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (this "Agreement") is made and
entered into as of June 30, 1999, by and between Juno Lighting, Inc. a Delaware
corporation ("Juno"), and Fremont Partners, L.L.C., a Delaware limited liability
company ("Fremont").
BACKGROUND
A. In connection with the conduct and expansion of its business, Juno
requires certain management services to be rendered to it, including strategic
planning, finance, tax and accounting services (the "Services").
B. Fremont desires to render the Services and Juno desires to retain
Fremont to render the Services on the terms and conditions set forth in this
Agreement.
AGREEMENT
1. Services. Within the capabilities of its personnel, Fremont shall
provide to Juno such Services as may from time to time be reasonably requested
by Juno and which are necessary and appropriate for the operation of the
business of Juno. Fremont is hereby specifically authorized to act on Juno's
behalf in providing the Services, and Juno will provide Fremont with such powers
of attorney and other instruments as may be necessary or appropriate for the
provision of Services under this Agreement. This Agreement is not exclusive and
shall not be deemed to prevent Juno from engaging others to perform the same or
similar services or to prevent Fremont from rendering the same or similar
services to others.
2. Compensation. Juno shall pay to Fremont an annual fee of $325,000.
3. Expenses. In addition to paying the compensation set forth in
Section 2 of this Agreement, Juno shall reimburse Fremont for all of Fremont's
reasonable out-of-pocket expenses reasonably incurred by Fremont in providing
the Services under this Agreement. All such reimbursements shall be due and
payable within 30 days after receipt by Juno of supporting services therefor,
provided that payments shall not be required more frequently than on a monthly
bases.
<PAGE> 2
4. Termination. This Agreement shall be effective June 30, 1999, and
shall continue until terminated by Juno or Fremont furnishing at least 60 days'
prior written notice to the other party. All fees payable under this Agreement
by Juno to Fremont shall be prorated as of the date of any termination of this
Agreement.
5. Indemnity. Juno will indemnify and hold Fremont and its members,
officers, employees, agents, representatives and affiliates harmless from and
against any and all losses, damages, costs or expenses (including reasonable
attorneys' fees) which they may suffer arising out of their performance of
services under this Agreement, provided that they will not be indemnified for
losses resulting from their gross negligence or willful misconduct.
6. Limitation of Liability. Fremont shall not be liable to Juno in
connection with services rendered hereunder except for gross negligence or
willful misconduct on the part of Fremont, and in no event shall Fremont be
liable to Juno in an amount in excess of the management fee paid to Fremont
under this Agreement.
7. Miscellaneous.
(a) This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of California without giving effect to
choice of law principles thereunder.
(b) Any notice or other communication under this Agreement must be
given in writing and either (i) delivered in person, (ii) transmitted by telex,
telefax or telecopy mechanism or (iii) mailed by certified or registered mail,
postage prepaid, receipt requested, as follows:
If to Juno, addressed to:
Juno Lighting, Inc.
1300 S. Wolf Road
Des Plaines, Illinois 60017-5065
Attention: President
Telecopy: (847) 813-8201
2
<PAGE> 3
If to Fremont, addressed to:
Fremont Partners, L.L.C.
50 Fremont Street, Suite 3700
San Francisco, CA 94105
Attention: General Counsel
Telecopy: (415) 512-7121
or to such other address or to such other person as either party shall have last
designated by such notice to the other party. Each notice or other communication
shall be effective if given by telecommunication, when transmitted to the
applicable number so specified in this Section 6(b) and an appropriate answer
back is received, if given by mail, three days after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid
or if given by any other means, when actually delivered at such address.
(c) This Agreement may be executed in one or more counterparts and
by different parties in separate counterparts. All of such counterparts shall
constitute one in the same Agreement and shall become effective when one or more
counterparts of this Agreement have been signed by each party and delivered to
the other party. Fax signatures shall constitute original signatures for all
purposes of this Agreement.
(d) This Agreement may be amended only by agreement in writing of
all parties. No waiver of any provision nor consent to any exception to the
terms of this Agreement shall be effective unless in writing and signed by the
party to be bound and then only to the specific purpose, extent and instance so
provided.
(e) Fremont shall render and perform the Services under this
Agreement as an independent contractor and the parties agree that the
relationship between Fremont and Juno shall be that of an independent contractor
and no joint venture, partnership, employer/employee or other similar
relationship shall exist or be create by virtue of the terms of this Agreement.
3
<PAGE> 4
IN WITNESS WHEREOF, the parties have executed this Management
Services Agreement as of the date and year first set forth above.
FREMONT PARTNERS, L.L.C.,
a Delaware limited liability company
By: Fremont Group, L.L.C.,
its managing member
By: Fremont Investors, Inc.,
its manager
By: /s/ ROBERT JAUNICH II
-----------------------------------
Name: Robert Jaunich II
Title: Managing Director
JUNO LIGHTING, INC.,
a Delaware corporation
By: /s/ GEORGE J. BILEK
-----------------------------------
Name: George J. Bilek
Title: Vice President,
Finance and Treasurer
4
<PAGE> 1
EXHIBIT 10.10
================================================================================
U.S. $125,000,000
CREDIT AGREEMENT
Dated as of June 29, 1999
among
Juno Lighting, Inc.,
as Borrower,
THE LENDERS IDENTIFIED HEREIN,
and
NationsBank, N.A.,
as Administrative Agent,
and
Credit Suisse First Boston,
as Syndication Agent
____________________________
Banc of America Securities LLC
Lead Arranger and Book Manager
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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<S> <C> <C>
SECTION 1. DEFINITIONS............................................................................2
1.1 Defined Terms..........................................................................2
1.2 Other Definitional Provisions.........................................................24
1.3 Accounting Terms......................................................................25
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS......................................25
2.1 Revolving Credit Commitments..........................................................25
2.2 Procedure for Revolving Credit Borrowing..............................................26
2.3 Termination or Reduction of Commitments; Repayment of Revolving
Credit Loans..........................................................................26
2.4 L/C Commitment........................................................................27
2.5 Procedure for Issuance of Letters of Credit...........................................28
2.6 Letter of Credit Fees, Commissions and Other Charges..................................28
2.7 L/C Participations....................................................................29
2.8 Reimbursement Obligation of the Company...............................................30
2.9 Obligations Absolute..................................................................31
2.10 Letter of Credit Payments.............................................................31
2.11 Application...........................................................................31
2.12 Swing Line Commitment.................................................................31
2.13 Procedure for Swing Line Borrowing; Prepayment of Swing Line Loans....................32
2.14 Repayment of Swing Line Loans; Participations in Swing Line Loans.....................32
SECTION 3. AMOUNT AND TERMS OF TERM LOAN COMMITMENTS.............................................34
3.1 Term Loans............................................................................34
3.2 Procedure for Term Loan Borrowing.....................................................34
3.3 Repayment of Tranche A Term Loans.....................................................34
3.4 Repayment of Tranche B Term Loans.....................................................35
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND
LETTERS OF CREDIT.....................................................................36
4.1 Evidence of Debt......................................................................36
4.2 Optional Prepayments..................................................................37
4.3 Mandatory Prepayments of Loans and Reductions of Revolving Credit
Commitments...........................................................................38
4.4 Conversion and Continuation Options...................................................41
4.5 Minimum Amounts and Maximum Number of Tranches........................................42
4.6 Interest Rates and Payment Dates......................................................42
4.7 Commitment Fees; Other Fees...........................................................42
4.8 Computation of Interest and Fees......................................................43
4.9 Inability to Determine Interest Rate..................................................43
4.10 Pro Rata Treatment and Payments.......................................................43
4.11 Illegality............................................................................45
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
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<S> <C> <C>
4.12 Requirements of Law...................................................................45
4.13 Taxes.................................................................................46
4.14 Indemnity.............................................................................48
4.15 Mitigation of Obligations; Replacement of Lenders.....................................49
4.16 Investments of Funds in Cash Collateral Accounts......................................49
4.17 Merger Consideration; Dissenting Shares...............................................50
SECTION 5. CONDITIONS PRECEDENT..................................................................50
5.1 Conditions to Initial Loans...........................................................50
5.2 Conditions to Each Extension of Credit................................................56
SECTION 6. REPRESENTATIONS AND WARRANTIES........................................................57
6.1 Financial Condition...................................................................57
6.2 No Change; Solvency...................................................................58
6.3 Corporate Existence; Compliance with Law..............................................58
6.4 Corporate Power; Authorization; Enforceable Obligations...............................58
6.5 No Legal Bar..........................................................................59
6.6 No Material Litigation................................................................59
6.7 Labor Controversy; Material Events....................................................59
6.8 No Default............................................................................59
6.9 Ownership of Property; Liens..........................................................59
6.10 Intellectual Property.................................................................60
6.11 No Burdensome Restrictions............................................................60
6.12 Taxes.................................................................................60
6.13 Federal Regulations...................................................................60
6.14 ERISA.................................................................................60
6.15 Investment Company Act; Other Regulations.............................................61
6.16 Subsidiaries..........................................................................61
6.17 Purpose of Loans......................................................................61
6.18 Environmental Matters.................................................................62
6.19 Regulation H..........................................................................63
6.20 No Material Misstatements.............................................................63
6.21 Representations and Warranties Contained in the Recapitalization
Documents.............................................................................63
6.22 Ownership of the Company..............................................................63
6.23 Collateral............................................................................63
6.24 Senior Debt; No Other Designated Senior Debt..........................................64
6.25 Year 2000 Compliance..................................................................64
6.26 Material Contracts....................................................................64
SECTION 7. AFFIRMATIVE COVENANTS.................................................................65
7.1 Financial Statements..................................................................65
7.2 Certificates; Other Information.......................................................65
7.3 Payment of Obligations................................................................67
7.4 Conduct of Business and Maintenance of Existence......................................67
7.5 Maintenance of Property; Insurance....................................................67
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
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<S> <C> <C>
7.6 Inspection of Property; Books and Records; Discussions................................67
7.7 Notices...............................................................................67
7.8 Environmental Laws....................................................................68
7.9 Further Assurances....................................................................68
7.10 Additional Collateral.................................................................68
7.11 Year 2000 Compliance..................................................................70
SECTION 8. NEGATIVE COVENANTS....................................................................70
8.1 Financial Condition Covenants.........................................................71
8.2 Limitation on Indebtedness............................................................72
8.3 Limitation on Liens...................................................................74
8.4 Limitation on Fundamental Changes.....................................................75
8.5 Limitation on Sale of Assets..........................................................76
8.6 Limitation on Dividends...............................................................77
8.7 Limitation on Capital Expenditures....................................................78
8.8 Limitation on Investments, Loans and Advances.........................................79
8.9 Limitation on Optional Payments and Modifications of Subordinated Debt................80
8.10 Limitation on Transactions with Affiliates............................................80
8.11 Limitation on Changes in Fiscal Year..................................................80
8.12 Limitation on Negative Pledge Clauses.................................................80
8.13 Limitation on Lines of Business; Creation of Subsidiaries.............................81
8.14 Limitation on Modification of Recapitalization Documents..............................81
8.15 Limitation on Modification of Organizational Documents................................81
8.16 Limitation on Subsidiary Distributions and other Actions..............................81
8.17 Limitation on Management Fees.........................................................82
8.18 Cancellation of Shares................................................................82
8.19 Designated Senior Debt................................................................82
SECTION 9. EVENTS OF DEFAULT.....................................................................82
SECTION 10. THE ADMINISTRATIVE AGENT..............................................................85
10.1 Appointment, Powers, and Immunities...................................................85
10.2 Reliance by the Administrative Agent..................................................86
10.3 Defaults..............................................................................86
10.4 Rights as Lender......................................................................87
10.5 Indemnification.......................................................................87
10.6 Non-Reliance on the Administrative Agent and Other Lenders............................88
10.7 Resignation of the Administrative Agent...............................................88
10.8 Syndication Agent.....................................................................88
10.9 Subordinated Debt Documentation.......................................................88
SECTION 11. MISCELLANEOUS.........................................................................88
11.1 Amendments and Waivers................................................................88
11.2 Notices...............................................................................90
11.3 No Waiver; Cumulative Remedies........................................................91
11.4 Survival of Representations and Warranties............................................91
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
11.5 Payment of Expenses and Taxes; Indemnification........................................91
11.6 Successors and Assigns; Participations and Assignments................................93
11.7 Adjustments; Set-off..................................................................95
11.8 Counterparts..........................................................................96
11.9 Severability..........................................................................96
11.10 INTEGRATION...........................................................................96
11.11 GOVERNING LAW.........................................................................96
11.12 Submission To Jurisdiction; Waivers...................................................96
11.13 Acknowledgments.......................................................................97
11.14 WAIVERS OF JURY TRIAL.................................................................97
11.15 Confidentiality.......................................................................97
11.16 Usury Savings Clause..................................................................98
</TABLE>
ANNEXES
ANNEX A - Pricing Grid
SCHEDULES
1.1 - Commitments
6.1 - Sales, Transfers and Dispositions
6.2 - Dividends, Distributions or Redemptions
6.6 - Material Litigation Affecting the Recapitalization
6.7 - Collective Bargaining Agreements
6.9 - Real Property
6.10 - Intellectual Property
6.14 - ERISA Plans
6.16 - Subsidiaries
6.18 - Environmental Matters
6.22 - Ownership of the Company
6.26 - Material Contracts
8.2(e) - Existing Indebtedness
8.3(f) - Existing Liens
8.6 - Distributions
8.8(n) - Existing Investments
(iv)
<PAGE> 6
EXHIBITS
A - Form of Notice of Borrowing
B-1 - Form of Revolving Credit Note
B-2 - Form of Tranche A Term Note
B-3 - Form of Tranche B Term Note
B-4 - Form of Swing Line Note
C - Form of Notice of Conversion/Continuation
D - Form of Guarantee and Collateral Agreement
E - Form of Mortgage
F - Form of Closing Certificate
G - Form of Solvency Certificate
H - Form of Solvency Opinion
I-1 - Form of Legal Opinion of Special Counsel to the Company and its
Subsidiaries
I-2 - Form of Legal Opinion of Special Counsel to the Company and its
Subsidiaries
I-3 - Form of Legal Opinion of Local Counsel to the Company and its
Subsidiaries
I-4 - Form of Legal Opinion of Special Canadian Counsel to the Company
J - Form of Landlord Waiver
K - Form of Compliance Certificate
L - Form of Assignment and Acceptance
M - Form of Intercompany Note
(v)
<PAGE> 7
CREDIT AGREEMENT, dated as of June 29, 1999, among JUNO LIGHTING, INC., a
Delaware corporation (the "Company"), the several banks, financial institutions
and other institutional lenders from time to time parties to this Agreement (the
"Lenders"), NATIONSBANK, N.A. ("NationsBank"), as administrative agent for the
Lenders hereunder, and CREDIT SUISSE FIRST BOSTON ("Credit Suisse"), as
syndication agent for the Lenders.
PRELIMINARY STATEMENTS
WHEREAS, Fremont Investors I, LLC, a Delaware limited liability company
(the "Sponsor"), Jupiter Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of the Sponsor ("Jupiter"), and the Company have entered into
an Agreement and Plan of Recapitalization and Merger dated March 26, 1999 (the
"Recapitalization Agreement"), pursuant to which the Sponsor will participate
and invest in a recapitalization transaction involving the Company (the
"Recapitalization").
WHEREAS, the Recapitalization will be accomplished through the following
steps: (a) Jupiter will merge (the "Merger") with and into the Company with the
Company being the surviving corporation and, pursuant to the Merger, the owner
of each share of common stock of the Company may elect either to receive $25 in
cash for that share or retain that share (subject to proration as provided in
the Recapitalization Agreement), provided that 2,400,000 shares of common stock
constituting approximately 12.9% of the common stock of the Company (before
giving effect to the Merger) will be retained by existing public shareholders,
(b) the Sponsor, certain affiliates of or investors in the Sponsor and/or
management of the Company (collectively, the "Equity Investors") will purchase
for $106,000,000 from the Company newly issued Series A Convertible Preferred
Stock (the "Preferred Shares") of the Company, and (c) except for retained
shares and shares as to which the holder thereof has exercised appraisal rights,
all shares of common stock of the Company that were outstanding immediately
prior to the effective time of the Merger will be automatically canceled and
retired at the effective time of the Merger. References herein to the
"Recapitalization" shall include all of the foregoing transactions and all
related financings and other transactions.
WHEREAS, to finance the Recapitalization, (a) the Company will, prior to
the consummation of the Merger, receive $125,000,000 in cash proceeds (before
giving effect to commissions and expenses) from the issuance of senior
subordinated unsecured notes in a Rule 144A private placement, and (b) the
Company will require $125,000,000 in senior secured credit facilities pursuant
to this Agreement.
WHEREAS, the Administrative Agent and the Lenders are willing to make
available such senior secured credit facilities upon the terms and subject to
the conditions set forth herein.
<PAGE> 8
NOW, THEREFORE, in consideration of the mutual agreements herein set forth,
the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Acquisition" means as to any Person, the acquisition (in a single
transaction or a series of related transactions) by such Person of (a) at least
50% of the outstanding Capital Stock of any other Person, (b) all or
substantially all of the assets of any other Person or (c) assets constituting
one or more business units or divisions of any other Person.
"Adjustment Date" means the third Business Day following receipt by the
Administrative Agent of both (a) the financial statements required to be
delivered pursuant to Section 7.1(a) or 7.1(b), as the case may be, for the most
recently completed fiscal period of the Company and (b) the Compliance
Certificate required to be delivered pursuant to Section 7.2(b) with respect to
such fiscal period, provided, that the first Adjustment Date shall be the first
such date occurring after August 31, 1999.
"Administrative Agent" means NationsBank, as the administrative agent for
the Lenders under this Agreement and the other Loan Documents and any successor
appointed pursuant to Section 10.7.
"Administrative Agent's Payment Office" means the address for payments set
forth in Section 11.2 or such other address as the Administrative Agent may from
time to time specify in accordance with Section 11.2.
"Affected Eurodollar Loans" has the meaning specified in Section 4.3(g).
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the Capital
Stock having ordinary voting power for the election of directors of such Person
or (b) direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.
"Agents" means, collectively, the Administrative Agent and the Syndication
Agent.
"Aggregate Outstanding Revolving Credit" means as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Credit Loans made by such Revolving Credit Lender then
outstanding, (b) such Revolving Credit Lender's Revolving Credit Commitment
Percentage of the L/C Obligations then outstanding, and (c) such Revolving
Credit Lender's Revolving Credit Commitment Percentage of the aggregate
principal amount of all Swing Line Loans then outstanding.
2
<PAGE> 9
"Agreement" means this Credit Agreement.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Loan and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Loan.
"Applicable Percentage" means (a) in the case of the Revolving Credit Loans
and Tranche A Term Loans, (i) 1.000%, if such Loans are Base Rate Loans and (ii)
2.500%, if such Loans are Eurodollar Loans, and (b) in the case of the Tranche B
Term Loans, (i) 1.500% if such Loans are Base Rate Loans, (ii) 3.000% if such
Loans are Eurodollar Loans, (c) in the case of the Letter of Credit fees
pursuant to Section 2.6(b), 2.500%, and (d) in the case of the commitment fee
pursuant to Section 4.7(a), .500%; provided that, (x) from and after the Closing
Date, the Applicable Percentage will be adjusted, on each Adjustment Date
occurring after August 31, 1999, to the Applicable Percentage set forth on
Annex A hereto opposite the Leverage Ratio Level of the Company in effect on
such Adjustment Date, (y) in the event the financial statements required to be
delivered pursuant to Section 7.1(a) or 7.1(b), as applicable, and the related
Compliance Certificate required pursuant to Section 7.2(b) are not delivered
when due, then, during the period from the date on which such financial
statements and Compliance Certificate were required to be delivered until two
Business Days following the date upon which they actually are delivered, the
Applicable Percentage shall be at Leverage Ratio Level I and (z) if at any time
any Event of Default shall have occurred and be continuing, the Applicable
Percentage shall be at Leverage Ratio Level I.
"Assignee" has the meaning specified in 11.6(c).
"Assignment and Acceptance" means an instrument, substantially in the form
of Exhibit L, by which an Assignee becomes a Lender under this Agreement.
"Available Cash" means at any time, (a) the sum of (i) so long as no
Default or Event of Default shall have then occurred and be continuing, the
aggregate Available Revolving Credit Commitments of the Revolving Credit Lenders
at such time and (ii) the aggregate amount of unrestricted cash and Cash
Equivalents of the Company and its Subsidiaries at such time minus (b) the
aggregate amount of taxes that would then be payable if the cash or Cash
Equivalents of the Foreign Subsidiaries were paid as a dividend to the Company
or any of its Domestic Subsidiaries as a result of the payment of such dividend.
"Available Revolving Credit Commitment" means as to any Revolving Credit
Lender at any time, an amount equal to the excess, if any, of (a) the amount of
such Revolving Credit Lender's Revolving Credit Commitment in effect at such
time over (b) the Aggregate Outstanding Revolving Credit of such Revolving
Credit Lender at such time; collectively, as to all the Revolving Credit
Lenders, the "Available Revolving Credit Commitments".
"BAS" means Banc of America Securities LLC.
"Base Rate" means, for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the higher of (a) the Prime Rate
for such day and (b) the Federal
3
<PAGE> 10
Funds Rate for such day plus one-half of one percent (.5%). Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective as of the opening of business on the effective day of such
change in the Prime Rate or Federal Funds Effective Rate.
"Base Rate Loans" means Loans the rate of interest applicable to which is
based upon the Base Rate.
"Base Year" has the meaning specified in Section 4.3(b).
"Borrowing Date" means any Business Day specified in a notice pursuant to
Section 2.2, 2.13 or 3.2 as a date on which the Company requests the Lenders to
make Loans hereunder.
"Business" has the meaning specified in Section 6.18.
"Business Day" means (a) with respect to any borrowings, disbursements and
payments in respect of and calculations and interest rates pertaining to Base
Rate Loans, any Domestic Business Day, and (b) with respect to any borrowings,
disbursements and payments in respect of and calculations, interest rates and
Interest Periods pertaining to Eurodollar Loans, any Domestic Business Day which
is also a day on which dealings in Dollar deposits are carried on in the London
interbank market.
"Capital Expenditures" means as to any Person for any period, the aggregate
amount paid or accrued by such Person and its Subsidiaries for the rental,
lease, purchase (including by way of the acquisition of securities of a Person),
construction or use of any property during such period, the value or cost of
which, in accordance with GAAP, would appear on such Person's consolidated
balance sheet in the category of property, plant or equipment at the end of such
period. Notwithstanding the foregoing, the term "Capital Expenditures" shall not
include (a) capital expenditures in respect of Net Cash Proceeds from any
Casualty Event used to rebuild or replace assets subject to such Casualty Event,
and (b) capital expenditures to the extent they are made with the proceeds of
capital contributions by the Sponsor or Affiliates of the Sponsor to any Loan
Party.
"Capital Stock" means, as to any Person, the equity interests in such
Person, including the shares of each class of capital stock in any Person that
is a corporation, each class of partnership interest (including general, limited
and preference units) in any Person that is a partnership, and each class of
member interest in any Person that is a limited liability company and any and
all warrants or options to purchase any of the foregoing.
"Cash Collateral Account" means an account established by the Company with
the Administrative Agent.
"Cash Equivalents" means (a) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed or insured by the United
States Government or any agency thereof, (b) certificates of deposit and
eurodollar time deposits with maturities of one year or less from the date of
acquisition and overnight bank deposits of any Lender or of any
4
<PAGE> 11
commercial bank having capital and surplus in excess of $500,000,000, (c)
repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than
ninety days with respect to securities issued or fully guaranteed or insured by
the United States Government, (d) commercial paper of a domestic issuer rated at
least A-2 by S&P or at least P-2 by Moody's, (e) securities with maturities of
one year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory,
the securities of which state, commonwealth, territory, political subdivision,
or taxing authority (as the case may be) are rated at least A by S&P or at least
A by Moody's, (f) securities with maturities of one year or less from the date
of acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this definition,
(g) shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition, (h) deposit accounts maintained in the ordinary course of business
with any Lender or any commercial bank of the type referred to in clause (b)
above or (i) in the case of any Foreign Subsidiary: (1) direct obligations of
the sovereign nation (or any agency thereof backed by the full faith and credit
of such sovereign nation) in which such Foreign Subsidiary is organized and is
conducting business or in obligations fully and unconditionally guaranteed by
such sovereign nation (or any agency thereof backed by the full faith and credit
of such sovereign nation), and (2) investments of the type and maturity
described in clauses (a) through (h) above of foreign obligors, which
investments or obligors have ratings described in such clauses or equivalent
ratings from comparable foreign rating agencies.
"Cash Interest Expense" means, for any period, Consolidated Interest
Expense for such period minus, to the extent included in determining such
Consolidated Interest Expense, non-cash interest expense.
"Casualty Event" means, with respect to any property of any Person, the
receipt by such Person of insurance proceeds, or proceeds of a condemnation
award or other compensation in connection with any loss of or damage to, or any
condemnation or other taking of, such property.
"Closing Date" means the date on which the conditions precedent set forth
in Section 5.1 shall be satisfied.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means all assets of the Loan Parties, now owned or hereinafter
acquired, upon which a Lien is purported to be created by any Security Document.
"Commitment Letter" means the commitment letter dated April 5, 1999, among
the Agents, BAS and the Sponsor.
"Commitments" means the collective reference to the Revolving Credit
Commitments and the Term Loan Commitments; individually, a "Commitment".
5
<PAGE> 12
"Commonly Controlled Entity" means an entity, whether or not incorporated,
which is under common control with the Company within the meaning of Section
4001 of ERISA or is part of a group which includes the Company and which is
treated as a single employer under Section 414 of the Code.
"Company" has the meaning specified in the preamble to this Agreement.
"Compliance Certificate" has the meaning specified in Section 7.2(b).
"Consolidated" means such term as it applies to the Company and its
Subsidiaries on a consolidated basis in accordance with GAAP, after eliminating
all intercompany items.
"Continue," "Continuation," and "Continued" refer to the continuation
pursuant to Section 4.4(b) of a Eurodollar Loan from one Interest Period to the
next Interest Period.
"Continuing Directors" has the meaning specified in Section 9(l).
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Convert," "Conversion," and "Converted" refer to a conversion pursuant to
Section 4.4(a), 4.9 or 4.11 of one Type of Loan into another Type of Loan.
"Default" means any of the events specified in Section 9, whether or not
any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Disqualified Stock" means any Capital Stock of the Company or any
Subsidiary which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event (a) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (b) is convertible or exchangeable for
Indebtedness or Disqualified Stock, or (c) is redeemable or subject to required
repurchase at the option of the holder thereof, in whole or in part, in each
case on or before the Tranche B Maturity Date.
"Dissenting Shares" has the meaning specified in the Recapitalization
Agreement on the date hereof.
"Dollars" and "$" means dollars in lawful currency of the United States of
America.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina are required or
authorized to close.
"Domestic Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "Domestic Lending Office" beneath its name on
Schedule 1.1 hereto or in the Assignment and Acceptance pursuant to which it
became a Lender, as the case may be, or such
6
<PAGE> 13
other office of such Lender as such Lender may from time to time specify to the
Company and the Administrative Agent.
"Domestic Subsidiary" means any Subsidiary of the Company organized under
the laws of any jurisdiction within the United States.
"EBITDA" means with respect to any period, the sum of, without duplication,
(a) Consolidated Net Income for such period plus, in each case to the extent
deducted in determining such Consolidated Net Income for such period, the sum of
the following (without duplication): (i) Consolidated Interest Expense, (ii)
Consolidated income tax expense of the Company and its Subsidiaries, (iii)
Consolidated depreciation and amortization expense of the Company and its
Subsidiaries, (iv) any other non-cash charges of the Company and its
Subsidiaries, (v) any Transaction Expenses, (vi) any reasonable expenses or fees
incurred by the Company and its Subsidiaries in connection with Permitted
Acquisitions, and (vii) any extraordinary losses of the Company and its
Subsidiaries, and minus, to the extent included in determining Consolidated Net
Income for such period, (a) any non-cash income or non-cash gains of the Company
and its Subsidiaries (other than accrual of revenue in the ordinary course of
business), and (b) any extraordinary gain or income of the Company and its
Subsidiaries, all as determined on a consolidated basis in accordance with GAAP;
provided, that in the event that the Company or any of its Subsidiaries makes a
Permitted Acquisition during such period, EBITDA for such period shall be
calculated on a pro forma basis, based on the results of the acquired Person as
if such Permitted Acquisition had occurred on the first day of such period.
"Eligible Assignee" means (a) a Lender, (b) an Affiliate or Related Fund of
a Lender, (c) a commercial bank organized under the laws of the United States,
or any state thereof, and having total assets in excess of $500,000,000, (d) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof, and having total assets in excess of
$500,000,000, (e) a commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development or has concluded special lending arrangements with the International
Monetary Fund associated with its General Arrangements to Borrow, or a political
subdivision of any such country, and having total assets in excess of
$500,000,000, so long as such bank is acting through a branch or agency located
in the United States, and (f) a finance company, insurance company, other
financial institution, fund (whether a corporation, partnership, trust or other
entity) or other entity that is an "accredited investor" (as defined in
Regulation D under the Securities Act), is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its business
and has total assets in excess of $250,000,000; provided, that any Eligible
Assignee (other than an Eligible Assignee of the type described in clause (a) or
(b) above) must be approved by (x) the Administrative Agent (and, with respect
to assignments of Revolving Credit Loans or Revolving Credit Commitments, the
Issuing Bank and the Swing Line Lender) (such approval, in each case, not to be
unreasonably withheld or delayed), and (y) if no Event of Default shall exist at
the time an assignment is effected pursuant to Section 11.6, the Company (such
approval not to be unreasonably withheld or delayed); provided, further, that
neither any Loan Party nor any Affiliate of a Loan Party or the Sponsor shall
qualify as an Eligible Assignee under this definition.
7
<PAGE> 14
"Eligible Hedge Agreement" means any Hedge Agreement entered into by the
Company or any Subsidiary with a Person that is a Lender (or an Affiliate of a
Lender) at the time of entering into such Hedge Agreement.
"Environmental Laws" means any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment, or of human
health or employee health and safety as they may be affected by the environment
or by Materials of Environmental Concern, as has been, is now, or may at any
time hereafter be, in effect.
"Equity Investors" has the meaning specified in the recitals to this
Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Base Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "Eurodollar Rate" shall mean, for any Eurodollar
Loan for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%). If the "Eurodollar Base Rate" cannot be determined
in accordance with the immediately preceding sentences with respect to any
Interest Period, the "Eurodollar Base Rate" with respect to each day during such
Interest Period shall be the rate per annum equal to the rate at which the
Administrative Agent (rounded upwards, if necessary, to the nearest 1/100 of 1%)
is offered Dollar deposits at or about 11:00 A.M. (London time) two Business
Days prior to the beginning of such Interest Period in the London interbank
market for delivery on the first day of such Interest Period for the number of
days comprised therein and in an amount comparable to the amount of its
Eurodollar Loan to be outstanding during such Interest Period.
"Eurodollar Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Eurodollar Lending Office" beneath its name on
Schedule 1.1 hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Company and the Administrative Agent.
"Eurodollar Loans" means Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
8
<PAGE> 15
"Eurodollar Rate" means with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward, if necessary, to the
nearest 1/100 of 1%):
Eurodollar Base Rate
--------------------------------------
1.00 - Eurodollar Reserve Requirements
"Eurodollar Reserve Requirements" means, at any time, the maximum rate at
which reserves (including any marginal, special, supplemental, or emergency
reserves) are required to be maintained under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any successor)
by member banks of the Federal Reserve System against "Eurocurrency liabilities"
(as such term is used in Regulation D of such Board). Without limiting the
effect of the foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks with respect to any
category of liabilities which includes deposits by reference to which the
Eurodollar Rate is to be determined. The Eurodollar Rate shall be adjusted
automatically on and as of the date of any change in the Eurodollar Reserve
Requirements.
"Event of Default" means any of the events specified in Section 9, provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Excess Cash Flow" means for any fiscal year of the Company:
(a) the sum of (i) Consolidated EBITDA for such fiscal year, plus (ii) any
decrease in the amount of Consolidated Working Capital at the end of such fiscal
year from the amount of Consolidated Working Capital at the end of the prior
fiscal year,
minus
(b) the sum of, without duplication, (i) to the extent deducted in
determining Consolidated Net Income of the Company for such fiscal year, the
aggregate amount of Cash Interest Expense for such fiscal year plus (ii)
scheduled principal amortization of the Term Loans during such fiscal year plus
(iii) any voluntary prepayments of the Term Loans made during such fiscal year
plus (iv) any principal payments of Revolving Credit Loans or Swing Line Loans
resulting in a permanent reduction of the Revolving Credit Commitments during
such fiscal year plus (v) any principal payments resulting in a permanent
reduction of Indebtedness (other than the Loans) of the Company and its
Subsidiaries during such fiscal year, plus (vi) the cash portion (other than
proceeds of the Loans) of any consideration paid by the Company or any
Subsidiary during such period with respect to Permitted Acquisitions, plus (vii)
the aggregate amount paid, or required to be paid, in cash in respect of taxes
during such fiscal year plus (viii) the aggregate amount of all Capital
Expenditures made by the Company and its Subsidiaries in cash during such fiscal
year (net of any proceeds of any related financing) plus (ix) any increases in
Working Capital during such fiscal year.
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"Existing Indebtedness" means the Indebtedness of the Company and its
Subsidiaries before giving effect to the Recapitalization.
"Facility" means each of (a) the Tranche A Term Loan Commitments and the
Tranche A Term Loans made thereunder, (b) the Tranche B Term Loan Commitments
and the Tranche B Term Loans made thereunder and (c) the Revolving Credit
Commitments and the extensions of revolving credit made thereunder.
"Federal Funds Effective Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
the Administrative Agent (in its individual capacity) on such day on such
transactions as determined by the Administrative Agent.
"Fee Letter" means the fee letter dated April 5, 1999, among the Sponsor,
BAS and the Agents.
"Fee Payment Date" means the last day of each February, May, August and
November.
"Financing Lease" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Fixed Charge Coverage Ratio" means, at any time, the ratio of (a)
Consolidated EBITDA for the four consecutive fiscal quarters of the Company then
most recently ended, minus Consolidated Capital Expenditures for such period to
(b) the sum of Consolidated Cash Interest Expense for such period plus scheduled
payments of principal of Indebtedness of the Company and its Subsidiaries for
such period (or, if less than four fiscal quarters of the Company have ended
after the Closing Date, Consolidated Interest Expense and the scheduled payments
of principal of Indebtedness for all such fiscal quarters shall be multiplied by
a fraction, the numerator of which shall be four and the denominator of which
shall be such number of ended fiscal quarters).
"Foreign Currency Protection Agreements" means, as to any Person, all
foreign exchange contracts, currency swap agreements or other similar agreements
or arrangements designed to protect such Person against fluctuations in currency
values.
"Foreign Subsidiary" means any Subsidiary of the Company organized under
the laws of any jurisdiction outside the United States of America.
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<PAGE> 17
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, subject to Section 1.3.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantee" means (a) the Guarantee and Collateral Agreement or (b) any
other guarantee delivered to the Administrative Agent guaranteeing the
Obligations or any part thereof.
"Guarantee and Collateral Agreement" means the Guarantee and Collateral
Agreement to be executed and delivered by the Company and each of the Domestic
Subsidiaries, substantially in the form of Exhibit D.
"Guarantee Obligation" means as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including
any bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness (the "primary obligations") of any other third Person (the "primary
obligor") in any manner, whether directly or indirectly, including any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) 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 (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (x) an amount equal to the stated or determinable principal amount of the
primary obligation in respect of which such Guarantee Obligation is made and (y)
the maximum amount for which such guaranteeing person may be liable pursuant to
the terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the guaranteeing
person in good faith.
"Guarantor" means any Person delivering a Guarantee pursuant to this
Agreement.
"Hedge Agreement" means any Interest Rate Protection Agreement or Foreign
Currency Protection Agreement.
"Indebtedness" means, with respect to any Person, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds,
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<PAGE> 18
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
or assets purchased by such Person, (d) all obligations of such Person for the
deferred purchase price of property or services (excluding trade accounts
payable not more than ninety days past due incurred in the ordinary course of
business), (e) all obligations of such Person secured by any Lien on any
property or asset owned by such Person, whether or not the obligations of such
Person secured thereby shall have been assumed, (f) all obligations of such
Person under Financing Leases, (g) all obligations of such Person in respect of
letters of credit, bankers' acceptances and similar instruments, (h) the net
obligations of such Person under Hedge Agreements, (i) any "withdrawal
liability" of such Person as such term is defined under Part I of Subtitle E of
Title IV of ERISA, (j) the principal portion of all obligations of such Person
under any Synthetic Lease, (k) all Guarantee Obligations of such Person, and (l)
all Disqualified Stock of such Person. The Indebtedness of any Person shall
include the Indebtedness of any partnership or unincorporated joint venture in
which such Person is a general partner or joint venturer, except to the extent
that the terms of such Indebtedness provide that such Person is not liable
therefor.
"Indemnified Party" has the meaning specified in Section 11.5.
"Information Memorandum" means the Confidential Offering Memorandum dated
May 1999, used by the Administrative Agent in connection with the syndication of
the Commitments.
"Initial Mortgaged Real Property" means the real property described in
Schedule 6.9, other than real property leased by the Company or any Subsidiary
and the real property of the Company located in Brampton, Ontario, and Norcross,
Georgia.
"Insolvency" means, with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent" means a condition of Insolvency.
"Intellectual Property" has the meaning specified in Section 6.10.
"Interest Coverage Ratio" means, at any time, the ratio of (a) Consolidated
EBITDA for the four consecutive fiscal quarters of the Company then most
recently ended to (b) Consolidated Interest Expense for such period (or, if less
than four fiscal quarters of the Company have ended after the Closing Date,
Consolidated Interest Expense for all such fiscal quarters shall be multiplied
by a fraction, the numerator of which shall be four and the denominator of which
shall be such number of ended fiscal quarters).
"Interest Expense" means the amount of interest expense, both expensed and
capitalized, of the Company and its Consolidated Subsidiaries determined on a
consolidated basis in accordance with GAAP for such period, plus, without
duplication, that portion of payments under Financing Leases of the Company and
its Consolidated Subsidiaries attributable to interest expense of the Company
and its Consolidated Subsidiaries for such period in accordance with GAAP.
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<PAGE> 19
"Interest Payment Date" means (a) as to any Base Rate Loan, the last day of
each February, May, August and November, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest Period,
and (c) as to any Eurodollar Loan having an Interest Period longer than three
months, each day which is three months, or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest Period.
"Interest Period" means with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or Conversion date,
as the case may be, with respect to such Eurodollar Loan and ending one, two,
three or six months thereafter, as selected by the Company in its Notice of
Borrowing or Notice of Conversion/Continuation, as the case may be, given with
respect thereto; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and ending one,
two, three or six months thereafter, as selected by the Company by irrevocable
notice to the Administrative Agent not less than three Business Days prior to
the last day of the then current Interest Period with respect thereto; provided
that, the foregoing provisions relating to Interest Periods are subject to the
following:
(i) if any Interest Period pertaining to a Eurodollar Loan would otherwise
end on a day that is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period pertaining to a Eurodollar Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iii) the Company shall select Interest Periods so as not to require a
payment or prepayment of any Eurodollar Loan during an Interest Period for such
Loan.
"Interest Rate Protection Agreement" means any interest rate protection
agreement, interest rate future, interest rate option, interest rate cap or
collar or other interest rate hedge arrangement, to or under which the Company
or any of its Subsidiaries is a party or a beneficiary.
"Investments" has the meaning specified in Section 8.8.
"Issuing Bank" means NationsBank, in its capacity as the issuer of any
Letter of Credit.
"Jupiter" has the meaning specified in the recitals to this Agreement.
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<PAGE> 20
"L/C Obligations" means, at any time, the sum of (a) the aggregate amount
then available to be drawn under all outstanding Letters of Credit and (b) the
aggregate amount of Reimbursement Obligations in respect of Letters of Credit
which have not then been reimbursed by the Company pursuant to Section 2.8.
"L/C Participants" means the collective reference to all the Revolving
Credit Lenders other than the Issuing Bank.
"L/C Sublimit" means, at any time, the lesser of (a) $5,000,000 and (b) the
Revolving Credit Commitments then in effect.
"Landlord Waiver" means a Landlord Waiver substantially in the form of
Exhibit J.
"Lenders" has the meaning specified in the preamble to this Agreement and
includes the Issuing Bank and the Swing Line Lender and each Person that becomes
a Lender pursuant to Section 11.6.
"Lending Party" has the meaning specified in Section 11.15.
"Letter of Credit Application" means an application in such form as the
Issuing Bank may specify from time to time, requesting the Issuing Bank to issue
a Letter of Credit.
"Letters of Credit" has the meaning specified in Section 2.4(a).
"Leverage Ratio" means, at any time, the ratio of (a) Total Debt at such
time to (b) Consolidated EBITDA for the most recent period of four consecutive
fiscal quarters of the Company.
"Leverage Ratio Level" means, as to the Company, the existence of Leverage
Ratio Level I, Leverage Ratio Level II, Leverage Ratio Level III, or Leverage
Ratio Level IV, as the case may be.
"Leverage Ratio Level I" shall exist on an Adjustment Date if the Leverage
Ratio for the period of four consecutive fiscal quarters of the Company ending
on the last day of the period covered by the financial statements relating to
such Adjustment Date is greater than or equal to 4.00 to 1.00.
"Leverage Ratio Level II" shall exist on an Adjustment Date if the Leverage
Ratio for the period of four consecutive fiscal quarters of the Company ending
on the last day of the period covered by the financial statements relating to
such Adjustment Date is less than 4.00 to 1.00 but greater than or equal to 3.50
to 1.00.
"Leverage Ratio Level III" shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive fiscal quarters of the Company
ending on the last day of the period covered by the financial statements
relating to such Adjustment Date is less than 3.50 to 1.00 but greater than or
equal to 2.75 to 1.00.
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"Leverage Ratio Level IV" shall exist on an Adjustment Date if the Leverage
Ratio for the period of four consecutive fiscal quarters of the Company ending
on the last day of the period covered by the financial statements relating to
such Adjustment Date is less than 2.75 to 1.00.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing).
"Loan" means any loan made by any Lender or the Swing Line Lender pursuant
to this Agreement.
"Loan Documents" means this Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, the Fee Letter and the Security Documents.
"Loan Parties" means the Company and each Subsidiary of the Company which
is a party to a Loan Document; individually, a "Loan Party".
"Management Agreement" means the Management Services Agreement dated June
30, 1999, between the Company and Fremont Partners, L.L.C., a Delaware limited
liability company.
"Material Adverse Effect" means any act, circumstance or event that (a)
could have a material adverse effect on the Recapitalization, (b) could be
material and adverse to the business, operations, property, condition (financial
or otherwise) or prospects of the Company and its Subsidiaries taken as a whole
or (c) in any manner whatsoever could materially and adversely affect (i) the
validity or enforceability of this Agreement or any of the other Loan Documents
or (ii) the rights, remedies, powers or privileges of the Administrative Agent
or the Lenders under this Agreement or under any of the other Loan Documents.
"Material Contract" means, with respect to the Company or any Subsidiary,
each contract to which such Person is a party that under applicable Requirements
of Law (including the rules, regulations and interpretations of the Securities
and Exchange Commission) is required to be disclosed to the public.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil) or petroleum products or any hazardous or toxic
substances, materials or wastes, defined, listed, classified or regulated as
such in or under any Environmental Law, including asbestos, petroleum or
petroleum products and polychlorinated biphenyls.
"Material Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
"Merger" has the meaning specified in the recitals to this Agreement.
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<PAGE> 22
"Merger Consideration" has the meaning specified in the Recapitalization
Agreement on the date hereof.
"Moody's" means Moody's Investors Service, Inc.
"Mortgages" means the collective reference to the mortgages, deeds of trust
and other similar documents executed and delivered from time to time by the
Company and the Domestic Subsidiaries in favor of the Administrative Agent,
substantially in the form of Exhibit E or, if such Exhibit is not appropriate
under applicable law in the jurisdiction in which the relevant real property is
located, in such other form as shall be reasonably satisfactory to the
Administrative Agent.
"Multiemployer Plan" means a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means (a) with respect to any sale or other disposition
of assets by the Company or any of its Subsidiaries, the net amount equal to the
aggregate amount received in cash (including Cash Equivalents and any cash
payments received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or the subsequent
sale or disposition of any non-cash consideration or Investments received in
connection therewith or otherwise, but only as and when received) minus the sum
of (i) the reasonable fees, commissions and other out-of-pocket expenses
incurred by the Company or such Subsidiary in connection with such sale or other
disposition, (ii) federal, state and local taxes incurred in connection with
such sale or other disposition, (iii) purchase price adjustments reasonably
expected to be payable by such Loan Party in connection therewith (it being
understood that if such amount is not subsequently paid, such amount shall
constitute "Net Cash Proceeds" at the time such payment is no longer required)
and (iv) in the case of any such sale or other disposition of assets subject to
a Lien securing any Indebtedness (which Lien and Indebtedness are permitted by
this Agreement), any amounts required to be repaid by the Company or such
Subsidiary in respect of such Indebtedness (other than Indebtedness under this
Agreement) in connection with such sale or other disposition;
(b) with respect to any issuance of any Indebtedness or Capital Stock by
the Company or any of its Subsidiaries or any capital contribution made to the
Company or any of its Subsidiaries, the net amount equal to the aggregate amount
received in cash (including Cash Equivalents and any cash payments received by
way of deferred payment of principal pursuant to a note or installment
receivable or purchase price adjustment receivable or the subsequent sale or
disposition of any non-cash consideration or Investments received in connection
therewith or otherwise, but only as and when received) in connection with such
issuance or capital contribution minus the reasonable fees, discounts,
commissions and other out-of-pocket expenses incurred by the Company and its
Subsidiaries in connection with such issuance or capital contribution; and
(c) with respect to proceeds received by the Company or any of its
Subsidiaries in respect of a Casualty Event, the amount of such proceeds minus
(i) the reasonable out-of-pocket fees and expenses incurred by the Company and
its Subsidiaries in connection with the collection
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<PAGE> 23
of such proceeds, (ii) any such proceeds received in respect of insurance which
are required to be paid to any co-insured Persons or other loss payees with
respect to such insurance, and (iii) in the case of any Casualty Event relating
to any asset subject to a Lien securing any Indebtedness (which Lien and
Indebtedness are permitted by this Agreement), any amounts required to be repaid
by the Company or such Subsidiary in respect of such Indebtedness (other than
Indebtedness under this Agreement) in connection with such Casualty Event.
"Net Income" means, of the Company for any period, the net income of the
Company and its Consolidated Subsidiaries, determined on a consolidated basis in
accordance with GAAP for such period.
"Notes" means the collective reference to the Revolving Credit Notes, the
Term Notes and the Swing Line Note.
"Notice of Borrowing" means a notice in substantially the form of Exhibit
A.
"Notice of Conversion/Continuation" means a notice in substantially the
form of Exhibit C.
"Obligations" means the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Company or any Subsidiary whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans, Reimbursement
Obligations and all other obligations and liabilities of the Company and the
Subsidiaries to the Agents, the Lenders or the Issuing Bank or to any Lender (or
to any Affiliate of a Lender) which enters into any Eligible Hedge Agreement
with the Company or any Subsidiary, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, any other Loan
Document, any Letters of Credit, any Eligible Hedge Agreement, or any other
document made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including all reasonable fees, charges and disbursements of
counsel to the Agents, the Issuing Bank or any Lender that are required to be
paid by the Company or any Subsidiary pursuant to any Loan Document or Eligible
Hedge Agreement) or otherwise.
"Other Taxes" has the meaning specified in Section 4.13(b).
"Participant" has the meaning specified in Section 11.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permitted Acquisition" means any Acquisition, provided that (a) the
Company shall have delivered to the Administrative Agent a certificate
demonstrating that, upon giving pro forma effect to such Acquisition and any
Indebtedness incurred in connection therewith, no
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<PAGE> 24
violation of Section 8.1 would have occurred as of the most recent fiscal
quarter end preceding the date of such Acquisition with respect to which the
Agent has received the financial statements and Compliance Certificate as
required by Section 7.1(a) or (b) and Section 7.2(c) (assuming, for purposes
hereof, that such Acquisition was consummated as of the first day of the four
fiscal-quarter period ending as of such fiscal quarter end), (b) such
Acquisition is approved by the Board of Directors (or other body of such Person
vested with management authority or a majority of holders of the Capital Stock
of such Person) of the Person whose assets or Capital Stock are being acquired
pursuant to such Acquisition, (c) no Default or Event of Default has then
occurred and is continuing or would result therefrom, (d) the purchase price
(including assumed indebtedness and the fair market value of any non-cash
consideration in connection with such Acquisition) of such Acquisition does not
exceed $30,000,000 individually and the purchase price of all such Acquisitions
since the Closing Date does not exceed $60,000,000 in the aggregate, and (e) the
Available Cash in effect at the time of such Acquisition (and after giving
effect thereto) is at least $2,500,000.
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan" means, at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Company or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Preferred Shares" has the meaning specified in the recitals to this
Agreement.
"Prime Rate" means the per annum rate of interest established from time to
time by NationsBank as its prime rate, which rate may not be the lowest rate of
interest charged by NationsBank to its customers.
"Projections" has the meaning specified in Section 6.20.
"Properties" has the meaning specified in Section 6.18(a).
"Recapitalization" has the meaning specified in the recitals to this
Agreement.
"Recapitalization Agreement" has the meaning specified in the recitals to
this Agreement.
"Recapitalization Documents" has the meaning specified in Section 5.1(c).
"Register" has the meaning specified in Section 11.6(d).
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System as in effect from time to time.
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<PAGE> 25
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Reimbursement Obligations" means the obligation of the Company to
reimburse the Issuing Bank pursuant to Section 2.8 for amounts drawn under
Letters of Credit.
"Related Fund" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Reorganization" means with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section
2615.
"Required Lenders" means, at any time, Lenders the Total Credit Percentages
of which aggregate at least 51%.
"Required Revolving Credit Lenders" means, at any time, Revolving Credit
Lenders the Revolving Credit Commitment Percentages of which aggregate at least
51%.
"Required Tranche A Lenders" means, at any time, Tranche A Lenders the
Tranche A Commitment Percentages of which aggregate at least 51%.
"Required Tranche B Lenders" means, at any time, Tranche B Lenders the
Tranche B Commitment Percentages of which aggregate at least 51%.
"Requirement of Law" means, as to any Person, the 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.
"Responsible Officer" means the chief executive officer or the president of
the Company or, with respect to financial matters, the chief financial officer
of the Company.
"Revolving Credit Commitment" means, as to any Lender, the obligation of
such Lender to (a) make Revolving Credit Loans, (b) issue or participate in
Letters of Credit, and (c) make or participate in Swing Line Loans, in an
aggregate principal and/or face amount at any one time outstanding not to exceed
the amount set forth opposite such Lender's name in Schedule 1.1 under the
heading "Revolving Credit Commitment" (in each case as such amount may be
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adjusted from time to time as provided herein); collectively, as to all such
Lenders, the "Revolving Credit Commitments".
"Revolving Credit Commitment Percentage" means as to any Revolving Credit
Lender:
(a) at any time prior to the termination of the Revolving Credit
Commitments, the percentage which (i) such Revolving Credit Lender's Revolving
Credit Commitment then constitutes of (ii) the Revolving Credit Commitments of
all the Lenders, and
(b) at any time after the termination of the Revolving Credit Commitments,
the percentage which (i) the aggregate principal amount of such Revolving Credit
Lender's Revolving Credit Loans then outstanding plus the product of (A) such
Revolving Credit Lender's Revolving Credit Commitment Percentage immediately
prior to the termination of the Revolving Credit Commitments (giving effect to
any permitted assignments after such termination) times (B) the sum of (1) the
L/C Obligations, and (2) the aggregate principal amount of Swing Line Loans then
outstanding then constitutes of (ii) the sum of (A) the aggregate principal
amount of Revolving Credit Loans of all the Revolving Credit Lenders then
outstanding plus (B) the aggregate L/C Obligations of all the Revolving Credit
Lenders then outstanding plus (C) the aggregate principal amount of Swing Line
Loans then outstanding.
"Revolving Credit Commitment Period" means the period from and including
the date hereof to but not including the Revolving Credit Termination Date.
"Revolving Credit Lender" means any Lender having a Revolving Credit
Commitment or that holds outstanding Revolving Credit Loans hereunder.
"Revolving Credit Loans" has the meaning specified in Section 2.1(a).
"Revolving Credit Note" has the meaning specified in Section 4.1(d).
"Revolving Credit Termination Date" means the earlier of (a) November 30,
2005 and (b) the date upon which the Revolving Credit Commitments shall be
terminated pursuant to this Agreement.
"S&P" means Standard and Poor's Rating Group.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Security Documents" means the collective reference to the Mortgages, the
Guarantee and Collateral Agreement and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any asset or assets of
any Person to secure the obligations and liabilities of the Company and its
Subsidiaries hereunder and under any of the other Loan Documents or to secure
any guarantee of any such obligations and liabilities, including any security
document delivered pursuant to Section 7.10.
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"Senior Subordinated Note Indenture" means the Indenture dated as of
June 30, 1999, between the Company and Firstar Bank of Minnesota, N.A., as
trustee.
"Senior Subordinated Notes" means the subordinated notes of the Company in
an aggregate principal amount of $125,000,000 issued pursuant to the Senior
Subordinated Note Indenture.
"Shares" has the meaning specified in the Recapitalization Agreement on the
date hereof.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent" means, with respect to any Person on a particular date, the
condition that on such date, (a) the fair value of the property of such Person
is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature, and (d) such Person is not engaged in any business or a
transaction, and is not about to engage in any business or a transaction, for
which such Person's property would constitute an unreasonably small amount of
capital. Contingent liabilities shall be computed as the amount which, in light
of the relevant facts and circumstances, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Sponsor" has the meaning specified in the recitals to this Agreement.
"Subordinated Debt" means (a) the Senior Subordinated Notes and (b) any
other unsecured Indebtedness of the Company (i) no part of the principal of
which is required to be paid (whether by way of mandatory sinking fund,
mandatory redemption, mandatory prepayment or otherwise) prior to the Business
Day following the Tranche B Maturity Date, except in connection with asset
sales, changes of control and events of default on terms (w) no more restrictive
(taken as a whole) than those provisions contained in the Senior Subordinated
Note Indenture, and (x) not materially less favorable to the Lenders than those
provisions contained in the Senior Subordinated Note Indenture, (ii) the payment
of the principal of and interest on which and other obligations of the Company
in respect thereof are subordinated to the prior payment in full of the
Obligations on terms and conditions at least as favorable to the Agents and the
Lenders as those applicable to the Senior Subordinated Notes, and (iii) the
Subordinated Debt Documentation with respect to such Indebtedness shall not
contain covenants or default provisions (y) more restrictive (taken as a whole)
than those contained in the Senior Subordinated Note Indenture, and (z) not
materially less favorable to the Lenders than those contained in the Senior
Subordinated Note Indenture.
"Subordinated Debt Documentation" means the agreements, indentures and
other documentation pursuant to which any Subordinated Debt is issued.
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"Subsidiary" means, as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Company.
"Surviving Indebtedness" means Indebtedness of the Company and its
Subsidiaries outstanding immediately before and after giving effect to the
Recapitalization.
"Swing Line Commitment" means, at any time, the obligation of the Swing
Line Lender to make Swing Line Loans pursuant to Section 2.12.
"Swing Line Lender" means NationsBank, in its capacity as provider of the
Swing Line Loans.
"Swing Line Loans" has the meaning specified in Section 2.12.
"Swing Line Note" has the meaning specified in Section 4.1(d).
"Syndication Agent" means Credit Suisse, which has been named syndication
agent for the Lenders.
"Synthetic Lease" means any synthetic lease, tax retention operating lease
or off-balance sheet financing product where such transaction is considered
borrowed money indebtedness for tax purposes but which is classified as an
operating lease pursuant to GAAP.
"Taxes" has the meaning specified in Section 4.13(a).
"Term Loan Commitments" means the collective reference to the Tranche A
Commitments and the Tranche B Commitments.
"Term Loan Lenders" means the collective reference to the Tranche A Lenders
and the Tranche B Lenders.
"Term Loans" means, collectively, the Tranche A Term Loans and the Tranche
B Term Loans; and individually, a "Term Loan".
"Term Notes" has the meaning specified in Section 4.1(d).
"Title Insurance Company" has the meaning specified in Section 5.1(t).
"Total Credit Percentage" means as to any Lender at any time, the
percentage of the aggregate Revolving Credit Commitments, aggregate Tranche A
Commitments and aggregate
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Tranche B Commitments then constituted by its Revolving Credit Commitment,
Tranche A Commitment and Tranche B Commitment (it being agreed that upon
termination or expiration of the Revolving Credit Commitments, the Tranche A
Commitments or the Tranche B Commitments, the Total Credit Percentage of any
Lender shall be determined:
(a) in the case of the termination or expiration of the Revolving Credit
Commitments, by reference to the aggregate amount of the Aggregate Outstanding
Revolving Credit of the Lenders and such Lender's Aggregate Outstanding
Revolving Credit; and
(b) in the case of the termination or expiration of the Tranche A
Commitment or the Tranche B Commitment, by reference to the aggregate principal
amount of the Tranche A Term Loans and the Tranche B Term Loans of the Lenders,
as the case may be, and such Lender's Tranche A Term Loans or Tranche B Term
Loans, as the case may be).
"Total Debt" means, on any date, all items that in accordance with GAAP,
would be classified as indebtedness on a Consolidated balance sheet of the
Company and its Subsidiaries.
"Tranche" means the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have been
made on the same day); Tranches may be identified as "Eurodollar Tranches."
"Tranche A Commitment" means, as to any Lender, the obligation of such
Lender to make a Tranche A Term Loan to the Company pursuant to Section 3.1 in
an amount equal to the amount set forth opposite such Lender's name in Schedule
1.1 under the heading "Tranche A Commitment"; collectively, as to all such
Lenders, the "Tranche A Commitments".
"Tranche A Commitment Percentage" means, as to any Tranche A Lender, the
percentage which such Tranche A Lender's Tranche A Commitment then constitutes
of the Tranche A Commitments of all the Tranche A Lenders (or, after the Tranche
A Term Loans are made, the percentage which the outstanding principal amount of
such Tranche A Lender's Tranche A Term Loan then constitutes of the aggregate
principal amount of Tranche A Term Loans of all the Tranche A Lenders then
outstanding).
"Tranche A Lender" means any Lender having a Tranche A Commitment hereunder
or that holds outstanding Tranche A Term Loans.
"Tranche A Term Loan" has the meaning specified in Section 3.1.
"Tranche A Term Note" has the meaning specified in Section 4.1(d).
"Tranche B Commitment" means, as to any Lender, the obligation of such
Lender to make a Tranche B Term Loan to the Company pursuant to Section 3.1 in
an amount equal to the
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amount set forth opposite such Lender's name in Schedule 1.1 under the heading
"Tranche B Commitment"; collectively, as to all such Lenders, the "Tranche B
Commitments".
"Tranche B Commitment Percentage" means as to any Tranche B Lender, the
percentage which such Tranche B Lender's Tranche B Commitment then constitutes
of the Tranche B Commitments of all the Tranche B Lenders (or, after the Tranche
B Term Loans are made, the percentage which the outstanding principal amount of
such Tranche B Lender's Tranche B Term Loan then constitutes of the aggregate
principal amount of Tranche B Term Loans of all the Tranche B Lenders then
outstanding).
"Tranche B Lender" means any Lender having a Tranche B Commitment hereunder
or that holds outstanding Tranche B Term Loans.
"Tranche B Maturity Date" means November 30, 2006.
"Tranche B Term Loan" has the meaning specified in Section 3.1.
"Tranche B Term Note" has the meaning specified in Section 4.1(d).
"Transaction Expenses" has the meaning specified in Section 5.1(g).
"Transferee" has the meaning specified in Section 11.6(f).
"Type" means as to any Loan, its nature as a Base Rate Loan or a Eurodollar
Loan.
"Uniform Customs" means the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.
"Working Capital" means, at any date, the sum of (a) all amounts which
would, in conformity with GAAP, be included under current assets on a balance
sheet of the Company and its Subsidiaries on a Consolidated basis on such date
minus (b) all amounts which would, in conformity with GAAP, be included under
current liabilities on a balance sheet of the Company and its Subsidiaries on a
Consolidated basis on such date.
"Year 2000 Compliant" has the meaning specified in Section 6.25.
"Year 2000 Problem" has the meaning specified in Section 6.25.
1.2 Other Definitional Provisions. (a) Unless otherwise specified therein,
all terms defined in this Agreement shall have the defined meanings when used in
any Notes, any other Loan Documents or any certificate or other document made or
delivered pursuant hereto.
(b) For purposes of computation of time periods hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding". The words
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"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation".
(c) Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented, renewed, extended or otherwise modified
(subject to any restrictions on such amendments, supplements, renewals,
extensions or modifications set forth herein), (ii) any reference herein to any
Person shall be construed to include such Person's successors and assigns, (iii)
the words "herein", "hereof" and "hereunder", and words of similar import, shall
be construed to refer to this Agreement in its entirety and not to any
particular provision of this Agreement, (iv) all references herein to Sections,
Exhibits and Schedules shall be construed to refer to Sections of, and Exhibits
and Schedules to, this Agreement and (v) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts receivable, contract rights, licenses and intellectual property.
(d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
1.3 Accounting Terms. Except as otherwise expressly provided herein, all
accounting terms used in this Agreement and the other Loan Documents shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Lenders hereunder shall be
prepared, in accordance with GAAP applied on a consistent basis. All
calculations made for the purposes of determining compliance with this Agreement
shall (except as otherwise expressly provided herein) be made by application of
GAAP on a basis consistent with the most recent annual or quarterly financial
statements delivered pursuant to Section 7.1 (or, prior to the delivery of the
first financial statements pursuant to Section 7.1, consistent with the audited
financial statements described in Section 6.1(a)); provided, however, that if
(a) the Company shall object to determining such compliance on such basis at the
time of delivery of such financial statements due to any change in GAAP or the
rules promulgated with respect thereto, or (b) the Administrative Agent or the
Required Lenders shall so object in writing within ninety days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Company to
the Lenders as to which no such objection shall have been made.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and conditions
hereof, each Revolving Credit Lender severally agrees to make revolving credit
loans (each a "Revolving Credit Loan") to the Company from time to time during
the Revolving Credit Commitment Period in an aggregate principal amount at any
one time outstanding which, when added to such Revolving Credit Lender's
Revolving Credit Commitment Percentage of the sum of (i) the then outstanding
L/C Obligations and (ii) the aggregate principal amount of Swing Line Loans then
outstanding, does not exceed the amount of such Revolving Credit Lender's
Revolving Credit Commitment. During the Revolving Credit Commitment Period, the
Company
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may use the Revolving Credit Commitments by borrowing, prepaying and reborrowing
the Revolving Credit Loans in whole or in part, all in accordance with the terms
and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i) Eurodollar
Loans, (ii) Base Rate Loans, or (iii) a combination thereof, as determined by
the Company and notified to the Administrative Agent in accordance with Sections
2.2 and 4.4, provided that no Revolving Credit Loan shall be made as a
Eurodollar Loan after the day that is one month prior to the Revolving Credit
Termination Date.
2.2 Procedure for Revolving Credit Borrowing. The Company may borrow under
the Revolving Credit Commitments during the Revolving Credit Commitment Period
on any Business Day, provided that the Company shall give the Administrative
Agent irrevocable notice in the form of a Notice of Borrowing (which notice must
be received by the Administrative Agent prior to 11:00 A.M. (Charlotte, North
Carolina time), (a) at least three Business Days prior to the requested
Borrowing Date, if all or any part of the requested Revolving Credit Loans are
to be initially Eurodollar Loans, or (b) at least one Business Day prior to the
requested Borrowing Date, otherwise; provided that such notice may be given
prior to 11:00 A.M. (Charlotte, North Carolina time) on the Closing Date with
respect to Revolving Credit Loans to be made on the Closing Date), specifying
(i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether
the borrowing is to be of Eurodollar Loans, Base Rate Loans or a combination
thereof and (iv) if the borrowing is to be entirely or partly of Eurodollar
Loans, the respective amounts of each such Type of Loan and the respective
lengths of the initial Interest Periods therefor. Revolving Credit Loans made on
the Closing Date shall be Base Rate Loans, provided that such Loans may be
Converted to Eurodollar Loans pursuant to Section 4.4 after the Closing Date.
Each borrowing under the Revolving Credit Commitments shall be in an amount
equal to (x) in the case of Base Rate Loans, $1,000,000 or a whole multiple of
$500,000 in excess thereof (or, if the then Available Revolving Credit
Commitments are less than $1,000,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $1,000,000 or a whole multiple of $1,000,000 in excess
thereof. Upon receipt of any such notice from the Company, the Administrative
Agent shall promptly notify each Revolving Credit Lender thereof. Each Revolving
Credit Lender will make the amount of its pro rata share of each borrowing
available to the Administrative Agent for the account of the Company at the
office of the Administrative Agent specified in Section 11.2 prior to 1:00 P.M.,
(Charlotte, North Carolina time), on the Borrowing Date requested by the Company
in funds immediately available to the Administrative Agent in Dollars. Such
borrowing will then be made available to the Company by the Administrative Agent
crediting the account of the Company on the books of such office (or such other
account as may be designated by the Company and as may be acceptable to the
Administrative Agent) with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
2.3 Termination or Reduction of Commitments; Repayment of Revolving Credit
Loans. (a) The Company shall have the right, upon not less than three Business
Days' notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the amount of the Revolving Credit
Commitments, provided that no such termination or reduction shall be permitted
if, after giving effect thereto and to any prepayments of Loans
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made on the effective date thereof, the Aggregate Outstanding Revolving Credit
of all the Revolving Credit Lenders would exceed the Revolving Credit
Commitments then in effect. Any such reduction shall be in an amount equal to
$1,000,000 or a whole multiple of $500,000 in excess thereof and shall reduce
permanently the Revolving Credit Commitments then in effect.
(b) The Revolving Credit Commitments shall also be automatically reduced as
provided in Section 4.3. Any such reduction shall ratably and permanently reduce
the Revolving Credit Commitments then in effect.
(c) The Company hereby unconditionally promises to pay to the
Administrative Agent on the Revolving Credit Termination Date (or such earlier
date on which the Revolving Credit Loans become due and payable pursuant to
Section 9) for the account of each Revolving Credit Lender the then unpaid
principal amount of each Revolving Credit Loan of such Revolving Credit Lender.
The Company hereby further agrees to pay interest on the unpaid principal amount
of the Revolving Credit Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Sections 4.6 and 4.10.
2.4 L/C Commitment. (a) Subject to the terms and conditions hereof, the
Issuing Bank, in reliance on the agreements of the other Revolving Credit
Lenders set forth in Section 2.7(a), agrees to issue letters of credit ("Letters
of Credit") for the account of the Company on any Business Day during the
Revolving Credit Commitment Period in such form as may be approved from time to
time by the Issuing Bank, provided that the Issuing Bank shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Sublimit or (ii) the
Aggregate Outstanding Revolving Credit of all the Revolving Credit Lenders at
such time would exceed the Revolving Credit Commitments at such time.
(b) Each Letter of Credit shall (i) be denominated in Dollars, (ii) be
either (A) a standby letter of credit issued to support obligations of the
Company or any of its Subsidiaries, contingent or otherwise or (B) a commercial
letter of credit issued in respect of the purchase of goods or services by the
Company or any of its Subsidiaries in the ordinary course of business and (iii)
expire no later than the earlier of (A) the date that is twelve months after the
date of its issuance and (B) the thirtieth Business Day prior to the Revolving
Credit Termination Date, provided that, subject to the immediately preceding
clause (B), any standby Letter of Credit may, at the request of the Company as
set forth in the applicable Letter of Credit Application, be automatically
extended on each anniversary of the issuance thereof for an additional period of
one year unless the Issuing Bank shall have given prior written notice to the
Company and the beneficiary of such Letter of Credit at least thirty Business
Days prior to the date of termination of such Letter of Credit that such Letter
of Credit will not be extended and the Issuing Bank shall permit such
beneficiary, upon receipt of such notice, to draw under such Letter of Credit
prior to the date such Letter of Credit otherwise would have been automatically
renewed. The extension or renewal of any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new Letter of
Credit hereunder.
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(c) Each Letter of Credit shall be subject to the Uniform Customs and, to
the extent not inconsistent therewith, the laws of the State of New York.
(d) The Issuing Bank shall not at any time be obligated to issue any Letter
of Credit hereunder if such issuance would conflict with, or cause the Issuing
Bank or any L/C Participant to exceed any limits imposed by any applicable
Requirement of Law.
2.5 Procedure for Issuance of Letters of Credit. The Company may from time
to time request that the Issuing Bank issue a Letter of Credit by (a) delivering
to the Issuing Bank at its address for notices specified herein in such manner
as may be agreed by or be acceptable to the Issuing Bank (including by
electronic transmission) a Letter of Credit Application, completed to the
satisfaction of the Issuing Bank, and such other certificates, documents and
other papers and information as the Issuing Bank may request and (b)
concurrently delivering a notice to the Administrative Agent that such Letter of
Credit has been requested if the Administrative Agent is different from the
Issuing Bank. Upon receipt of any such Letter of Credit Application, the Issuing
Bank will process such Letter of Credit Application and the certificates,
documents and other papers and information delivered to it in connection
therewith in accordance with its customary procedures and shall promptly issue
the Letter of Credit requested thereby (but in no event shall the Issuing Bank
be required to issue any Letter of Credit earlier than three Business Days after
its receipt of the Letter of Credit Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Bank and the Company with respect
thereto. The Issuing Bank shall furnish a copy of each Letter of Credit issued
by the Issuing Bank to the Company and the Administrative Agent promptly
following the issuance thereof.
2.6 Letter of Credit Fees, Commissions and Other Charges. (a) The Company
shall pay to the Issuing Bank with respect to each Letter of Credit issued by it
under this Agreement, for the account of the Issuing Bank, a fronting fee with
respect to the period from the date of issuance of such Letter of Credit to the
expiration or termination date of such Letter of Credit, computed at a rate of
0.250% per annum on the average aggregate amount available to be drawn under
such Letter of Credit during the period for which such fee is calculated. Such
fronting fee shall be payable in arrears on each Fee Payment Date to occur after
the issuance of such Letter of Credit and on the Revolving Credit Termination
Date (or on such earlier date as the Revolving Credit Commitments shall
terminate as provided herein) and shall be nonrefundable.
(b) The Company shall pay to the Administrative Agent, for the account of
the L/C Participants, a letter of credit commission with respect to each Letter
of Credit issued under this Agreement with respect to the period from the date
of issuance of such Letter of Credit to the expiration or termination date of
such Letter of Credit, computed at a rate per annum equal to the Applicable
Percentage for Letter of Credit fees from time to time in effect on the average
aggregate amount available to be drawn under such Letter of Credit during the
period for which such fee is calculated. Such commission shall be shared ratably
among the L/C Participants in accordance with their respective Revolving Credit
Commitment Percentages. Such commission shall be payable in arrears on each Fee
Payment Date to occur after the issuance of such Letter of
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Credit and on the Revolving Credit Termination Date (or on such earlier date as
the Revolving Credit Commitments shall terminate as provided herein) and shall
be nonrefundable.
(c) In addition to the foregoing fees and commissions, the Company shall
pay or reimburse the Issuing Bank for such normal and customary costs and
expenses as are incurred or charged by the Issuing Bank in issuing, effecting
payment under, amending or otherwise administering any Letter of Credit.
(d) The Administrative Agent shall, promptly following its receipt thereof,
distribute to the Issuing Bank and the L/C Participants all fees and commissions
received by the Administrative Agent for their respective accounts pursuant to
this Section.
2.7 L/C Participations. (a) The Issuing Bank irrevocably agrees to grant
and hereby grants to each L/C Participant, and, to induce the Issuing Bank to
issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Bank, on
the terms and conditions hereinafter stated, for such L/C Participant's own
account and risk, an undivided interest equal to such L/C Participant's
Revolving Credit Commitment Percentage of the Issuing Bank's obligations and
rights under each Letter of Credit issued hereunder and the amount of each draft
paid by the Issuing Bank thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Bank that, if a draft is paid under any
Letter of Credit for which the Issuing Bank is not reimbursed in full by the
Company in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Issuing Bank upon demand at the Issuing Bank's address for
notices specified herein an amount equal to such L/C Participant's Revolving
Credit Commitment Percentage of the amount of such draft, or any part thereof,
which is not so reimbursed. Each L/C Participant's obligation to make the
payment referred to in the immediately preceding sentence shall be absolute and
unconditional and shall not be affected by any circumstance, including (i) any
set-off, counterclaim, recoupment, defense or other right which such L/C
Participant or the Company or any Subsidiary may have against the Issuing Bank
or any other Person for any reason whatsoever, (ii) the occurrence or
continuance of a Default or an Event of Default, (iii) any adverse change in the
condition (financial or otherwise) of the Company or any of its Subsidiaries,
(iv) any breach of this Agreement or any other Loan Document by any Loan Party
or any Lender or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
(b) If any amount required to be paid by any L/C Participant to the Issuing
Bank pursuant to Section 2.7(a) in respect of any unreimbursed portion of any
payment made by the Issuing Bank under any Letter of Credit is paid to the
Issuing Bank within three Business Days after the date such payment is due, such
L/C Participant shall pay to the Issuing Bank on demand an amount equal to the
product of (i) such amount, times (ii) the daily average Federal Funds Effective
Rate during the period from and including the date such payment is required to
the date on which such payment is immediately available to the Issuing Bank,
times (iii) a fraction, the numerator of which is the number of days that elapse
during such period and the denominator of which is 360. If any such amount
required to be paid by any L/C Participant pursuant to Section 2.7(a) is not in
fact made available to the Issuing Bank by such L/C Participant within three
Business Days after the date such payment is due, the Issuing Bank shall be
entitled to
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recover from such L/C Participant, on demand, such amount with interest thereon
calculated from such due date at the rate per annum applicable to Revolving
Credit Loans that are Base Rate Loans hereunder. A certificate of the Issuing
Bank submitted to any L/C Participant with respect to any amounts owing under
this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Bank has made payment under any
Letter of Credit and has received from any L/C Participant its pro rata share of
such payment in accordance with Section 2.7(a), the Issuing Bank receives any
payment related to such Letter of Credit (whether directly from the Company or
otherwise, including proceeds of collateral applied thereto by the Issuing
Bank), or any payment of interest on account thereof, the Issuing Bank will
distribute to such L/C Participant its pro rata share thereof, provided,
however, that in the event that any such payment received by the Issuing Bank
shall be required to be returned by the Issuing Bank, such L/C Participant shall
return to the Issuing Bank the portion thereof previously distributed by the
Issuing Bank to it.
(d) Upon the request of any Lender, the Issuing Bank will provide to each
Lender a copy of each Letter of Credit issued pursuant to this Agreement.
2.8 Reimbursement Obligation of the Company. (a) The Company agrees to
reimburse the Issuing Bank on each date on which the Issuing Bank notifies the
Company of the date and amount of a draft presented under any Letter of Credit
and paid by the Issuing Bank for the amount of such draft so paid and any taxes,
fees, charges or other costs or expenses incurred by the Issuing Bank in
connection with such payment. Each such payment shall be made to the Issuing
Bank at its address for notices specified herein in Dollars and in immediately
available funds.
(b) If any draft shall be presented for payment under any Letter of Credit,
the Issuing Bank shall promptly notify the Company of the date and amount
thereof. If the Issuing Bank notifies the Company prior to 10:00 A.M.
(Charlotte, North Carolina time), on any Business Day, of any drawing under any
Letter of Credit issued by it, the Company shall reimburse the Issuing Bank
pursuant to Section 2.8(a) with respect to such drawing on such Business Day. If
the Issuing Bank notifies the Company after 10:00 A.M. (Charlotte, North
Carolina time), on any Business Day of any drawing under any Letter of Credit,
the Company shall reimburse the Issuing Bank pursuant to Section 2.8(a) with
respect to such drawing on the next succeeding Business Day and interest shall
be payable on the amount of such drawing for such period at the rate then
applicable to Revolving Credit Loans that are Base Rate Loans hereunder. If any
amount payable under this Section is not paid when due, interest shall be
payable on such amount from the date such amount becomes payable under this
Section until payment in full thereof at the rate which would be payable on any
outstanding Revolving Credit Loans that are Base Rate Loans which were then
overdue.
(c) Each drawing under any Letter of Credit shall constitute a request by
the Company to the Administrative Agent for a borrowing of Revolving Credit
Loans pursuant to Section 2.2 consisting of Base Rate Loans in the amount of
such drawing unless the Company gives notice to the Administrative Agent at
least one Business Day prior to such drawing that no
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such Revolving Credit Loans are requested. The Borrowing Date with respect to
such borrowing shall be the date of such drawing. The Administrative Agent shall
use the proceeds of such Loans to reimburse the Issuing Bank for any such
drawing.
2.9 Obligations Absolute. (a) The Company's obligations under Sections 2.4,
2.5, 2.6, 2.7, 2.8, and 2.10 shall be absolute and unconditional under any and
all circumstances and irrespective of any set-off, recoupment, counterclaim or
defense to payment which the Company may have or have had against the Issuing
Bank, any L/C Participant or any beneficiary of a Letter of Credit.
(b) As between the Company and the Lenders (including the Issuing Bank),
the Company assumes all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. The Company also agrees with the Issuing Bank
that the Issuing Bank shall not be responsible for, and the Company's
Reimbursement Obligations under Section 2.8(a) shall not be affected by, among
other things, (i) the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, (ii) any dispute between or among any Loan Party
and any beneficiary of any Letter of Credit or any other party to which such
Letter of Credit may be transferred or (iii) any claims whatsoever of any Loan
Party against any beneficiary of such Letter of Credit or any such transferee.
(c) Neither the Issuing Bank nor any L/C Participant shall be liable for
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Bank's gross
negligence or willful misconduct.
(d) The Company agrees that any action taken or omitted by the Issuing Bank
under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Customs or the
Uniform Commercial Code of the State of New York, shall be binding on the
Company and shall not result in any liability of the Issuing Bank or any L/C
Participant to any Loan Party.
2.10 Letter of Credit Payments. If any draft shall be presented for payment
under any Letter of Credit, the responsibility of the Issuing Bank to the Loan
Parties in connection with such draft shall, in addition to any payment
obligation expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
2.11 Application. To the extent that any provision of any Letter of Credit
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 2, the provisions of this Section 2 shall apply.
2.12 Swing Line Commitment. Subject to the terms and conditions hereof, the
Swing Line Lender agrees to make swing line loans in Dollars (the "Swing Line
Loans") to the
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<PAGE> 38
Company from time to time during the Revolving Credit Commitment Period in an
aggregate principal amount at any one time outstanding not to exceed $3,000,000,
provided that, (a) after giving effect to any such Swing Line Loans, the
Aggregate Outstanding Revolving Credit of all the Revolving Credit Lenders at
such time do not exceed the Revolving Credit Commitments at such time and (b)
the Swing Line Lender shall not make any Swing Line Loan unless it shall have
received notice from the Administrative Agent that the making of such Swing Line
Loan will not violate clause (a) above. During the Revolving Credit Commitment
Period, the Company may use the Swing Line Commitment by borrowing, prepaying
the Swing Line Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof. Swing Line Loans shall be Base Rate Loans
and may not be Converted into Loans that bear interest at any other rate.
2.13 Procedure for Swing Line Borrowing; Prepayment of Swing Line Loans.
The Company may borrow under the Swing Line Commitment during the Revolving
Credit Commitment Period on any Business Day, provided that the Company shall
give the Swing Line Lender and the Administrative Agent irrevocable notice
(which notice must be received by the Swing Line Lender prior to 12:00 Noon
(Charlotte, North Carolina time) on the requested Borrowing Date specifying the
amount of the requested Swing Line Loan which shall be in an aggregate minimum
amount of $250,000 or a whole multiple of $100,000 in excess thereof. The
proceeds of the Swing Line Loan will be made available by the Swing Line Lender
to the Company at the principal office of the Swing Line Lender by 1:00 P.M.
(Charlotte, North Carolina time) on the Borrowing Date by crediting the account
of the Company at such office with such proceeds. The Company may at any time
and from time to time, prepay the Swing Line Loans, in whole or in part, without
premium or penalty, by notifying the Swing Line Lender prior to 11:00 A.M.
(Charlotte, North Carolina time) on any Business Day of the date and amount of
prepayment. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein. Partial prepayments
shall be in an aggregate principal amount of $250,000 or a whole multiple of
$100,000 in excess thereof. Prepayments of the Swing Line Loans shall be
accompanied by accrued and unpaid interest on the amount prepaid.
2.14 Repayment of Swing Line Loans; Participations in Swing Line Loans. (a)
The Company hereby unconditionally promises to pay to the Administrative Agent
for the account of the Swing Line Lender the then unpaid principal amount of the
Swing Line Loans on the Revolving Credit Termination Date (or such earlier date
on which the Swing Line Loans become due and payable pursuant to Section 9). The
Company hereby further agrees to pay interest on the unpaid principal amount of
Swing Line Loans from time to time outstanding from the Borrowing Date thereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 4.6. The Swing Line Lender, at any time in its sole and
absolute discretion may, on behalf of the Company (which hereby irrevocably
authorizes the Swing Line Lender to act on its behalf) request each Revolving
Credit Lender (including the Swing Line Lender) to make a Revolving Credit Loan
(which shall be a Base Rate Loan) in an amount equal to such Revolving Credit
Lender's Revolving Credit Commitment Percentage of the aggregate principal
amount of the Swing Line Loans outstanding on the date such notice is given.
Unless any of the events described in paragraph (f) of Section 9 shall have
occurred with respect to the Company (in which event the procedures of paragraph
(c) of this Section 2.14 shall apply), each Revolving
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<PAGE> 39
Credit Lender shall make the proceeds of its Revolving Credit Loan available to
the Administrative Agent for the account of the Swing Line Lender at the
Administrative Agent's Payment Office prior to 11:00 A.M. (Charlotte, North
Carolina time) in funds immediately available in Dollars on the Business Day
next succeeding the date such notice is given. The proceeds of such Revolving
Credit Loans shall be immediately applied to repay the outstanding Swing Line
Loans. Effective on the day such Revolving Credit Loans are made, the portion of
the Swing Line Loans so paid shall no longer be outstanding as Swing Line Loans
and shall no longer be due under the Swing Line Note.
(b) Notwithstanding anything herein to the contrary, the Swing Line Lender
shall not be obligated to make any Swing Line Loans if the conditions set forth
in Sections 5.1 and 5.2 have not been satisfied.
(c) If prior to the making of a Revolving Credit Loan pursuant to paragraph
(a) of this Section 2.14 one of the events described in paragraph (f) of
Section 9 shall have occurred and be continuing with respect to the Company,
each Revolving Credit Lender will, on the date such Revolving Credit Loan was to
have been made pursuant to the notice described in Section 2.14(a), purchase an
undivided participating interest in the outstanding Swing Line Loans in an
amount equal to (i) its Revolving Credit Commitment Percentage times (ii) the
aggregate principal amount of Swing Line Loans then outstanding. Each Revolving
Credit Lender will immediately transfer to the Swing Line Lender, in immediately
available funds, the amount of its participation.
(d) Whenever, at any time after any Revolving Credit Lender has purchased a
participating interest in a Swing Line Loan, the Swing Line Lender receives any
payment on account thereof, the Swing Line Lender will distribute to such
Revolving Credit Lender its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Revolving Credit Lender's participating interest was outstanding and
funded), provided, however, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Revolving Credit Lender will
return to the Swing Line Lender any portion thereof previously distributed by
the Swing Line Lender to it.
(e) Each Revolving Credit Lender's obligation to make the Revolving Credit
Loans referred to in Section 2.14(a) and to purchase participating interests
pursuant to Section 2.14(c) shall be absolute and unconditional and shall not be
affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Revolving Credit Lender or the
Company may have against the Swing Line Lender, the Company or any other Person
for any reason whatsoever, (ii) the occurrence or continuance of a Default or an
Event of Default, (iii) any adverse change in the condition (financial or
otherwise) of the Company or any Subsidiary, (iv) any breach of this Agreement
or any other Loan Document by any Loan Party or any Lender, or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
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<PAGE> 40
SECTION 3. AMOUNT AND TERMS OF TERM LOAN COMMITMENTS
3.1 Term Loans. Subject to the terms and conditions hereof, (a) each
Tranche A Lender severally agrees to make a term loan (a "Tranche A Term Loan")
in a single disbursement to the Company on the Closing Date in a principal
amount equal to such Tranche A Lender's Tranche A Commitment, and (b) each
Tranche B Lender severally agrees to make a term loan (a "Tranche B Term Loan")
in a single disbursement to the Company on the Closing Date in a principal
amount equal to such Tranche B Lender's Tranche B Commitment. The Term Loans may
from time to time be (i) Eurodollar Loans, (ii) Base Rate Loans or (iii) a
combination thereof, as determined by the Company and notified to the
Administrative Agent in accordance with Sections 3.2 and 4.4. The Tranche A
Commitments shall terminate upon the making of the Tranche A Term Loans. The
Tranche B Commitments shall terminate upon the making of the Tranche B Term
Loans.
3.2 Procedure for Term Loan Borrowing. The Company may borrow under the
Term Loan Commitments on the Closing Date, provided that the Company shall give
the Administrative Agent irrevocable notice in the form of a Notice of Borrowing
(which notice must be received by the Administrative Agent prior to 11:00 A.M.,
(Charlotte, North Carolina time), on the Closing Date), specifying the amounts
of the Tranche A Term Loans and Tranche B Term Loans to be borrowed. Initially,
the Tranche A Term Loans and Tranche B Term Loans shall be Base Rate Loans,
provided that such Loans may be Converted to Eurodollar Loans pursuant to
Section 4.4 after the Closing Date. Upon receipt of such notice, the
Administrative Agent shall promptly notify each Term Loan Lender thereof. On the
Closing Date, each Term Loan Lender shall make available to the Administrative
Agent at its office specified in Section 11.2 the amount in immediately
available funds equal to the Term Loans to be made by such Term Loan Lender. The
Administrative Agent shall on such date credit the account of the Company on the
books of such office of the Administrative Agent with the aggregate of the
amounts made available to the Administrative Agent by such Term Loan Lenders and
in like funds as received by the Administrative Agent.
3.3 Repayment of Tranche A Term Loans. The Company hereby unconditionally
promises to pay to the Administrative Agent for the account of the Tranche A
Lenders the principal amount of the Tranche A Term Loans in twenty-four
consecutive quarterly installments of principal, commencing on February 29,
2000, on the dates and in the principal amounts set forth below (or such earlier
date on which the Tranche A Term Loans become due and payable pursuant to
Section 9), subject to adjustment as provided in Section 4.2 or 4.3:
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
February 29, 2000 $750,000
May 31, 2000 $750,000
August 31, 2000 $750,000
November 30, 2000 $750,000
February 28, 2001 $1,250,000
May 31, 2001 $1,250,000
August 31, 2001 $1,250,000
</TABLE>
34
<PAGE> 41
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
November 30, 2001 $1,250,000
February 28, 2002 $1,500,000
May 31, 2002 $1,500,000
August 31, 2002 $1,500,000
November 30, 2002 $1,500,000
February 28, 2003 $2,000,000
May 31, 2003 $2,000,000
August 31, 2003 $2,000,000
November 30, 2003 $2,000,000
February 29, 2004 $2,000,000
May 31, 2004 $2,000,000
August 31, 2004 $2,000,000
November 30, 2004 $2,000,000
February 28, 2005 $2,500,000
May 31, 2005 $2,500,000
August 31, 2005 $2,500,000
November 30, 2005 $2,500,000
</TABLE>
The Company hereby further agrees to pay interest on the unpaid principal amount
of the Tranche A Term Loans from time to time outstanding from the Closing Date
until payment in full thereof at the rates per annum, and on the dates, set
forth in Sections 4.6 and 4.10.
3.4 Repayment of Tranche B Term Loans. The Company hereby unconditionally
promises to pay to the Administrative Agent for the account of the Tranche B
Lenders the principal amount of the Tranche B Term Loans in twenty-eight
consecutive quarterly installments of principal, commencing on February 29,
2000, on the dates and in the principal amounts set forth below (or such earlier
date on which the Tranche B Term Loans become due and payable pursuant to
Section 9), subject to adjustment as provided in Section 4.2 or 4.3:
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
February 29, 2000 $125,000
May 31, 2000 $125,000
August 31, 2000 $125,000
November 30, 2000 $125,000
February 28, 2001 $125,000
May 31, 2001 $125,000
August 31, 2001 $125,000
November 30, 2001 $125,000
February 28, 2002 $125,000
May 31, 2002 $125,000
August 31, 2002 $125,000
November 30, 2002 $125,000
</TABLE>
35
<PAGE> 42
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
February 28, 2003 $125,000
May 31, 2003 $125,000
August 31, 2003 $125,000
November 30, 2003 $125,000
February 29, 2004 $125,000
May 31, 2004 $125,000
August 31, 2004 $125,000
November 30, 2004 $125,000
February 28, 2005 $125,000
May 31, 2005 $125,000
August 31, 2005 $125,000
November 30, 2005 $125,000
February 28, 2006 $11,750,000
May 31, 2006 $11,750,000
August 31, 2006 $11,750,000
November 30, 2006 $11,750,000
</TABLE>
The Company hereby further agrees to pay interest on the unpaid principal amount
of the Tranche B Term Loans from time to time outstanding from the Closing Date
until payment in full thereof at the rates per annum, and on the dates, set
forth in Sections 4.6 and 4.10.
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS
AND LETTERS OF CREDIT
4.1 Evidence of Debt. (a) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Company to
such Lender resulting from each Loan of such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Agreement.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 11.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Revolving Credit Loan, Swing Line Loan, and Term
Loan made hereunder, the Type thereof and each Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable to the Lenders hereunder, (iii) the amount of each
Revolving Credit Lender's participation in outstanding Letters of Credit and
Swing Line Loans and (iv) both the amount of any sum received by the
Administrative Agent hereunder from the Company and each Lender's share thereof.
(c) The entries made in the Register and the accounts of each Lender
maintained pursuant hereto shall, to the extent permitted by applicable law, be
prima facie evidence of the existence and amounts of the obligations of the
Company therein recorded, provided, however, that the failure of any Lender or
the Administrative Agent to maintain the Register or any such account, or any
error therein, shall not in any manner affect the obligation of the Company to
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<PAGE> 43
repay (with applicable interest) the Loans made to the Company in accordance
with the terms of this Agreement.
(d) The Company agrees that, upon the request to the Administrative Agent
by any applicable Lender, the Company will execute and deliver to such Lender,
as appropriate, (i) a promissory note of the Company evidencing the Revolving
Credit Loans of such Lender, substantially in the form of Exhibit B-1 with
appropriate insertions as to date and principal amount (a "Revolving Credit
Note"), (ii) a promissory note of the Company evidencing the Tranche A Term Loan
of such Lender, substantially in the form of Exhibit B-2 with appropriate
insertions as to date and principal amount (a "Tranche A Term Note"), (iii) a
promissory note of the Company evidencing the Tranche B Term Loan of such
Lender, substantially in the form of Exhibit B-3 with appropriate insertions as
to date and principal amount (a "Tranche B Term Note", and together with the
Tranche A Term Notes, the "Term Notes"), and (iv) a promissory note of the
Company evidencing the Swing Line Loans of the Swing Line Lender, substantially
in the form of Exhibit B-4 with appropriate insertions as to date and principal
amount (the "Swing Line Note"). Each Lender is hereby authorized to record the
Borrowing Date, the amount of each relevant Loan and the date and amount of each
payment or prepayment of principal thereof, on the schedule annexed to and
constituting a part of the Note evidencing such Loan and any such recordation
shall constitute prima facie evidence of the accuracy of the information so
recorded, provided that the failure by a Lender to make any such recordation (or
any error therein) shall not affect any of the obligations of the Company under
such Note or this Agreement.
4.2 Optional Prepayments. The Company may prepay the Term Loans and
Revolving Credit Loans in whole or in part without premium or penalty, in the
case of Eurodollar Loans on the last day of any Interest Period with respect
thereto (except that the Company may make a prepayment of Eurodollar Loans on a
day other than the last day of the Interest Period with respect thereto as long
as it complies with Section 4.14) and, in the case of Base Rate Loans (other
than Swing Line Loans), on any Business Day, provided that (a) the Company shall
have given (i) at least three Business Days' irrevocable notice to the
Administrative Agent (in the case of Eurodollar Loans) and (ii) one Business
Day's irrevocable notice to the Administrative Agent (in the case of Base Rate
Loans), (b) such notice specifies, in the case of any prepayment of Loans, the
date and amount of prepayment and whether the prepayment is (i) of Term Loans,
Revolving Credit Loans, or a combination thereof, and in each case if a
combination thereof, the amount allocable to each, and (ii) of Eurodollar Loans,
Base Rate Loans or a combination thereof, and, in each case if a combination
thereof, the principal amount allocable to each, and (iii) each prepayment is in
a minimum principal amount of $1,000,000 and a multiple of $1,000,000 in excess
thereof. Upon the receipt of any such notice, the Administrative Agent shall
promptly notify each of the relevant Lenders thereof. If any such notice is
given, the amount specified in such notice shall be due and payable on the date
specified therein, together with any amounts payable pursuant to Section 4.14
and, in the case of prepayments of the Term Loans or Revolving Credit Loans that
are Eurodollar Loans, accrued interest to such date on the amount prepaid.
Partial prepayments of the Term Loans pursuant to this Section shall be applied
(x) pro rata (based on outstanding principal amount) to the Tranche A Term Loans
and the Tranche B Term Loans and (y) pro rata to the respective then remaining
principal installments thereof. Amounts prepaid pursuant to this Section 4.2 on
account of the Term Loans may not be
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<PAGE> 44
reborrowed. Revolving Credit Loans may not be prepaid if any Swing Line Loans
are outstanding at such time. Swing Line Loans may be prepaid as provided in
Section 2.13.
4.3 Mandatory Prepayments of Loans and Reductions of Revolving Credit
Commitments. (a) If, on any day, the Aggregate Outstanding Revolving Credit of
all the Revolving Credit Lenders exceeds the Revolving Credit Commitments on
such date, the Company shall, without notice or demand, immediately repay such
of the outstanding Revolving Credit Loans and Swing Line Loans in an aggregate
principal amount such that, after giving effect thereto, the Aggregate
Outstanding Revolving Credit of all the Revolving Credit Lenders does not exceed
the Revolving Credit Commitments, together with interest accrued to the date of
such payment or prepayment on the principal so prepaid and any amounts payable
under Section 4.14 in connection therewith. Any prepayment of Revolving Credit
Loans pursuant to the immediately preceding sentence shall first be applied to
prepay any outstanding Swing Line Loans. To the extent that after giving effect
to any prepayment of Loans required by this Section 4.3(a), the Aggregate
Outstanding Revolving Credit of all the Revolving Credit Lenders at such time
exceeds the Revolving Credit Commitments at such time, the Company shall,
without notice or demand, immediately deposit in a Cash Collateral Account upon
terms reasonably satisfactory to the Administrative Agent an amount equal to the
lesser of (i) the sum of the aggregate then outstanding L/C Obligations and (ii)
the amount of such remaining excess. The Administrative Agent shall apply any
cash deposited in the Cash Collateral Account (to the extent thereof) to pay any
Reimbursement Obligations which are or become due thereafter, provided that, (A)
the Administrative Agent shall, if no Default or Event of Default exists,
release to the Company from time to time such portion of the amount on deposit
in the Cash Collateral Account to the extent such amount is not required to be
so deposited in order for the Company to be in compliance with this Section
4.3(a) and (B) the Administrative Agent may so apply such cash at any time after
the occurrence and during the continuation of an Event of Default.
(b) On the earlier of (i) the date of receipt by the Lenders of the
financial statements required to be delivered pursuant to Section 7.1(a) as to
any fiscal year of the Company (the "Base Year") and (ii) the 90th day of the
fiscal year of the Company next succeeding the Base Year, the Loans shall be
prepaid and/or the Commitments shall be reduced in an amount equal to 75% of
Excess Cash Flow for the Base Year (commencing with the fiscal year ending
November 30, 2000) in accordance with paragraph (e) of this Section, provided
that such percentage shall be 50% if, as of the end of such Base Year, the
Leverage Ratio is less than 3.75 to 1.00.
(c) On the day upon which the Company or any of its Subsidiaries receives
Net Cash Proceeds from the issuance of any Indebtedness (other than Indebtedness
permitted by Section 8.2) or Capital Stock or from any capital contribution
(other than any issuance of Capital Stock to, or any capital contribution by,
the Sponsor and/or its Affiliates or management or employees of the Company or
any of the Subsidiaries) the Loans shall be prepaid and/or the Commitments shall
be reduced in an amount equal to 100% of the Net Cash Proceeds of such issuance
of Indebtedness or Capital Stock or such capital contribution in accordance with
paragraph (e) of this Section.
38
<PAGE> 45
(d) If the Company or any of its Subsidiaries sells, assigns, transfers,
leases or otherwise disposes of any of its assets (other than pursuant to
Sections 8.5(a) through (h), (j) and (k)) or any of its assets becomes the
subject of a Casualty Event, no later than five Business Days after receipt of
the Net Cash Proceeds therefrom, the Loans shall be prepaid and/or the
Commitments shall be reduced by an amount equal to 100% of such Net Cash
Proceeds in accordance with paragraph (e) of this Section, provided that, at the
option of the Company and so long as no Default or Event of Default shall have
occurred and be continuing or would be caused thereby, (i) the Company and its
Subsidiaries may use up to $25,000,000 of the Net Cash Proceeds realized in the
aggregate subsequent to the Closing Date from any such sales, assignments,
transfers, leases or other dispositions to reinvest in the business of the
Company and its Subsidiaries in a manner consistent with Section 8.13 (including
Permitted Acquisitions), in each case within six months after the consummation
of the relevant sale, assignment, lease, transfer or other disposition, subject
to the following conditions: (w) in the event the Company or any of its
Subsidiaries elects to exercise its rights pursuant to this clause (i), the
Company or such Subsidiary, as the case may be, shall promptly deliver a
certificate of a Responsible Officer to the Administrative Agent setting forth
the amount of the Net Cash Proceeds which the Company or such Subsidiary, as the
case may be, expects to so use during the subsequent six month period, and (x)
on the date which is six months, after the relevant sale or other disposition,
the Company or such Subsidiary, as the case may be, shall (A) deliver a
certificate of a Responsible Officer to the Administrative Agent certifying as
to the amount and use of such Net Cash Proceeds actually so used and (B) deliver
to the Administrative Agent, for application in accordance with (and to the
extent required by) this Section, an amount equal to the remaining unused Net
Cash Proceeds and (ii) the Company or any of its Subsidiaries may use the Net
Cash Proceeds of any Casualty Event to replace, restore or rebuild the property
or assets which were the subject of the Casualty Event or asset related or
complementary thereto within one year after the receipt of the Net Cash Proceeds
related to such Casualty Event, subject to the following conditions: (y) in the
event the Company or any of its Subsidiaries elects to exercise its right
pursuant to this clause (ii), the Company or such Subsidiary, as the case may
be, shall promptly deliver a certificate of a Responsible Officer to the
Administrative Agent setting forth the amount of the Net Cash Proceeds which the
Company or such Subsidiary, as the case may be, expects to so use during the
subsequent one year period, and (z) on the date which is one year after receipt
of the Net Cash Proceeds related to the relevant Casualty Event, the Company or
such Subsidiary, as the case may be, shall (1) deliver a certificate of a
Responsible Officer to the Administrative Agent certifying as to the amount and
use of such Net Cash Proceeds actually used to replace or rebuild such property
or assets and (2) deliver to the Administrative Agent, for application in
accordance with (and to the extent required by) this Section, an amount equal to
the remaining unused Net Cash Proceeds, provided, further that, notwithstanding
anything to the contrary in the immediately preceding proviso, the Loans shall
be prepaid and/or the Commitments shall be reduced in accordance with paragraph
(e) of this Section to the extent the failure to do so would otherwise result in
a "Asset Sale Offer" (as defined in the Senior Subordinated Note Indenture). If
a Default or Event of Default shall have occurred and be continuing, the Company
shall immediately deliver to the Administrative Agent all Net Cash Proceeds held
by the Company or any Subsidiary pursuant to this Section 4.3(d) for deposit in
a Cash Collateral Account as security for the Obligations.
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<PAGE> 46
(e) Prepayments pursuant to Sections 4.3(b), 4.3(c) and 4.3(d) shall be
applied, first, to prepay Term Loans then outstanding, second, to prepay Swing
Line Loans then outstanding, third, to prepay Revolving Credit Loans then
outstanding, fourth, to pay any Reimbursement Obligations then outstanding and,
last, to cash collateralize any outstanding L/C Obligations on terms
satisfactory to the Administrative Agent; provided, however, that if an Event of
Default shall have occurred and be continuing, all Net Cash Proceeds and all
prepayments pursuant to Sections 4.3(b), 4.3(c) and 4.3(d) shall be applied
against the Obligations in the order and manner specified in Section 6.9 of the
Guarantee and Collateral Agreement. Prepayments of Term Loans pursuant to
Sections 4.3(b), 4.3(c) and 4.3(d) shall be applied (i) pro rata (based on
outstanding principal amount) to the Tranche A Term Loans and the Tranche B Term
Loans and (ii) pro rata to the respective then remaining installments of
principal thereof. Notwithstanding the foregoing, in respect of any partial
prepayment of Term Loans pursuant to this Section, any Lender having a Tranche B
Term Loan may elect to decline receipt of all or part of its share of any such
prepayment, and, if such Lender so declines, such share shall be applied as an
additional prepayment of the Tranche A Term Loans in accordance with clause (ii)
of the immediately preceding sentence of this Section; provided, that (A) any
such Tranche B Lender that wishes to decline receipt of all or part of its share
of any such prepayment shall promptly, and, in any event no later than one
Business Day prior to the date specified for such prepayment, notify the
Administrative Agent of such election and the percentage that such Tranche B
Lender has elected to decline of the prepayment that it would otherwise have
been entitled to receive pursuant to this Section 4.3(e) and (B) after giving
effect to any concurrent payment of the Tranche A Term Loans pursuant to
Sections 4.3(b), 4.3(c) or 4.3(d), the Tranche A Term Loans shall not have been
paid in full. Amounts applied against the Revolving Credit Loans, Swing Line
Loans, and Reimbursement Obligations and to cash collateralize L/C Obligations
pursuant to Section 4.3(d) shall permanently reduce the amount of the Revolving
Credit Commitments by the amount of each such application. All prepayments of
Term Loans under this Section 4.3(e) shall be made together with accrued
interest to the date of such prepayment on the principal amount prepaid.
(f) Amounts prepaid on account of Term Loans may not be reborrowed.
(g) Notwithstanding the foregoing provisions of Section 4.3(e), if at any
time the mandatory prepayment of Loans pursuant to Section 4.3(b), (c) or (d)
would result, after giving effect to the procedures set forth above, in the
Company's incurring breakage costs under Section 4.14 as a result of Eurodollar
Loans being prepaid other than on the last day of an Interest Period applicable
thereto (the "Affected Eurodollar Loans"), then the Company may in its sole
discretion, so long as no Default or Event of Default shall have then occurred
and be continuing, deposit a portion (up to 100%) of the amounts in Dollars that
otherwise would have been paid in respect of the Affected Eurodollar Loans with
the Administrative Agent (which deposit must be equal in amount to the amount of
the Affected Eurodollar Loans not immediately prepaid) in a Cash Collateral
Account to be held as security for the Obligations, with such cash collateral to
be directly applied by the Administrative Agent to prepay the relevant Affected
Eurodollar Loans on the last day of the Interest Periods applicable thereto (or
such earlier date or dates as shall be requested by the Company or as shall be
determined by the Administrative Agent at any time after the occurrence and
during the continuation of a Default or Event of Default). Notwithstanding
anything to the contrary contained in the immediately preceding sentence, all
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amounts deposited in such Cash Collateral Account pursuant to the immediately
preceding sentence shall be held for the sole benefit of the Lenders whose Loans
would otherwise have been immediately prepaid with the amounts deposited, and,
upon the taking of any action by the Administrative Agent or the Lenders
pursuant to the remedial provisions of Section 9, any amounts held as cash
collateral pursuant to this Section 4.3(g) shall, subject to the requirements of
applicable law, be immediately applied to prepay such Loans.
4.4 Conversion and Continuation Options. (a) The Company may elect from
time to time to Convert Eurodollar Loans to Base Rate Loans and Base Rate Loans
to Eurodollar Loans by giving the Administrative Agent irrevocable notice of
such election in accordance with Section 4.4(c). All or any part of outstanding
Eurodollar Loans and Base Rate Loans may be Converted as provided herein,
provided that (i) no Loan may be Converted into a Eurodollar Loan when any Event
of Default has occurred and is continuing and the Administrative Agent has or
the Required Lenders have determined that such a Conversion is not appropriate,
(ii) no Loan may be Converted into a Eurodollar Loan after the date that is one
month prior to (a) the Revolving Credit Termination Date (in the case of
Conversions of Revolving Credit Loans), or (b) the date of the final installment
of principal of the relevant Term Loans (in the case of Conversions of Term
Loans) and (iii) any Conversion of Eurodollar Loans may only occur on the last
day of the Interest Period with respect thereto.
(b) Any Eurodollar Loans may be Continued as such upon the expiration of
the then current Interest Period with respect thereto by giving prior
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1 and
Section 4.4(c), of the length of the next Interest Period to be applicable to
such Loans, provided that no Eurodollar Loan may be Continued as such (i) when
any Event of Default has occurred and is continuing and the Administrative Agent
has or the Required Lenders have determined that such a Continuation is not
appropriate or (ii) after the date that is one month prior to (a) the Revolving
Credit Termination Date (in the case of Continuations of Revolving Credit
Loans), or (b) the date of the final installment of principal of the relevant
Term Loans (in the case of Continuations of Term Loans), and provided, further,
that if the Company shall fail to give such notice or if such Continuation is
not permitted, such Eurodollar Loans shall be automatically Converted to Base
Rate Loans on the last day of such then expiring Interest Period.
(c) The Company shall deliver notices of Conversions and Continuations to
the Administrative Agent in the form of a Notice of Conversion/Continuation
prior to 11:00 A.M. (Charlotte, North Carolina time) at least (i) three Business
Days prior to the requested date of Continuation, if Loans are to be Continued
as Eurodollar Loans, (ii) three Business Days prior to the requested date of
Conversion, if Base Rate Loans are to be Converted into Eurodollar Loans and
(iii) one Business Day prior to the requested date of Conversion, if Eurodollar
Loans are to be Converted into Base Rate Loans, specifying: (A) the proposed
date of Conversion or Continuation; (B) the aggregate amount of Loans to be
Converted or Continued; (C) the Type of Loans resulting from the proposed
Conversion or Continuation; and (D) except for Conversions into the Base Rate
Loans, the duration of the requested Interest Period.
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(d) Notwithstanding anything to the contrary contained herein, upon the
request of the Required Lenders during the existence of an Event of Default, all
outstanding Eurodollar Loans shall be Converted into Base Rate Loans.
4.5 Minimum Amounts and Maximum Number of Tranches. All borrowings,
Conversions and Continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or
a whole multiple of $1,000,000 in excess thereof. In no event shall there be
more than six Eurodollar Tranches outstanding at any time.
4.6 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Percentage.
(b) Each Base Rate Loan (other than the Swing Line Loans) shall bear
interest at a rate per annum equal to the Base Rate plus the Applicable
Percentage.
(c) Each Swing Line Loan shall bear interest at a rate per annum equal to
the Base Rate plus one-half of one percent (.50%).
(d) If an Event of Default shall have occurred and be continuing, (i) the
outstanding principal of the Loans and Reimbursement Obligations shall bear
interest at a per annum rate equal to two percent (2%) plus the rate of interest
otherwise applicable to such Loans or Reimbursement Obligations pursuant to this
Agreement and (ii) any overdue amount under this Agreement and the other Loan
Documents (other than principal of the Loans or Reimbursement Obligations, but
including interest, fees and expenses) shall, to the extent permitted by
applicable law, bear interest at a rate per annum equal to two percent (2%) plus
the rate of interest for Revolving Credit Loans that are Base Rate Loans.
(e) Interest shall be payable in arrears on each Interest Payment Date and
on the Revolving Credit Termination Date (in the case of Revolving Credit Loans
and Swing Line Loans) and the date of the final installment of principal (in the
case of Term Loans), provided that interest accruing pursuant to paragraph (d)
of this Section shall be payable from time to time on demand.
4.7 Commitment Fees; Other Fees. (a) The Company shall pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the first day of the Revolving
Credit Commitment Period to the Revolving Credit Termination Date, computed at a
rate per annum equal to the Applicable Percentage for commitment fees on the
average daily amount of the Available Revolving Credit Commitment of such Lender
during the period for which payment is made (calculated as if no Swing Line
Loans were outstanding during such period), payable quarterly in arrears on each
Fee Payment Date and on the Revolving Credit Termination Date or such earlier
date as the Revolving Credit Commitments shall terminate or be reduced as
provided herein, commencing on the first of such dates to occur after the date
hereof.
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(b) The Company shall pay to the Agents and BAS, each for its own account,
the fees on the dates and in the amounts specified in the Commitment Letter and
Fee Letter.
4.8 Computation of Interest and Fees. (a) Whenever it is calculated on the
basis of the Base Rate, interest shall be calculated on the basis of a 365- (or
366-, as the case may be) day year for the actual days elapsed; and, otherwise,
interest, commitment fees and letter of credit fees and commissions shall be
calculated on the basis of a 360-day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Company and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Loan resulting from a change in the Base Rate or the Eurodollar
Reserve Requirements shall become effective as of the opening of business on the
day on which such change becomes effective. The Administrative Agent shall as
soon as practicable notify the Company and the Lenders of the effective date and
the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Company and the Lenders in the absence of manifest error. The Administrative
Agent shall, at the request of the Company, deliver to the Company a statement
showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to Section 4.6(a).
4.9 Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:
(a) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Company) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the Required
Lenders (which notice shall be conclusive and binding on the Company) that the
Eurodollar Rate determined or to be determined for such Interest Period in
respect of any Eurodollar Loan will not adequately and fairly reflect the cost
to the Lenders of making, funding or maintaining Eurodollar Loans during such
Interest Period, then the Administrative Agent shall give telecopy or telephonic
notice thereof to the Company and the Lenders as soon as practicable thereafter.
If such notice is given pursuant to either clause (a) or (b) of this Section 4.9
in respect of Eurodollar Loans, then (i) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as Base Rate Loans,
(ii) any Loans that were to have been Converted on the first day of such
Interest Period to Eurodollar Loans shall remain as Base Rate Loans and (iii)
any outstanding Eurodollar Loans shall be Converted, on the last day of the then
current Interest Period applicable thereto, to Base Rate Loans. Until such
notice has been withdrawn by the Administrative Agent, no further Eurodollar
Loans shall be made or Continued as such, nor shall the Company have the right
to Convert Base Rate Loans to Eurodollar Loans.
4.10 Pro Rata Treatment and Payments. (a) Each borrowing of Revolving
Credit Loans by the Company from the Revolving Credit Lenders hereunder shall be
made, each
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payment by the Company on account of any commitment fee in respect of the
Revolving Credit Commitments shall be allocated by the Administrative Agent and
any reduction of the Revolving Credit Commitments shall be allocated by the
Administrative Agent, pro rata according to the Revolving Credit Commitment
Percentages of the Revolving Credit Lenders. Each payment (including each
prepayment) by the Company on account of principal of and interest on any
Revolving Credit Loan shall be allocated pro rata according to the Revolving
Credit Commitment Percentages of the Revolving Credit Lenders. Each payment
(including each prepayment) by the Company on account of principal of and
interest on any Tranche A Term Loans or Tranche B Term Loans shall be allocated
by the Administrative Agent pro rata according to their respective Tranche A
Commitment Percentages or Tranche B Commitment Percentages. All payments
(including prepayments) to be made by the Company hereunder and under any Notes,
whether on account of principal, interest, fees, Reimbursement Obligations or
otherwise, shall be made without set-off, recoupment, counterclaim or other
defense and shall be made prior to 12:00 Noon, (Charlotte, North Carolina time),
on the due date thereof to the Administrative Agent, for the account of the
relevant Lenders at the Administrative Agent's Payment Office, in Dollars and in
immediately available funds. Payments received by the Administrative Agent after
such time shall be deemed to have been received on the next Business Day. The
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment hereunder (other than payments
on Eurodollar Loans) becomes due and payable on a day other than a Business Day,
the maturity of such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
Eurodollar Loan becomes due and payable on a day other than a Business Day, the
maturity of such payment shall be extended to the next succeeding Business Day
(and, with respect to payments of principal, interest thereon shall be payable
at the then applicable rate during such extension) unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make the amount that
would constitute its portion of such borrowing available to the Administrative
Agent, the Administrative Agent may assume that such Lender is making such
amount available to the Administrative Agent and the Administrative Agent may,
in reliance upon such assumption, make available to the Company a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent on demand such amount with interest thereon at a rate equal
to the daily average Federal Funds Effective Rate for the period until such
Lender makes such amount immediately available to the Administrative Agent, in
each case with a customary administrative fee with respect thereto. A
certificate of the Administrative Agent submitted to any Lender with respect to
any amounts owing under this Section shall be conclusive in the absence of
manifest error. If such Lender's portion of such borrowing is not made available
to the Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum equal to the higher of (i)
the rate specified in the second sentence of this paragraph and (ii) the rate
applicable to Revolving Credit Loans that are Base Rate Loans hereunder, on
demand, from the Company.
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(c) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Obligations to which, or the manner in which, such
funds are to be applied, the Administrative Agent shall distribute such funds to
each Lender ratably in accordance with such Lender's Total Credit Percentage, in
repayment or prepayment of such of the outstanding Obligations owed to such
Lender, and for application to such principal installments, as the
Administrative Agent shall direct.
4.11 Illegality. Notwithstanding any other provision herein, if any
Requirement of Law or the interpretation or application thereof shall make it
unlawful for any Lender (or its Applicable Lending Office) to make, maintain or
fund Eurodollar Loans as contemplated by this Agreement, (a) the Commitment of
such Lender hereunder to make Eurodollar Loans, Continue Eurodollar Loans as
such and Convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled
and (b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall
be Converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such Conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Company shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 4.14. During any such period of illegality, any
Loans that, but for the application of the preceding sentence would have been
maintained as Eurodollar Loans, shall be made and maintained by the affected
Lender as Base Rate Loans.
4.12 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender (or its Applicable Lending Office) with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender (or its Applicable Lending Office) to any tax
of any kind whatsoever with respect to this Agreement, any Note, any Letter of
Credit, any Letter of Credit Application or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender (or its Applicable
Lending Office) in respect thereof (other than franchise taxes or taxes imposed
on the overall net income of such Lender by the jurisdiction in which such
Lender has its principal office or such Applicable Lending Office);
(ii) shall impose, modify or hold applicable any reserve, assessment,
special deposit, compulsory loan or similar requirement (other than the
Eurodollar Reserve Requirements utilized in the determination of the Eurodollar
Base Rate) against commitments of, assets held by, deposits or other liabilities
in or for the account of, advances, loans or other extensions of credit by, or
any other acquisition of funds by, such Lender (or its Applicable Lending
Office), including the Commitments or Loans of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending Office) or the
London interbank market any other condition;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, funding, Converting into,
Continuing or maintaining Eurodollar
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Loans or issuing or participating in Letters of Credit or to reduce any amount
receivable by such Lender (or its Applicable Lending Office) hereunder in
respect thereof, then, in any such case, the Company shall promptly pay such
Lender such additional amount or amounts as will compensate such Lender for such
increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its obligations
hereunder or under any Letter of Credit to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy), then from time to time, the Company
shall promptly pay to such Lender such additional amount or amounts as will
compensate such Lender or such corporation for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts pursuant
to this Section, such Lender shall promptly notify the Company (with a copy to
the Administrative Agent) of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender to the Company (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable allocation or
attribution methods. The agreements in this Section shall survive the
termination of the Commitments and the payment of the Loans and all other
amounts payable hereunder.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; provided that the Company shall not be required to
compensate a Lender pursuant to this Section 4.12 for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender
notifies the Company of the event or occurrence giving rise to such increased
costs or reductions and of such Lender's intention to claim compensation
therefor; provided further that, if the event or occurrence giving rise to such
increased costs or reductions is retroactive, then the 180-day period referred
to above shall be extended to include the period of retroactive effect thereof.
4.13 Taxes. (a) Any and all payments by the Company to or for the account
of any Lender or the Administrative Agent hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, imposed by the United
States, any political subdivision thereof, or any other jurisdiction from which
a payment under the Loan Documents is made by or on behalf of the Company,
excluding, in the case of each Lender and the Administrative Agent, taxes
imposed on its income and franchise taxes imposed on it (all such non-excluded
taxes, duties, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Company shall be
required by any Requirement of Law to deduct any Taxes from or in respect of any
sum payable
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under this Agreement or any other Loan Document to any Lender or the
Administrative Agent, (i) the sum payable shall be increased as necessary so
that after making all required deductions such Lender or the Administrative
Agent receives an amount equal on an after tax basis to the sum it would have
received had no such deductions been made, (ii) the Company shall make such
deductions, (iii) the Company shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law and (iv)
the Company shall furnish to the Administrative Agent, at its address referred
to in Section 11.2, the original or a certified copy of a receipt evidencing
payment thereof.
(b) In addition, the Company agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Agreement or any
other Loan Document or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Loan Document (hereinafter referred to
as "Other Taxes").
(c) The Company agrees to indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
Section 4.13) imposed on or paid by such Lender or the Administrative Agent (as
the case may be) and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter whenever a lapse in time or change in
circumstances renders such forms, certificates or other evidence obsolete or
inaccurate in any material respect (but only if and only so long as such Lender
remains lawfully able to do so), shall provide the Company and the
Administrative Agent with (i) Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Lender is entitled to benefits under an income tax treaty
to which the United States is a party which eliminates withholding tax on
payments of interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States, (ii) Internal Revenue Service Form W-8 or W-9, or any
successor form prescribed by the Internal Revenue Service and (iii) any other
form or certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying
that such Lender is entitled to an exemption from tax on payments pursuant to
this Agreement or any of the other Loan Documents. If a Lender is subsequently
unable to deliver any such forms, certificates or other evidence, such Lender
shall immediately provide the Company with notice thereof. Each Person that
becomes a Participant shall furnish all notifications, forms and certificates
required hereunder to the Company and to the Lender from which the related
participation shall have been purchased.
(e) For any period with respect to which a Lender has failed to provide the
Company and the Administrative Agent with the appropriate form pursuant to
Section 4.13(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the
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date on which a form originally was required to be provided), such Lender shall
not be entitled to indemnification under Section 4.13(a) or 4.13(c) with respect
to Taxes or Other Taxes imposed by the United States, any political subdivision
thereof, or any jurisdiction from which a payment under the Loan Documents is
made by or on behalf of the Company; provided, however, that should a Lender,
which is otherwise exempt from withholding tax, become subject to Taxes because
of its failure to deliver a form required hereunder, the Company shall take such
steps as such Lender shall reasonably request to assist such Lender to recover
such Taxes.
(f) Within thirty days after the date of any payment of Taxes or Other
Taxes, the Company shall furnish to the Administrative Agent the original or a
certified copy of a receipt evidencing such payment.
(g) Without prejudice to the survival of any other agreement of the Company
hereunder, the agreements and obligations of the Company contained in this
Section 4.13 shall survive the termination of the Commitments and the payment in
full of the Loans and all other amounts payable hereunder.
(h) If the Company believes that any Taxes or Other Taxes it has paid or
deducted from any payment made hereunder were not correctly or legally asserted,
the Lender or the Administrative Agent, as the case may be, on whose behalf such
Taxes or Other Taxes were paid or deducted, shall take all reasonable actions
requested by the Company to obtain a refund of such Taxes or Other Taxes at the
Company's expense. If a Lender or the Administrative Agent shall become aware
that it is entitled to receive a refund in respect of Taxes or Other Taxes, it
shall promptly notify the Company of the availability of such refund and shall,
within thirty days after receipt of a request by the Company pursue or timely
claim such refund at the Company's expense. If any Lender or the Administrative
Agent receives a refund in respect of any Taxes or Other Taxes for which such
Lender or the Administrative Agent has received payment from the Company
hereunder, such Lender or the Administrative Agent shall promptly repay such
refund (plus any interest received) to the Company (but only to the extent of
payments made or additional amounts paid by the Company under Section 4.13(a) or
4.13(c) with respect to the Taxes or Other Taxes giving rise to such refund)
within ten days of receipt thereof, provided that the Company, upon the request
of such Lender or the Administrative Agent, agrees to return such refund (plus
any interest or other charges received) to such Lender or the Administrative
Agent in the event such Lender or the Administrative Agent is required to repay
such refund to the relevant taxing authority.
4.14 Indemnity. The Company agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of (a) default by the Company in making a borrowing of,
Conversion into or Continuation of Eurodollar Loans after the Company has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Company in making any prepayment of a Eurodollar
Loan after the Company has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of any Eurodollar
Loan on a day which is not the last day of the Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed, Converted or
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Continued, for the period from the date of such prepayment or of such failure to
borrow, Convert or Continue to the last day of such Interest Period (or, in the
case of a failure to borrow, Convert or Continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Percentage included therein, if any) over (ii) the amount of interest
(as reasonably determined by such Lender) which would have accrued to such
Lender on such amount by placing such amount on deposit for a comparable period
with leading banks in the London interbank market. This covenant shall survive
the termination of the Commitments and the payment of the Loans and all other
amounts payable hereunder.
4.15 Mitigation of Obligations; Replacement of Lenders. (a) If any Lender
or a Participant in such Lender's Loans requests compensation under Section
4.12, or if the Company is required to pay any additional amount to any Lender
or a Participant in such Lender's Loans or any Governmental Authority for the
account of any Lender or Participant pursuant to Section 4.13, then, if
requested by the Company, such Lender or Participant shall use reasonable
efforts to designate a different Applicable Lending Office for its Eurodollar
Loans hereunder or to assign its rights and obligations hereunder to another of
its branches or Affiliates, if, in the judgment of such Lender or Participant,
such designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 4.12 or 4.13, as the case may be, in the future and (ii)
would not subject such Lender or Participant to any unreimbursed cost or expense
and would not otherwise be disadvantageous to such Lender or Participant. The
Company agrees to pay all reasonable costs and expenses incurred by any Lender
or Participant in connection with any such designation or assignment.
(b) If any Lender or a Participant in such Lender's Loans requests
compensation under Section 4.12, or if the Company is required to pay any
additional amount to any Lender or a Participant in such Lender's Loans or any
Governmental Authority for the account of any Lender or Participant pursuant to
Section 4.13, then the Company shall have the right, at its sole expense, upon
notice to such Lender and the Administrative Agent, to require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 11.6), all its interests, rights and
obligations under this Agreement to an Eligible Assignee that shall assume such
obligations (which Eligible Assignee may be another Lender, if a Lender accepts
such assignment); provided that (i) the Company shall have received the prior
written consent of the Administrative Agent (and, if a Revolving Credit
Commitment is being assigned, the Issuing Bank and the Swing Line Lender) which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
Reimbursement Obligations, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the Eligible Assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Company (in the
case of all other amounts) and (iii) such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Company to require
such assignment and delegation cease to apply.
4.16 Investments of Funds in Cash Collateral Accounts. The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over each
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Cash Collateral Account. The Administrative Agent will, at the request of the
Company, invest amounts on deposit in each Cash Collateral Account in Cash
Equivalents; provided, however, that (a) the Administrative Agent shall not be
required to make any investment that, in its sole judgment, would require or
cause the Administrative Agent to violate any Requirement of Law or if an Event
of Default shall have occurred and be continuing, and (b) such Cash Equivalents
shall be subject to a first priority perfected security interest in favor of the
Administrative Agent. Other than any interest or profits earned on such
investments, funds deposited in the Cash Collateral Accounts shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
the respective Cash Collateral Accounts. The Administrative Agent shall have no
liability or responsibility to the Company for any losses resulting from
investments in Cash Equivalents. The Company hereby pledges and assigns to the
Administrative Agent, for the benefit of the Agents and the Lenders, each Cash
Collateral Account established hereunder (and all monies and investments held
therein) to secure the Obligations.
4.17 Merger Consideration; Dissenting Shares. The Company shall deposit the
cash portion of the Merger Consideration with the Exchange Agent (as defined in
the Recapitalization Agreement) in accordance with the terms of the
Recapitalization Agreement. In the event the cash portion of the Merger
Consideration is not held by the Exchange Agent or paid to holders of Shares
(including Dissenting Shares) in accordance with the Recapitalization Agreement
or Section 8.6(e), the Company shall immediately deposit the cash portion of the
Merger Consideration in a Cash Collateral Account.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Loans. The agreement of each Lender to make the
initial Loan requested to be made by it hereunder and of the Issuing Bank to
issue the initial Letter of Credit (if issued on the date of the initial Loan)
requested to be issued by it hereunder, is subject to the satisfaction,
immediately prior to the making of such Loan or the issuance of such Letter of
Credit of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received the
following Loan Documents, duly executed and delivered as required below:
(i) this Agreement, executed and delivered by a duly authorized officer
of the Company, with a counterpart for each Lender;
(ii) for the account of each of the Lenders which has requested a Note
pursuant to Section 4.1, a Revolving Credit Note, a Tranche A Term Note, a
Tranche B Term Note, or a Swing Line Note, as the case may be, each conforming
to the requirements hereof and executed and delivered by a duly authorized
officer of the Company;
(iii) the Guarantee and Collateral Agreement, executed and delivered by
a duly authorized officer of each party thereto (together with an acknowledgment
and consent from each of the issuers of stock pledged thereunder duly executed
and delivered by each of such issuers), with a counterpart or a conformed copy
for each Lender; and
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(iv) Mortgages executed and delivered by a duly authorized officer of
the applicable Loan Party with respect to each parcel of Initial Mortgaged Real
Property, with a counterpart or a conformed copy for each Lender.
(b) Proceeds of Issuance of Preferred Shares. The Administrative Agent
shall have received evidence satisfactory to it that the Company shall have
received at least $106,000,000 in cash proceeds from the issuance of the
Preferred Shares to the Equity Investors on terms and conditions and pursuant to
documentation reasonably satisfactory to the Agents.
(c) Recapitalization; Recapitalization Documents. The Recapitalization
Agreement shall be in full force and effect, and all conditions to the
Recapitalization contained in the Recapitalization Agreement shall have been
satisfied or complied with in all material respects on the terms set forth
therein and not waived in any material respect without the Administrative
Agent's consent. The Recapitalization Agreement and other documentation
(collectively, the "Recapitalization Documents") relating to the
Recapitalization shall be in full force and effect and no provision of such
documentation shall have been waived, amended, supplemented or otherwise
modified without the prior written consent of the Required Lenders. The
Administrative Agent shall have received certified copies of the
Recapitalization Documents (including all exhibits, schedules and disclosure
letters referred to therein or delivered pursuant thereto, if any) and all
amendments thereto, waivers relating thereto and other side letters or
agreements affecting the terms thereof in any respect. The Administrative Agent
shall have received evidence reasonably satisfactory to it that neither the
Company nor the Sponsor shall be in breach or violation of any of its
obligations under the Recapitalization Documents or the financing thereof, and
that neither the Company nor any of its Affiliates and Subsidiaries shall be
subject to contractual or other restrictions that would be violated by the
Recapitalization.
(d) Senior Subordinated Notes. The Company shall have entered into the
Senior Subordinated Note Indenture with respect to the issuance of the Senior
Subordinated Notes, which shall be reasonably satisfactory in form and substance
to the Lenders. The Administrative Agent shall have received evidence reasonably
satisfactory to it that on the Closing Date the Company shall receive cash
proceeds of at least $121,250,000 from the issuance of the Senior Subordinated
Notes.
(e) Filing of Merger Documents. The Administrative Agent shall have
received evidence reasonably satisfactory to it that the certificate of merger
with respect to the Merger shall have been filed with the Secretary of State of
the State of Delaware, and that the Merger shall have become effective in
accordance with the laws of the State of Delaware and the Recapitalization
Documents. The Administrative Agent shall have received evidence reasonably
satisfactory to it that on the Closing Date a certified photocopy of each of the
documents filed publicly with the Secretary of State of the State of Delaware by
Jupiter or the Company in connection with the Merger will be provided to it.
(f) Sponsor. The Administrative Agent shall have received evidence
reasonably satisfactory to it that, after giving effect to the Recapitalization,
the Sponsor and its Affiliates shall own at least 54% (on a fully diluted basis)
of the aggregate outstanding voting stock of the Company.
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(g) Purchase Price of Shares; Fees and Expenses. The Agents and the Lenders
shall have received evidence reasonably satisfactory to them that (i) the
aggregate purchase price for the Shares and related options to be purchased
pursuant to the Recapitalization Agreement shall not exceed $405,400,000, (ii)
the Surviving Indebtedness shall not exceed $1,000,000, (iii) the aggregate fees
and expenses of the Company in connection with the Recapitalization shall not
exceed $20,300,000 (the "Transaction Expenses"), and (iv) the aggregate
Indebtedness of the Company and its Subsidiaries on the Closing Date, after
giving effect to the Recapitalization, shall not exceed $221,000,000.
(h) Existing Indebtedness; Capitalization. The Administrative Agent shall
have received evidence reasonably satisfactory to it that all of the Existing
Indebtedness (except Surviving Indebtedness) of the Company and its Subsidiaries
shall have been repaid. The capitalization and structure of the Company and each
Subsidiary after the Recapitalization shall be reasonably satisfactory in all
respects to the Administrative Agent. The Administrative Agent shall have
received evidence reasonably satisfactory to it that (i) on the Closing Date,
after giving effect to the Recapitalization and the payment of Transaction
Expenses, the Available Revolving Credit Commitments will not be less than
$29,000,000 and (ii) the pro forma Leverage Ratio shall not exceed 5.20 to 1.00
(based on the Company's pro forma Total Debt and trailing twelve month EBITDA as
set forth in the Consolidated pro forma balance sheet of the Company and its
Subsidiaries and the related Consolidated pro forma statements of income and
cash flows of the Company and its Subsidiaries referred to in Section 6.1(b)).
(i) Fees. The Agents and BAS shall have received (or shall be reasonably
satisfied that they will receive, out of the proceeds of the initial Loans) all
fees required to be paid in connection with this Agreement, and all expenses
required to be paid in connection with the Credit Agreement for which invoices
have been presented, on or before the Closing Date. The Sponsor shall have
complied with all of its obligations under the Commitment Letter and Fee Letter.
(j) Governmental and Third Party Consents and Approvals. All governmental
and third party approvals and consents required in connection with the
Recapitalization, the financing contemplated hereby and the continuing
operations of the Company and its Subsidiaries shall have been obtained on terms
reasonably satisfactory to the Administrative Agent and shall be in full force
and effect, and all applicable waiting periods shall have expired without any
action being taken or threatened by any Governmental Authority or other
competent authority which would restrain, enjoin, prevent or otherwise impose
adverse conditions on the Recapitalization or the financing thereof. There shall
not exist any order, decree, judgment, ruling or injunction which restrains the
consummation of the transactions contemplated by the Loan Documents or the
Recapitalization Documents.
(k) Related Agreements. The Administrative Agent shall have received, with
a copy for each Lender, true and correct copies, certified as to authenticity by
the Company, of the Senior Subordinated Note Indenture and the Management
Agreement.
(l) Corporate Proceedings of the Loan Parties. The Administrative Agent
shall have received, with a photocopy for each Lender, a copy of the
resolutions, in form and substance
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reasonably satisfactory to the Administrative Agent, of the Board of Directors
(or other appropriate governing body) of each Loan Party authorizing, as
applicable, (i) the execution, delivery and performance of this Agreement, the
Notes and the other Loan Documents to which it is or will be a party, (ii) the
extensions of credit to such Loan Party (if any) contemplated hereunder and
(iii) the granting by it of the Liens to be created pursuant to the Security
Documents to which it is or will be a party, certified by the Secretary or an
Assistant Secretary of such Loan Party as of the Closing Date, which certificate
shall be in form and substance reasonably satisfactory to the Administrative
Agent and shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded and are in full force and effect.
(m) Incumbency Certificates of the Loan Parties. The Administrative Agent
shall have received, with a photocopy for each Lender, a certificate of each
Loan Party, dated the Closing Date, as to the incumbency and signature of the
officers of such Loan Party executing any Loan Document, reasonably satisfactory
in form and substance to the Administrative Agent, certified by the Secretary or
any Assistant Secretary of such Loan Party.
(n) Governing Documents. The Administrative Agent shall have received, with
a photocopy for each Lender, copies of the certificate or articles of
incorporation and by-laws (or other similar governing documents serving the same
purpose) of each Loan Party, certified as of the Closing Date as complete and
correct copies thereof by the Secretary or an Assistant Secretary of such Loan
Party.
(o) Closing Certificates. The Administrative Agent shall have received,
with a counterpart for each Lender, a certificate of the Company, dated the
Closing Date, substantially in the form of Exhibit F, with appropriate
insertions and attachments, reasonably satisfactory in form and substance to the
Administrative Agent.
(p) Solvency Certificate and Letter. The Lenders shall have received (i) a
solvency certificate of a Responsible Officer of the Company, substantially in
the form of Exhibit G, and (ii) a solvency opinion from Duff & Phelps, LLC,
substantially in the form of Exhibit H, addressed to the Administrative Agent
and each Lender and dated the Closing Date, in each case which shall document
the solvency of the Company and its Subsidiaries after giving effect to the
Recapitalization and the other transactions contemplated hereby and each of
which shall be reasonably satisfactory in form and substance to the Lenders.
(q) Legal Opinions. The Administrative Agent shall have received, with a
counterpart for each Lender, the following executed legal opinions:
(i) the executed legal opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, special counsel to the Sponsor and, subsequent to the Merger, the
Company and its Subsidiaries, substantially in the form of Exhibit I-1;
(ii) the executed legal opinion of Sonnenschein Nath & Rosenthal,
special counsel to the Company and its Subsidiaries, substantially in the
form of Exhibit I-2;
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(iii) the executed legal opinions of local counsel to the Company and
its Subsidiaries in the States of Indiana, New Jersey, and Florida,
substantially in the form of Exhibit I-3; and
(iv) the executed legal opinion of Stikeman, Elliott, special Canadian
counsel to the Administrative Agent, substantially in the form of Exhibit
I-4.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require. The Administrative Agent shall have received letters
entitling the Agents and the Lenders to rely upon the opinions delivered
pursuant to the Recapitalization Agreement.
(r) Pledged Stock; Stock Powers; Pledged Notes; Endorsements. The
Administrative Agent shall have received:
(i) the certificates representing the Pledged Stock under (and as
defined in) the Guarantee and Collateral Agreement, together with an
undated stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof; and
(ii) the promissory notes representing each of the Pledged Notes under
(and as defined in) the Guarantee and Collateral Agreement, duly endorsed
as required by the Guarantee and Collateral Agreement.
(s) Actions to Perfect Liens. The Administrative Agent shall have received
evidence in form and substance satisfactory to it that all filings, recordings,
registrations and other actions, including the filing of duly executed financing
statements on form UCC-1, necessary or, in the opinion of the Administrative
Agent, desirable to perfect the Liens created by the Security Documents shall
have been completed (or arrangements satisfactory to the Administrative Agent
for the prompt completion thereof shall have been made).
(t) Surveys. The Administrative Agent shall have received, and the title
insurance company issuing the policy referred to in Section 5.1(u) (the "Title
Insurance Company") shall have received, maps or plats of an as-built survey of
the sites of the property covered by each Mortgage delivered pursuant to Section
5.1(a)(iv) certified to the Administrative Agent and the Title Insurance Company
in a manner satisfactory to them, dated a date satisfactory to the
Administrative Agent and the Title Insurance Company by an independent
professional licensed land surveyor satisfactory to the Administrative Agent and
the Title Insurance Company, which maps or plats and the surveys on which they
are based shall be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and adopted by the
American Land Title Association and the American Congress on Surveying and
Mapping in 1997, and, without limiting the generality of the foregoing, there
shall be surveyed and shown on such maps, plats or surveys the following: (i)
the locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (ii) the lines of
streets abutting the sites and width thereof; (iii) all access and other
easements appurtenant to the sites or necessary or desirable to use the sites;
(iv) all roadways, paths, driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the site, whether
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recorded, apparent from a physical inspection of the sites or otherwise known to
the surveyor; (v) any encroachments on any adjoining property by the building
structures and improvements on the sites; and (vi) if the site is described as
being on a filed map, a legend relating the survey to said map.
(u) Title Insurance Policy. The Administrative Agent shall have received in
respect of each parcel covered by each Mortgage delivered pursuant to Section
5.1(a)(iv) a mortgagee's title policy (or policies) or marked up unconditional
binder for such insurance dated the Closing Date. Each such policy shall (i) be
in an amount reasonably satisfactory to the Administrative Agent; (ii) be issued
at ordinary rates; (iii) insure that the Mortgage insured thereby creates a
valid first Lien on such parcel free and clear of all defects and encumbrances,
except as may be permitted by Section 8.3(e) and such as may be approved by the
Administrative Agent in its reasonable discretion; (iv) name the Administrative
Agent for the benefit of the Agents and the Lenders as the insured thereunder;
(v) contain such authorized endorsements and affirmative coverage as the
Administrative Agent may reasonably request and (vi) be issued by title
companies reasonably satisfactory to the Administrative Agent (including any
such title companies acting as co-insurers or reinsurers, at the option of the
Administrative Agent). The Administrative Agent shall have received evidence
reasonably satisfactory to it that all premiums in respect of each such policy,
and all charges for mortgage recording tax, if any, have been paid.
(v) Flood Insurance. If requested by the Administrative Agent, the
Administrative Agent shall have received (with respect to any real property
subject to a Mortgage which is located within a flood zone shown on the
appropriate maps of the Federal Emergency Management Agency) (i) a policy of
flood insurance which (A) covers any parcel of improved real property which is
encumbered by any Mortgage delivered pursuant to Section 5.1(a)(iv), (B) is
written in an amount not less than the outstanding principal amount of the
indebtedness secured by such Mortgage which is reasonably allocable to such real
property or the maximum limit of coverage made available with respect to the
particular type of property under the National Flood Insurance Act of 1968,
whichever is less, and (C) has a term ending not earlier than the maturity of
the indebtedness secured by such Mortgage and (ii) confirmation that the Company
has received the notice required pursuant to Subpart B Section 208.25 of
Regulation H of the Board of Governors of the Federal Reserve System.
(w) Copies of Documents. The Administrative Agent shall have received a
copy of all recorded documents referred to, or listed as exceptions to title in,
the title policy or policies referred to in Section 5.1(u) and a copy, certified
by such parties as the Administrative Agent may reasonably deem appropriate, of
all other documents affecting the property covered by each Mortgage delivered
pursuant to Section 5.1(a)(iv).
(x) Lien Searches. The Administrative Agent shall have received the results
of a recent search (conducted no earlier than forty-five days prior to the
Closing Date) by a Person reasonably satisfactory to the Administrative Agent,
of the Uniform Commercial Code, judgment and tax lien filings which may have
been filed with respect to personal property of the Loan Parties, and the
results of such search shall be satisfactory to the Administrative Agent.
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(y) Insurance. The Administrative Agent shall have received evidence in
form and substance satisfactory to it that all of the requirements of Section
7.5 of this Agreement with respect to insurance, Section 5.3 of the Guarantee
and Collateral Agreement and of Section 4.2 of each of the Mortgages shall have
been satisfied.
(z) Environmental Assessments. The Administrative Agent shall have received
one or more environmental assessments, in form and substance reasonably
satisfactory to it, concerning environmental compliance and liability issues
affecting the Company and its Subsidiaries, and, from each consulting firm that
prepared such assessments, written authorization allowing the Administrative
Agent and the Lenders to rely on such assessments as if prepared for and
addressed to them.
(aa) Landlord Waivers. The Administrative Agent shall have received a
Landlord Waiver duly executed by each landlord under each lease of real property
by the Company or any Subsidiary.
(bb) Regulations of the Board of Governors of the Federal Reserve System.
The Lenders shall be satisfied that the making of the Loans will not violate
Regulation T, Regulation U or Regulation X.
(cc) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably satisfactory in form and substance to the Administrative Agent,
and the Administrative Agent shall have received such other documents and legal
opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request.
5.2 Conditions to Each Extension of Credit. The agreement of each Lender to
make any Loan requested to be made by it on any date (including its initial
Loan), and of the Issuing Bank to issue any Letter of Credit requested to be
issued by it on any date (including the initial Letter of Credit), is subject to
the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Company or any other Loan Party in or pursuant to any of
the Loan Documents shall be true and correct in all material respects on and as
of such date as if made on and as of such date (other than any such
representations and warranties that, by their terms, expressly refer to a
specific date other than the date of the making of such Loan or the date of
issuance of such Letter of Credit, in which case such representations and
warranties shall be true and correct on and as of such specific date).
(b) No Default. No Default or Event of Default shall have occurred and be
continuing on such date, or would result from such Loan or the issuance of such
Letter of Credit or from the application of the proceeds therefrom.
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Each borrowing of a Loan and each issuance of a Letter of Credit shall
constitute a representation and warranty by the Company as of the date thereof
that all of the conditions contained in this Section 5.2 have been satisfied.
SECTION 6. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and to
induce the Lenders to make their extensions of credit hereunder, the Company
hereby represents and warrants to the Administrative Agent and each Lender that:
6.1 Financial Condition. (a) The Consolidated balance sheet of the Company
and its Consolidated Subsidiaries as at November 30, 1998, and the related
Consolidated statements of earnings and of cash flows for the fiscal year ended
on such date, reported on by PricewaterhouseCoopers LLP, copies of which have
heretofore been furnished to each Lender, present fairly the Consolidated
financial condition of the Company and its Consolidated Subsidiaries as at such
date, and the Consolidated results of their operations and their Consolidated
cash flows for the fiscal year then ended. The unaudited Consolidated and
consolidating balance sheet of the Company and its Consolidated Subsidiaries as
at May 31, 1999, and the related unaudited Consolidated and consolidating
statements of earnings and of cash flows for the six-month period ended on such
date, certified by a Responsible Officer, copies of which have heretofore been
furnished to each Lender, present fairly the Consolidated and consolidating
financial condition of the Company and its Consolidated Subsidiaries as at such
date, and the Consolidated and consolidating results of their operations and
their Consolidated and consolidating cash flows for the six-month period then
ended (subject to normal year-end audit adjustments and the absence of
footnotes). All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved as required by GAAP (except as approved by such
accountants or Responsible Officer, as the case may be, and as disclosed
therein). Neither the Company nor any of its Consolidated Subsidiaries had, at
the date of the most recent balance sheet referred to above, any material
Guarantee Obligation, contingent liability or liability for taxes, or any
long-term lease or unusual forward or long-term commitment, including any Hedge
Agreement, which is not reflected in the foregoing statements or in the notes
thereto. Except as set forth in Schedule 6.1, during the period from November
30, 1998, to and including the date hereof there has been no sale, transfer or
other disposition by the Company or any of its Consolidated Subsidiaries of any
material part of its business or property and no purchase or other acquisition
of any business or property (including any Capital Stock of any other Person)
material in relation to the Consolidated financial condition of the Company and
its Consolidated Subsidiaries at November 30, 1998.
(b) The Consolidated and consolidating pro forma balance sheets of the
Company and its Subsidiaries as at May 31, 1999, and the related Consolidated
and consolidating pro forma statements of income of the Company and its
Subsidiaries for the twelve months then ended, certified by a Responsible
Officer of the Company, copies of which have been furnished to each Lender,
fairly present the Consolidated and consolidating pro forma financial condition
of the Company and its Subsidiaries as at such date and the Consolidated and
consolidating pro forma results of operations of the Company and its
Subsidiaries for the period ended on such date, in
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each case giving effect to the Recapitalization and the other transactions
contemplated by the Recapitalization Documents, all prepared in accordance with
the requirements of Regulation S-X under the Securities Act applicable to a
registration statement under the Securities Act on Form S-1.
6.2 No Change; Solvency. Since November 30, 1998, there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect. During the period from November 30, 1998, to and
including the date hereof, except as provided in and pursuant to the
Recapitalization Documents and except as set forth in Schedule 6.2, no dividends
or other distributions have been declared, paid or made upon the Capital Stock
of the Company or any of its Subsidiaries nor has any of the Capital Stock of
the Company or any of its Subsidiaries been redeemed, retired, purchased or
otherwise acquired for value by the Company or any of its Subsidiaries. As of
the Closing Date, after giving effect to the transactions contemplated by the
Loan Documents and the Recapitalization Documents, and as of each Borrowing
Date, the Company and its Subsidiaries will be Solvent on a Consolidated basis.
6.3 Corporate Existence; Compliance with Law. The Company and each of its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the corporate power
and authority (including all governmental licenses, permits and other
approvals), and the legal right, to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
except to the extent its failure to be so qualified and/or in good standing
could not reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
6.4 Corporate Power; Authorization; Enforceable Obligations. The Company
has the corporate power and authority, and the legal right, to execute, deliver
and perform the Loan Documents to which it is a party and to borrow hereunder
and has taken all necessary corporate action to authorize the borrowings on the
terms and conditions of this Agreement and Notes and to authorize the execution,
delivery and performance of the Loan Documents to which it is a party. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Loan Documents other than filings
and recordings to perfect the Liens created by the Security Documents. This
Agreement has been, and each other Loan Document to which it is a party will be,
duly executed and delivered on behalf of the Company. This Agreement
constitutes, and each other Loan Document to which it is a party when executed
and delivered will constitute, a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, subject to
the effects of bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and general
equitable principles (whether considered in a proceeding in equity or at law).
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6.5 No Legal Bar. The execution, delivery and performance of the Loan
Documents, the borrowings of the Loans and the issuance of Letters of Credit
hereunder and the use of the proceeds thereof will not violate or create a
default under any Requirement of Law or Contractual Obligation of the Company or
of any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien, except pursuant to the Security Documents, on any of its
or their respective properties or revenues pursuant to any such Requirement of
Law or Contractual Obligation. The Recapitalization and the Recapitalization
Documents comply with all applicable Requirements of Law.
6.6 No Material Litigation. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Company, threatened by or against the Company or any of its
Subsidiaries or against any of its or their respective properties or revenues
(a) with respect to any of the Loan Documents or Recapitalization Documents or
any of the transactions contemplated hereby or thereby except as disclosed on
Schedule 6.6 or (b) which could reasonably be expected to have a Material
Adverse Effect.
6.7 Labor Controversy; Material Events. (a) Except as disclosed on Schedule
6.7, there are no collective bargaining agreements covering the Company or any
of its Subsidiaries as of the Closing Date. There are no strikes, work
stoppages, lockouts or other labor disputes against the Company or any of its
Subsidiaries pending or, to the knowledge of the Company, threatened that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. The hours worked by and payments made to employees of
the Company and its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters that (individually or in the aggregate) could reasonably be expected to
have a Material Adverse Effect. All material payments due from the Company or
any of its Subsidiaries on account of employee health and welfare insurance have
been paid or accrued as a liability on the books of the Company or the relevant
Subsidiary.
(b) Neither the business nor any of the properties of the Company or any
Subsidiary are affected by any fire, accident, explosion, drought, storm, hail,
embargo, earthquake, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
6.8 No Default. Neither the Company nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
6.9 Ownership of Property; Liens. The Company and each of its Subsidiaries
has good record and marketable title in fee simple to, or a valid leasehold
interest in, all its real property, and good title to, or a valid leasehold
interest in, all its other property, and none of such property is subject to any
Lien except as permitted by Section 8.3. Schedule 6.9 sets forth a true and
complete list of all real property owned or leased by the Company and its
Subsidiaries as of the date hereof.
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6.10 Intellectual Property. The Company and each of its Subsidiaries owns,
or is licensed to use, all trademarks, trade names, patents, copyrights,
technology, know-how and processes necessary for the conduct of its business as
currently conducted (the "Intellectual Property") except where the failure to
own or have such legal right to use could not in the aggregate reasonably be
expected to have a Material Adverse Effect. No claim has been asserted and is
pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does the Company know of any valid basis for any such claim except
for such claims that in the aggregate could not reasonably be expected to have a
Material Adverse Effect. The use of such Intellectual Property by the Company
and its Subsidiaries does not infringe on the rights of any Person, except for
such claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. All U.S., federal and state and all
foreign registrations of and applications for Intellectual Property, and all
unregistered Intellectual Property material to the business of the Company and
its Subsidiaries, which is owned by the Company or any Subsidiary on the Closing
Date, is described on Schedule 6.10.
6.11 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation of the Company or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
6.12 Taxes. The Company and each of its Subsidiaries has filed or caused to
be filed all tax returns which are required to be filed and has paid all taxes
shown to be due and payable on said returns and all other taxes, fees or other
charges imposed on it or any of its property by any Governmental Authority
(other than any such taxes, fees and other charges, the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of the Company or its Subsidiaries, as the case may be); no tax Lien
(other than immaterial tax Liens for unpaid property taxes) has been filed, and
no material claim is being asserted, with respect to any such tax, fee or other
charge (except to the extent being contested in good faith and with respect to
which reserves in conformity with GAAP have been provided on the books of the
Company or its Subsidiaries, as the case may be). No material federal income tax
liabilities have been assessed against the Company and its Subsidiaries as a
result of any audit completed by the Internal Revenue Service.
6.13 Federal Regulations. No part of the proceeds of any Loan or any
drawing under any Letter of Credit will be used for "purchasing" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U or to extend credit to others for the purpose of purchasing
or carrying any margin stock. The Company is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock. If
requested by any Lender or the Administrative Agent, the Company will furnish to
the Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in said Regulation
U, as the case may be.
6.14 ERISA. All Plans of the Company and its Subsidiaries on the Closing
Date are described on Schedule 6.14. Neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has
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occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan and each Plan has
complied in all material respects with the applicable provisions of ERISA and
the Code. No termination of a Single Employer Plan has occurred, and no Lien in
favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither the Company nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither the
Company nor any Commonly Controlled Entity would become subject to any liability
under ERISA which would have a Material Adverse Effect if the Company or any
such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the date on
which this representation is made or deemed made. No such Multiemployer Plan is
in Reorganization or Insolvent.
6.15 Investment Company Act; Other Regulations. Neither the Company nor any
of its Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. Neither the Company nor any of its Subsidiaries is subject to
regulation under any Federal or State statute or regulation (other than
Regulation X) which limits its ability to incur Indebtedness.
6.16 Subsidiaries. Schedule 6.16 sets forth a complete and accurate list of
all Subsidiaries of the Company on the date hereof, showing as of the date
hereof (as to each such Subsidiary), both before and after giving effect to the
Recapitalization, the jurisdiction of its incorporation, the number of shares of
each class of its Capital Stock authorized, and the number of shares
outstanding, and the percentage of each such class of its Capital Stock owned
(directly or indirectly) by the Company or any of its Subsidiaries and the
number of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the date hereof. All of the
outstanding Capital Stock of the Subsidiaries has been validly issued, is fully
paid and non-assessable. All of the Capital Stock of the Subsidiaries owned by
the Company or one or more of its Subsidiaries is owned free and clear of all
Liens, except those created under the Security Documents.
6.17 Purpose of Loans. The proceeds of the Loans shall be used by the
Company (i) in the case of the Term Loans, to pay cash consideration to the
holders of outstanding Shares (and related options), including holders of
Dissenting Shares, in accordance with the Recapitalization Agreement and to pay
Transaction Expenses, and (ii) in the case of the Revolving Credit Loans and
Swing Line Loans, to (A) pay cash consideration to the holders of outstanding
Shares (and related options), including holders of Dissenting Shares, in
accordance with the Recapitalization Agreement and to pay Transaction Expenses
and (B) finance the working capital needs and general corporate purposes
(including Permitted Acquisitions) of the Company and its Subsidiaries in the
ordinary course of business and to repay Existing Indebtedness (other than
Surviving Indebtedness).
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6.18 Environmental Matters. Except as set forth in Schedule 6.18:
(a) The facilities and properties owned, leased or operated by the Company
or any of its Subsidiaries (the "Properties") do not contain any Materials of
Environmental Concern in amounts or concentrations which (i) constitute a
violation of, or (ii) could reasonably be expected to give rise to liability
under, any applicable Environmental Law, except in either case insofar as such
violation or liability, or any aggregation thereof, is not reasonably likely to
result in a Material Adverse Effect.
(b) The Properties and all operations at the Properties are in compliance
in all material respects with all applicable Environmental Laws, and there is no
contamination at or under the Properties or violation of any applicable
Environmental Law with respect to the Properties or the business operated by the
Company or any of its Subsidiaries (the "Business") which is reasonably likely
to result in a Material Adverse Effect.
(c) Neither the Company nor any of its Subsidiaries has received any
written notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business, nor
does the Company have knowledge that any such notice will be received or is
being threatened except insofar as such notice or threatened notice, or any
aggregation thereof, does not involve a matter or matters reasonably likely to
result in a Material Adverse Effect.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
which would be expected to give rise to liability under, any applicable
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the Properties
in violation of, or in a manner that could reasonably be expected to give rise
to liability under, any applicable Environmental Law except insofar as such
transportation, disposal, generation, treatment or storage, individually or in
the aggregate, is not reasonably likely to result in a Material Adverse Effect.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Company, threatened, under any Environmental
Law to which the Company or any Subsidiary is or to the Company's knowledge will
be named as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or the
Business, nor has the Company or any of its Subsidiaries assumed or retained, by
contract or, to the best knowledge of the Company, by operation of law, any
liabilities of any kind under any Environmental Law or with respect to any
Materials of Environmental Concern except insofar as such proceeding, action,
decree, order, requirement, assumption or retention, individually or in the
aggregate, is not reasonably likely to result in a Material Adverse Effect.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of the Company or
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any of its Subsidiaries in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a manner that
could give rise to liability under applicable Environmental Laws except insofar
as such release or threat of release is not reasonably likely to result in a
Material Adverse Effect.
6.19 Regulation H. No Mortgage (other than the Mortgage covering real
property in Bridgeport, New Jersey) encumbers improved real property which is
located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968.
6.20 No Material Misstatements. The Information Memorandum furnished by or
on behalf of the Company does not contain any material misstatement of fact and
does not omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The written information, reports, financial statements,
certificates, exhibits and schedules delivered by or on behalf of the Company or
any other Loan Party to the Administrative Agent and/or the Lenders pursuant to
the terms of any Loan Document will not contain any material misstatement of
fact and will not omit to state any material fact necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading. It is understood that no representation or warranty is made
concerning the forecasts, estimates, pro forma projections and statements as to
anticipated future performance or conditions (the "Projections"), and the
assumptions on which they were based, contained in any such information,
reports, financial statements, exhibits or schedules, except that, as of the
date such Projections were generated, (a) such Projections were based on the
good faith assumptions of the management of the Company, and (b) the assumptions
on which the Projections were based were believed by such management to be
reasonable.
6.21 Representations and Warranties Contained in the Recapitalization
Documents. All of the Recapitalization Documents have been duly executed and
delivered by each of the parties thereto. As of the Closing Date, the
representations and warranties of each of the Loan Parties contained in the
Recapitalization Documents (after giving effect to any amendments, supplements,
waivers or other modifications of such Recapitalization Documents prior to such
Closing Date in accordance with this Agreement) will be true and correct in all
material respects except as otherwise disclosed to the Lenders in writing prior
to the date hereof.
6.22 Ownership of the Company. Schedule 6.22 sets forth the number of
shares of the Capital Stock of the Company, and the type thereof, to be owned by
the Sponsor on the Closing Date.
6.23 Collateral. The provisions of each of the Security Documents, when
executed and delivered, will create in favor of the Administrative Agent for the
ratable benefit of the Agents and the Lenders, a legal, valid and enforceable
security interest in and Lien on all right, title, and interest of the Company
or any of the other Loan Parties which is a party to such Security Document, as
the case may be, in the Collateral described in such Security Document. When the
Security Documents have been executed and when financing statements have been
filed in the offices in the jurisdictions listed in Schedule 3 to the Guarantee
and Collateral Agreement, when
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appropriate filings have been recorded in the jurisdictions listed in Schedule 3
to the Guarantee and Collateral Agreement with respect to the Intellectual
Property, when possession of the Pledged Notes and Pledged Stock (as such terms
are defined in the Guarantee and Collateral Agreement) have been delivered to
the Administrative Agent, and when each of the Mortgages shall have been
recorded in the appropriate recording office, except as otherwise provided in
the Security Documents, each of the Security Documents shall create a perfected
security interest in and Lien on all right, title and interest of the Company or
such other Loan Parties, as the case may be, in the Collateral described therein
(other than the two utility patents registered in Taiwan that are owned by Indy
Lighting, Inc.), and except for (a) Liens permitted by Section 8.3 which arise
and have priority over the Liens on the Collateral by operation of law and (b)
Liens (other than with respect to the Pledged Stock and Pledged Notes) described
in Sections 8.3(e), (f), (g), (h) and (i), a perfected first Lien on all right,
title and interest of the Company or such other Loan Parties, as the case may
be, in the Collateral described in each Security Document.
6.24 Senior Debt; No Other Designated Senior Debt. The Obligations
constitute "Senior Debt" and "Designated Senior Debt" under and as defined in
the Senior Subordinated Note Indenture and in any other Subordinated Debt
Documentation. No other Indebtedness of the Company or any Subsidiary
constitutes or has been designated as "Designated Senior Debt" under and as
defined in the Senior Subordinated Note Indenture or any other Subordinated Debt
Documentation.
6.25 Year 2000 Compliance. The Company has (a) initiated a review and
assessment of all areas within its and each of its Subsidiaries' business and
operations (including those affected by suppliers and vendors) that could be
materially and adversely affected by the "Year 2000 Problem" (that is, the risk
that computer applications used by the Company or any of its Subsidiaries (or
suppliers and vendors) may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and any date after December
31, 1999), (b) developed a plan and timeline for addressing the Year 2000
Problem on a timely basis and (c) to date, implemented that plan in accordance
with that timetable. Based on the foregoing, the Company believes that all
computer applications (including those of its suppliers and vendors) that are
material to its or any of its Subsidiaries' business and operations are
reasonably expected on a timely basis to be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000 (that
is, be "Year 2000 Compliant"), except to the extent that a failure to do so
could not reasonably be expected to have a Material Adverse Effect.
6.26 Material Contracts. Schedule 6.26 hereto sets forth as of the Closing
Date a complete and accurate list of all Material Contracts of the Company and
its Subsidiaries, showing the parties, subject matter and term thereof. Each
such Material Contract has been duly authorized, executed and delivered by all
parties thereto, has not been amended or otherwise modified, is in full force
and effect and is binding upon and enforceable against all parties thereto in
accordance with its terms, and there exists no default under any Material
Contract by any party thereto.
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SECTION 7. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments remain in effect
or any Letter of Credit remains outstanding and unpaid or any amount is owing to
any Lender or the Administrative Agent hereunder or under any other Loan
Document, the Company shall and (except in the case of delivery of financial
information, reports and notices in respect of the Company) shall cause each of
its Subsidiaries to:
7.1 Financial Statements. Furnish to the Administrative Agent, with a copy
for each Lender:
(a) as soon as available, but in any event within 90 days after the end of
each fiscal year of the Company, a copy of the Consolidated and consolidating
balance sheets of the Company and its Consolidated Subsidiaries as at the end of
such year and the related Consolidated and consolidating statements of earnings
and of cash flows for such year, setting forth in each case in comparative form
the figures for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by PricewaterhouseCoopers LLP or other independent certified public
accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45 days after the
end of each of the first three quarterly periods of each fiscal year of the
Company, the unaudited Consolidated and consolidating balance sheets of the
Company and its Consolidated Subsidiaries as at the end of such quarter and the
related unaudited Consolidated and consolidating statements of earnings and of
cash flows of the Company and its Consolidated Subsidiaries for such quarter and
the portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments and the absence of footnotes);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
(except, in the case of any such unaudited financial statements, for normal
year-end audit adjustments and the absence of footnotes).
7.2 Certificates; Other Information. Furnish to the Administrative Agent,
with a copy for each Lender:
(a) concurrently with the delivery of the financial statements referred to
in Section 7.1(a), a compliance certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to
in Sections 7.1(a) and (b), a Compliance Certificate of a Responsible Officer,
substantially in the
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form of Exhibit K, (i) stating that during such period (A) no Subsidiary has
been formed or acquired (or, if any such Subsidiary has been formed or acquired,
the Company has complied with the requirements of Section 7.10 with respect
thereto), (B) neither the Company nor any of its Subsidiaries has changed its
name, its principal place of business, its chief executive office or the
location of any material item of tangible Collateral without complying with the
requirements of this Agreement and the Security Documents with respect thereto
and (C) the Company has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and the
other Loan Documents to be observed, performed or satisfied by it, and that no
Default or Event of Default has occurred and is continuing except as specified
in such certificate, (ii) setting forth in reasonable detail the calculations
required to determine (A) compliance with Section 8.1, (B) the Applicable
Percentages then in effect for the Loans, the Letter of Credit fee pursuant to
Section 2.6(b), and the commitment fee pursuant to Section 4.7(a) and (C) in the
case of the Compliance Certificate delivered in connection with the financial
statements delivered pursuant to Section 7.1(a), the Excess Cash Flow for the
relevant fiscal year and (iii) stating whether, since the date of the most
recent financial statements delivered to the Administrative Agent hereunder,
there has been any material change in GAAP in the preparation of the financial
statements of the Company and its Subsidiaries and, if so, describing such
change;
(c) promptly after approval by the Board of Directors of the Company, but
in any event not later than thirty days after the end of each fiscal year of the
Company, a copy of the projections by the Company of the operating budget and
cash flow budget of the Company and its Subsidiaries for the succeeding fiscal
year, such projections to be accompanied by a certificate of a Responsible
Officer to the effect that such projections have been prepared on the basis of
sound financial planning practice and that such Responsible Officer has no
reason to believe they are incorrect or misleading in any material respect;
(d) concurrently with the delivery of the financial statements referred to
in Section 7.1(a), a comparison (with a discussion of material differences) in
reasonable detail of the revenues and expenses of the Company and its
Subsidiaries, on a divisional basis, and EBITDA for the Company and its
Subsidiaries on a Consolidated basis for the period covered by the financial
statements to the budgeted results for such period delivered to the Lenders
prior to the Closing Date or after the Closing Date, pursuant to paragraph (c)
above;
(e) within fifteen days after the same are sent, copies of all financial
statements and reports which the Company sends to its stockholders, and within
five days after the same are filed, copies of all financial statements and
reports which the Company may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
(f) within five days after receipt thereof, a copy of any report or
"management letter" submitted by independent accountants to the Company or any
Subsidiary in connection with any annual, interim or special audit of the books
of such Person; and
(g) as soon as practicable, such additional financial and other information
as any Lender may from time to time reasonably request.
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7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Company and its Subsidiaries.
7.4 Conduct of Business and Maintenance of Existence. Continue to (a)
engage in businesses of the same general type as the businesses in which the
Company and its Subsidiaries are engaged on the date hereof and (b) preserve,
renew and keep in full force and effect its corporate existence and maintain all
rights, privileges and franchises necessary or desirable in the normal conduct
of its business except as otherwise permitted pursuant to Section 8.5; comply
with all Contractual Obligations and Requirements of Law except to the extent
that failure to comply therewith could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in good working order and condition (ordinary wear and
tear excepted); maintain with financially sound and reputable insurance
companies insurance on all its other property in at least such amounts and
against at least such risks (but including in any event public general
liability, product liability and business interruption) as usually insured
against in the same general area by companies engaged in the same or a similar
business and furnish to each Lender, upon written request, information in full
detail as to the insurance carried.
7.6 Inspection of Property; Books and Records; Discussions. Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all material Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of any Lender (at such Lender's expense) to visit and inspect
any of its properties and examine and make abstracts from any of its books and
records at any reasonable time during normal business hours and upon reasonable
notice and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Company and its
Subsidiaries with officers and employees of the Company and its Subsidiaries and
with its independent certified public accountants; provided, however, that each
Lender shall coordinate all such visits and inspections with the Administrative
Agent.
7.7 Notices. Promptly give notice to the Administrative Agent, with a copy
for each Lender, of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual Obligation of
the Company or any of its Subsidiaries or (ii) litigation, investigation or
proceeding which may exist at any time between the Company or any of its
Subsidiaries and any Governmental Authority, which in either case could
reasonably be expected to have a Material Adverse Effect;
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(c) any litigation or proceeding affecting the Company or any of its
Subsidiaries in which the amount involved is $2,000,000 or more and not covered
by insurance or in which injunctive or similar relief is sought which, if
granted, could reasonably be expected to have a Material Adverse Effect;
(d) any of the following events where, individually or in the aggregate
with any other events, the liability that could result would exceed $750,000, as
soon as possible and in any event within thirty days after the Company knows or
has reason to know thereof: (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan
or any withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of any
other action by the PBGC or the Company or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan; and
(e) any development or event which could reasonably be expected to have a
Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer of the Company setting forth details of the occurrence
referred to therein and stating what action the Company proposes to take with
respect thereto.
7.8 Environmental Laws. (a) Comply with, and use reasonable efforts to
ensure compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply with and maintain, and use reasonable
efforts to ensure that all tenants and subtenants obtain and comply with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
(b) Conduct and complete all material investigations, studies, sampling and
testing, and all remedial, removal and other actions required under applicable
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws except, in each case,
to the extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not reasonably be
expected to have a Material Adverse Effect.
7.9 Further Assurances. Upon the request of the Administrative Agent,
promptly perform or cause to be performed any and all acts and execute or cause
to be executed any and all documents (including, without limitation, financing
statements and continuation statements) for filing under the provisions of the
Uniform Commercial Code or any other Requirement of Law which are necessary or
advisable to maintain in favor of the Administrative Agent, for the benefit of
the Agents and the Lenders, Liens on the Collateral that are duly perfected in
accordance with all applicable Requirements of Law.
7.10 Additional Collateral. (a) With respect to any assets, other than
leasehold interests, acquired after the Closing Date by the Company or any of
its Domestic Subsidiaries
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that are not subject to the Liens created by any of the Security Documents
(other than any assets described in paragraph (b) or (c) of this Section),
promptly (and in any event within twenty days after the acquisition thereof or,
in the case of the execution and delivery of a Mortgage and the related
documentation required below with respect to real property, within ninety days
after the acquisition of such real property): (i) execute and deliver to the
Administrative Agent such amendments to the relevant Security Documents or such
other documents (including the Mortgages) as the Administrative Agent shall deem
necessary or advisable to grant to the Administrative Agent, for the benefit of
itself and the Lenders, a Lien on such assets, (ii) take all actions necessary
or advisable to cause such Lien to be duly perfected in accordance with all
applicable Requirements of Law as contemplated by such Security Documents,
including the filing of financing statements in such jurisdictions as may be
requested by the Administrative Agent, (iii) in the case of a Mortgage, deliver
to the Administrative Agent such surveys, policies and other documents as the
Administrative Agent would have received pursuant to Sections 5.1(t), 5.1(u),
5.1(v) and 5.1(w) if the relevant parcel of real property has been subject to a
Mortgage on the Closing Date, all in form and substance reasonably satisfactory
to the Administrative Agent and (iv) if reasonably requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described in clauses (i) and (ii) immediately preceding,
which opinions shall be in form and substance, and from counsel, satisfactory to
the Administrative Agent.
(b) With respect to any Person that, subsequent to the Closing Date,
becomes a Subsidiary (other than a Foreign Subsidiary), promptly (and in any
event within twenty days after such Person becomes a Subsidiary or, in the case
of the execution and delivery of a Mortgage and the related documentation
required below with respect to real property, within ninety days after such
Person becomes a Subsidiary): (i) execute and deliver to the Administrative
Agent, for the benefit of itself and the Lenders, a new pledge agreement or such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
shall deem necessary or advisable to grant to the Administrative Agent, for the
benefit of itself and the Lenders, a Lien on the Capital Stock of such
Subsidiary which is owned by the Company or any of its Subsidiaries, (ii)
deliver to the Administrative Agent the certificates (if any) representing such
Capital Stock, together with undated stock powers executed and delivered in
blank by a duly authorized officer of the Company or such Subsidiary, as the
case may be, (iii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement pursuant to an annex to the Guarantee and
Collateral Agreement which is in form and substance reasonably satisfactory to
the Administrative Agent, (B) to execute and deliver a Mortgage with respect to
any parcel of real property owned by it, (C) to take all actions necessary or
advisable to cause the Lien created by the Guarantee and Collateral Agreement or
any such Mortgage to be duly perfected in accordance with all applicable
Requirements of Law as contemplated by such Security Documents, including the
filing of financing statements in such jurisdictions as may be requested by the
Administrative Agent and (D) to execute and deliver such documents and
certificates as the Administrative Agent or its counsel may request relating to
the organization, existence and good standing of such Subsidiary, the
authorization of the transactions contemplated hereby and by the other Loan
Documents relating to such Subsidiary and any other legal matters relating to
such Subsidiary and the Loan Documents to which it is or is to become a party
(including, if requested by the Administrative Agent, satisfactory environmental
reports or assessments with respect to each parcel of real property covered by a
Mortgage), all in form and
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substance reasonably satisfactory to the Administrative Agent and its counsel,
(iv) in the case of a Mortgage, deliver to the Administrative Agent such
surveys, policies and other documents as the Administrative Agent would have
received pursuant to Sections 5.1(t), 5.1(u), 5.1(v) and 5.1(w) if the relevant
parcel of real property has been subject to a Mortgage on the Closing Date, all
in form and substance reasonably satisfactory to the Administrative Agent and
(v) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described in clauses (i), (ii) and
(iii) immediately preceding, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Administrative Agent.
(c) With respect to any Person that, subsequent to the Closing Date,
becomes a Foreign Subsidiary, promptly (and in any event within twenty days
after such Person becomes a Foreign Subsidiary): (i) execute and deliver to the
Administrative Agent a new pledge agreement or such amendments to the Guarantee
and Collateral Agreement as the Administrative Agent shall deem necessary or
advisable to grant to the Administrative Agent, for the benefit of itself and
the Lenders, a Lien on the Capital Stock of such Subsidiary which is owned by
the Company or any of its Subsidiaries (provided that in no event shall more
than 65% of the Capital Stock of any such Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent any certificates representing
such Capital Stock, together with undated stock powers executed and delivered in
blank by a duly authorized officer of the Company or such Subsidiary, as the
case may be, and take or cause to be taken all such other actions under the law
of the jurisdiction of organization of such Foreign Subsidiary as may be
necessary or advisable to perfect such Lien on such Capital Stock and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described in clauses (i) and (ii) immediately
preceding, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(d) Notwithstanding anything to the contrary contained in clauses (a) and
(b) of this Section 7.10, the Company and its Subsidiaries shall not be required
to (i) execute and deliver Mortgages and related documents pursuant to such
clauses unless (A) with respect to a particular parcel of real property, its
fair market value exceeds $2,000,000, (B) with respect to parcels of real
property as to which Mortgages are not required pursuant to clause (A) above,
the aggregate fair market value of all such parcels (including the Norcross,
Georgia property) exceeds $6,000,000, or (C) an Event of Default exists, and
(ii) perfect the security interest of the Administrative Agent on vehicles by
notation of such security interest on certificates of title, except as specified
in Section 5.15 of the Guarantee and Collateral Agreement.
7.11 Year 2000 Compliance. Promptly notify the Administrative Agent in the
event the Company discovers or determines that any computer application
(including those of its suppliers and vendors) that is material to any of its
Subsidiaries' business and operations will not be Year 2000 Compliant, except to
the extent that such failure could not reasonably be expected to have a Material
Adverse Effect.
SECTION 8. NEGATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments remain in effect
or any Letter of Credit remains outstanding and unpaid or any amount is owing to
any Lender or the
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<PAGE> 77
Administrative Agent hereunder or under any other Loan Document, the Company
shall not, and (except with respect to Section 8.1) shall not permit any of its
Subsidiaries to, directly or indirectly:
8.1 Financial Condition Covenants.
(a) Interest Coverage Ratio. Permit, at the last day of any fiscal quarter
of the Company ending during any test period set forth below, the Interest
Coverage Ratio to be less than the ratio set forth opposite such test period
below:
<TABLE>
<CAPTION>
Test Period
(The Fiscal Year of the
Company Ending in the Interest Coverage
Calendar Year Set Forth Below) Ratio
------------------------------ -----------------
<S> <C>
1999 2.00 to 1.00
2000 2.00 to 1.00
2001 2.20 to 1.00
2002 2.50 to 1.00
2003 2.75 to 1.00
2004 3.00 to 1.00
2005 3.00 to 1.00
2006 3.00 to 1.00
</TABLE>
(b) Leverage Ratio. Permit, at the last day of any fiscal quarter of the
Company ending during any test period set forth below, the Leverage Ratio to be
higher than the ratio set forth opposite such test period below:
<TABLE>
<CAPTION>
Test Period
(The Fiscal Year of the
Company Ending in the Leverage
Calendar Year Set Forth Below) Ratio
------------------------------ --------
<S> <C>
1999 5.35 to 1.00
2000 5.10 to 1.00
2001 4.50 to 1.00
2002 4.00 to 1.00
2003 3.50 to 1.00
2004 3.00 to 1.00
2005 3.00 to 1.00
2006 3.00 to 1.00
</TABLE>
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<PAGE> 78
(c) Fixed Charge Coverage Ratio. Permit, at the last day of any fiscal
quarter of the Company ending during any test period set forth below, the Fixed
Charge Coverage Ratio to be less than the ratio set forth opposite such test
period below:
<TABLE>
<CAPTION>
Test Period
(The Fiscal Year of the
Company Ending in the Fixed Charge
Calendar Year Set Forth Below) Ratio
------------------------------ -------------
<S> <C>
1999 1.25 to 1.00
2000 1.25 to 1.00
2001 1.50 to 1.00
2002 1.75 to 1.00
2003 1.85 to 1.00
2004 2.00 to 1.00
2005 2.00 to 1.00
2006 2.00 to 1.00
</TABLE>
8.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness under this Agreement or any of the other Loan Documents;
(b) Indebtedness of the Company to any Subsidiary of the Company and of any
Subsidiary of the Company to the Company or any other Subsidiary of the Company;
provided that, in each case, (i) such Indebtedness shall be evidenced by
promissory notes substantially in the form of Exhibit M or otherwise reasonably
satisfactory in form and substance to the Administrative Agent, and (ii) except
with respect to such Indebtedness owed to a Foreign Subsidiary, such promissory
notes shall be pledged to the Administrative Agent pursuant to the terms of the
Guarantee and Collateral Agreement;
(c) Indebtedness of the Company and any of its Subsidiaries incurred to
finance the acquisition or construction of fixed or capital assets (whether
pursuant to a loan, a Financing Lease, Synthetic Lease or otherwise) in an
aggregate principal amount not exceeding as to the Company and its Subsidiaries
$10,000,000 at any time outstanding, provided that such Indebtedness is incurred
within ninety days of such acquisition or completion of construction, and any
refinancings, refundings, renewals or extensions thereof, provided that the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension;
(d) Indebtedness of Foreign Subsidiaries incurred to finance the working
capital requirements of such Foreign Subsidiaries in an aggregate principal
amount not exceeding $5,000,000 at any time outstanding for all Foreign
Subsidiaries;
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<PAGE> 79
(e) Indebtedness outstanding on the date hereof and listed in Schedule
8.2(e) and any refinancings, refundings, renewals or extensions thereof,
provided that the amount of such Indebtedness is not increased at the time of
such refinancing, refunding, renewal or extension;
(f) Indebtedness of a Person which becomes a Subsidiary after the date
hereof, provided that (i) such Indebtedness existed at the time such Person
became a Subsidiary and was not created in anticipation thereof and (ii)
immediately after giving effect to the acquisition of such Person by the Company
or any of its Subsidiaries no Default or Event of Default shall have occurred
and be continuing;
(g) Indebtedness of the Company and its Subsidiaries under Hedge Agreements
entered into in the ordinary course of business (and not for speculative
purposes);
(h) Indebtedness in respect of the Senior Subordinated Notes in an
aggregate principal amount not to exceed $125,000,000 at any time outstanding;
(i) additional unsecured Indebtedness of the Company and the Subsidiaries
not exceeding in aggregate principal amount $2,500,000 at any one time
outstanding;
(j) additional unsecured Subordinated Debt issued by the Company or any
Subsidiary after the Closing Date in an aggregate principal amount not to exceed
$50,000,000, the proceeds of which are used solely to fund Permitted
Acquisitions and pay related transaction expenses and any refinancings,
refundings, renewals or extensions thereof which constitute Subordinated Debt,
provided that the amount of such Indebtedness is not increased at the time of
such refinancing, refunding, renewal or extension;
(k) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business, provided that such Indebtedness is
extinguished within five Business Days of its incurrence;
(l) Guarantee Obligations with respect to Indebtedness permitted hereby,
provided that (i) Guarantee Obligations of Domestic Subsidiaries in respect of
the Senior Subordinated Notes or other Subordinated Debt (to the extent
permitted hereunder) must be (i) subordinated to such Domestic Subsidiary's
Guarantor Obligations (as defined in the Guarantee and Collateral Agreement) on
terms and conditions no less favorable to the Agents and the Lenders than the
subordination provisions contained in the Senior Subordinated Note Indenture on
the Closing Date and (ii) each such Domestic Subsidiary must be a Guarantor (as
defined in the Guarantee and Collateral Agreement); and
(m) Indebtedness of the Company or its Subsidiaries in respect of
performance bonds, bid bonds, appeal bonds, surety bonds and similar
obligations, in each case provided in the ordinary course of business, and any
extension, renewal or refinancing thereof, to the extent not provided to secure
the repayment of Indebtedness and to the extent that the amount of refinancing
Indebtedness is not greater than the amount of the Indebtedness being
refinanced.
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<PAGE> 80
8.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, or assign or sell any income or revenues (including accounts
receivable) or rights in respect thereof, except for:
(a) Liens for taxes not yet due or which are being contested in good faith
by appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Company or its Subsidiaries, as the case may
be, in conformity with GAAP (or, in the case of Foreign Subsidiaries, generally
accepted accounting principles in effect from time to time in their respective
jurisdictions of incorporation);
(b) carriers', warehousemen's, landlord's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than ninety days or which are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts (other than
for Indebtedness), leases, statutory obligations (except pursuant to ERISA and
Environmental Laws), surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(e) easements, rights-of-way, zoning ordinances, restrictions and other
similar encumbrances existing or incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and which do not in any
case materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the Company
and its Subsidiaries taken as a whole;
(f) Liens in existence on the date hereof listed in Schedule 8.3(f),
securing Indebtedness permitted by Section 8.2(e), provided that no such Lien is
spread to cover any additional property after the Closing Date and that the
principal amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Company and its Subsidiaries
permitted by Section 8.2(c) incurred to finance the acquisition or construction
of fixed or capital assets or to refinance Indebtedness incurred pursuant to
Section 8.2(c) , provided that (i) such Liens shall be created within ninety
days of the acquisition or completion of construction of such fixed or capital
assets or the refinancing of such Indebtedness, (ii) such Liens do not at any
time encumber any property other than the property financed by such Indebtedness
and proceeds thereof, (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the principal amount of Indebtedness secured by any such Lien
shall at no time exceed 100% of the original purchase price or cost of such
property at the time it was acquired or constructed;
(h) Liens on assets of any Foreign Subsidiary securing Indebtedness of such
Foreign Subsidiary permitted by Section 8.2(d);
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<PAGE> 81
(i) Liens on the property or assets of a Person which becomes a Subsidiary
after the date hereof securing Indebtedness permitted by Section 8.2(f),
provided that (i) such Liens existed at the time such Person became a Subsidiary
and were not created in anticipation thereof, (ii) any such Lien is not spread
to cover any other property or assets of such Person after the time such Person
becomes a Subsidiary, and (iii) the principal amount of Indebtedness secured
thereby is not increased;
(j) licenses, leases or subleases granted to other Persons in the ordinary
course of business not materially interfering with the conduct of the business
of Company and its Subsidiaries taken as a whole;
(k) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 9(h);
(l) any interest or title of a lessor, sublessor, licensee or licensor
under any lease or license agreement permitted by this Agreement;
(m) Liens in favor of a banking institution arising by operation of law
encumbering deposits (including the right of set-off) held by such banking
institutions incurred in the ordinary course of business and which are within
the general parameters customary in the banking industry;
(n) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for sale of goods entered into by the Company or any of its
Subsidiaries in the ordinary course of business;
(o) Liens in favor of customs and revenue authorities arising by operation
of law to secure payment of customs duties in connection with importation of
goods; and
(p) Liens created pursuant to the Security Documents;
provided that no Lien permitted under this Section 8.3 may attach to any Capital
Stock of any Subsidiary except (i) Liens created pursuant to the Security
Documents, and (ii) Liens permitted by Section 8.3(a) and Section 8.3(h) (with
respect to Capital Stock of Foreign Subsidiaries not subject to the Liens of the
Security Documents and Capital Stock of Foreign Subsidiaries owned by Foreign
Subsidiaries).
8.4 Limitation on Fundamental Changes. Enter into any merger, consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Company may be merged or consolidated with or
into the Company (provided that the Company shall be the continuing or surviving
entity) or with or into any one or more Subsidiaries of the Company (provided
that (i) a Subsidiary shall be the
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<PAGE> 82
continuing or surviving entity, and (ii) the surviving entity must be a
Guarantor if any merged or consolidated Subsidiary is a Guarantor);
(b) any Subsidiary may sell, lease, transfer or otherwise dispose of all or
substantially all of its assets (upon voluntary liquidation or otherwise) to the
Company or any other Subsidiary of the Company, provided that if the Subsidiary
whose assets are so sold, leased, transferred or otherwise disposed of is a
Guarantor, any Subsidiary to which such assets are so sold, leased, transferred
or otherwise disposed of must also be a Guarantor;
(c) pursuant to and in accordance with the Recapitalization Documents; and
(d) any Subsidiary may be merged with any other Person to effect a
Permitted Acquisition, provided that (i) the surviving entity is a Subsidiary,
and (ii) the surviving entity must be a Guarantor if the merged Subsidiary is a
Guarantor;
provided, however, that in each case, before and immediately after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing.
8.5 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including
receivables and leasehold interests), whether now owned or hereafter acquired,
or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary's
Capital Stock to any Person, except:
(a) the sale or other disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale or lease of inventory in the ordinary course of business;
(c) the sale or discount without recourse (except with respect to customary
indemnities, representations and warranties) of accounts receivable arising in
the ordinary course of business in connection with the compromise or collection
thereof;
(d) as permitted by Section 8.4(b);
(e) licenses or sublicenses by the Company and its Subsidiaries of
software, copyright, trademarks, patents and other intellectual property in the
ordinary course of business and which licenses or sublicenses do not materially
interfere with the business of the Company or any Subsidiary, provided that all
such software, copyrights, trademarks, patents and other intellectual property
remain subject to the Liens created by the Security Documents;
(f) transfers of condemned property to the respective Governmental
Authority that has condemned the same (whether by deed in lieu of condemnation
or otherwise), and transfers of properties that have been subject to a casualty
to the respective insurer of such property or its designee as part of an
insurance settlement, provided that the Company complies with Sections 4.3(d)
and 4.3(e);
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<PAGE> 83
(g) issuance of Disqualified Stock by Subsidiaries to the extent permitted
under Section 8.2;
(h) issuance of Capital Stock by Subsidiaries to the Company and other
Subsidiaries;
(i) conveyances, sales, leases, assignments, transfers or other
dispositions of assets by the Company and its Subsidiaries for cash and for fair
market value in an aggregate amount not to exceed $10,000,000 during any fiscal
year of the Company;
(j) sales, leases, assignments, transfers or dispositions of assets to the
Company or to any Subsidiary; and
(k) transfers constituting Investments permitted pursuant to Section 8.8.
8.6 Limitation on Dividends. Declare or pay any dividend (other than
dividends payable solely in common stock of the Company or an increase in the
stated value of the Preferred Shares) on, or make any payment on account of, or
set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock of the Company or any Subsidiary or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Company or
any Subsidiary, except:
(a) pursuant to the Merger in accordance with the Recapitalization
Documents (subject to Section 8.6(e));
(b) the Company may repurchase, redeem or otherwise acquire or retire for
value any Capital Stock of the Company held by employees of the Company or any
of its Subsidiaries pursuant to any employee equity subscription agreement,
stock option agreement or stock ownership arrangement, provided that (A) the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Capital Stock shall not exceed $5,000,000, and (B) no Default or Event of
Default shall have then occurred and be continuing or would result therefrom;
(c) any Subsidiary may declare and pay dividends to the Company or to a
Subsidiary of the Company that is a Guarantor;
(d) dividends may be declared and paid on the Preferred Shares following
the fifth anniversary of the Closing Date, provided that no Default or Event of
Default shall have occurred and be continuing or would result therefrom;
(e) payments to holders of Dissenting Shares in satisfaction or release of
their rights or claims under Section 262 of the General Corporation Law of the
State of Delaware, subject to the provisions of Schedule 8.6; and
(f) the Company may repurchase, redeem, or otherwise acquire for value any
Capital Stock of the Company (other than Capital Stock held by employees
pursuant to agreements of
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<PAGE> 84
the type referred to in Section 8.6(b) or Capital Stock owned by the Sponsor or
any of its Affiliates) from public shareholders of the Company, provided that
(i) no Default or Event of Default shall have occurred and be continuing or
would result therefrom, and (ii) the aggregate purchase price paid for all such
repurchased, redeemed, acquired or retired Capital Stock (the "Aggregate
Redemption Amount") shall not exceed on the date of any such repurchase,
redemption, acquisition, or retirement (a "Redemption Date") the greater of (A)
$5,000,000 or (B) the Aggregate Redemption Amount specified below that
corresponds to the Leverage Ratio on the relevant Redemption Date:
<TABLE>
<CAPTION>
Leverage Aggregate Redemption
Ratio Amount
-------- --------------------
<S> <C>
Less than or equal to 4.0 to $7,500,000
1.0 but greater than 3.5 to 1.0
Less than or equal to 3.5 to $10,000,000
1.0 but greater than 2.75 to 1.0
Less than or equal to 2.75 to 1.0 $12,500,000
</TABLE>
8.7 Limitation on Capital Expenditures. Make or commit to make a Capital
Expenditure, excluding (i) any such Capital Expenditure in connection with any
asset acquired in connection with normal replacement and maintenance programs
properly charged to current operations and (ii) Capital Expenditures in the
ordinary course of business not exceeding, in the aggregate for the Company and
its Subsidiaries during any test period set forth below, the amount set forth
opposite such test period below:
<TABLE>
<CAPTION>
Test Period
(The Fiscal Year of the
Company Ending in the
Calendar Year Set Forth Below) Amount
------------------------------ ------
<S> <C>
1999 $6,000,000
2000 $7,000,000
2001 $6,000,000
2002 $6,000,000
2003 $8,000,000
2004 $8,000,000
2005 $8,000,000
2006 $8,000,000
</TABLE>
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<PAGE> 85
provided, that up to 100% of any such amount if not so expended in the test
period for which it is permitted above, may be carried over for expenditure in
the next succeeding test period.
8.8 Limitation on Investments, Loans and Advances. Make any advance, loan,
extension of credit or capital contribution to, or purchase, acquire or hold any
stock, bonds, notes, debentures or other securities (including any option,
warrant or other right to acquire any of the foregoing) of or any assets
constituting a business unit of, or make or permit to exist any other investment
in, any Person (an "Investment"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) loans to officers of the Company, provided that the aggregate
outstanding principal amount thereof shall not exceed $500,000 at any one time
outstanding;
(d) loans and advances to employees of the Company or its Subsidiaries for
travel, entertainment and relocation expenses in the ordinary course of business
in an aggregate amount for the Company and its Subsidiaries not to exceed
$750,000 at any one time outstanding;
(e) Investments by the Company in its Subsidiaries and Investments by such
Subsidiaries in the Company and in other Subsidiaries; provided that the
aggregate Investments of the Company and its Domestic Subsidiaries in Foreign
Subsidiaries shall not exceed $5,000,000 at any one time outstanding after
giving effect to all dividends, distributions, principal, interest and other
payments received by the Company and its Domestic Subsidiaries in respect of
such Investments;
(f) Investments by the Company in Hedge Agreements permitted under Section
8.2(g);
(g) Investments in, or constituting, intercompany Indebtedness permitted by
Section 8.2(b);
(h) Permitted Acquisitions;
(i) other Investments in an aggregate amount not to exceed $1,000,000 at
any one time outstanding after giving effect to all dividends, distributions,
principal, interest, and other payments received in respect of such Investments;
and
(j) Investments received in settlement of debts, liabilities or other
obligations owing to the Company or any of its Subsidiaries;
(k) Investments received as consideration in transactions permitted under
Section 8.5;
(l) Investments of a Person that becomes a Subsidiary or is merged,
consolidated or amalgamated with or into or transfers all or substantially all
of its assets to, or is liquidated into,
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<PAGE> 86
the Company or any of its other Subsidiaries, or is otherwise acquired pursuant
to a Permitted Acquisition;
(m) Investments funded in their entirety with the proceeds of equity
contributions made by the Sponsor or any of its Affiliates, provided that (i) at
the time of any such Investment, no Default or Event of Default shall exist or
would result from such Investment, and (ii) the Company satisfies, and will
continue to satisfy, after giving effect (on a pro forma basis) to such
Investment, the financial covenants set forth in Section 8.1; and
(n) Investments existing on the date hereof and described on Schedule
8.8(n).
8.9 Limitation on Optional Payments and Modifications of Subordinated Debt.
(a) Make any optional payment or prepayment on or redemption, purchase or
defeasance of any Senior Subordinated Notes or any other Subordinated Debt, (b)
amend, modify or change, or consent or agree to any amendment, modification or
change to any of the terms of the Senior Subordinated Notes, the Senior
Subordinated Note Indenture or any other Subordinated Debt (other than any such
amendment, modification or change which would extend the maturity or reduce the
amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon), or (c) amend the subordination
provisions of the Senior Subordinated Notes, the Senior Subordinated Note
Indenture, or any other Subordinated Debt Documentation.
8.10 Limitation on Transactions with Affiliates. Except with respect to (a)
transactions contemplated by the Recapitalization Documents, (b) transactions
between or among the Company and/or its Subsidiaries, (c) compensation and
indemnification arrangements with officers and directors of the Company and its
Subsidiaries, (d) transactions contemplated by the Management Agreement (subject
to Section 8.17), (e) fees and expenses payable to the Sponsor and its
Affiliates for services rendered in connection with the Merger, the
Recapitalization and Permitted Acquisitions and (f) directors' fees payable to
Affiliates of the Sponsor, enter into any transaction, including any purchase,
sale, lease or exchange of property or the rendering of any service, with any
Affiliate unless such transaction is (i) otherwise permitted under this
Agreement and (ii) upon fair and reasonable terms no less favorable to the
Company or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person which is not an Affiliate.
8.11 Limitation on Changes in Fiscal Year. Permit the fiscal year of the
Company to end on a day other than November 30 in any calendar year, provided
that upon at least sixty days prior notice by the Company to the Administrative
Agent, the Company may change the end of its fiscal year to December 31.
8.12 Limitation on Negative Pledge Clauses. Enter into with any Person any
agreement, other than (a) this Agreement, (b) purchase money indebtedness or
mortgages, Financing Leases or Synthetic Leases permitted by this Agreement (in
which cases, any prohibition or limitation shall only be effective against the
assets financed thereby), (c) the Senior Subordinated Note Indenture and the
other Subordinated Debt Documentation (so long as the relevant provisions in
such Subordinated Debt Documentation are no more restrictive than
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<PAGE> 87
the comparable provisions contained in the Senior Subordinated Note Indenture on
the Closing Date), (d) agreements with respect to the Indebtedness permitted
under Section 8.2(d) (which restrictions may only limit the granting of Liens on
the assets of a Foreign Subsidiary) and (e) customary provisions in leases,
subleases, licenses or sublicenses restricting the assignment thereof, which
prohibits or limits the ability of the Company or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien in favor of the Agent (or
other Person performing a similar function) as security for the Obligations or
any extension, renewal, modification, increase, replacement, refunding or
refinancing thereof upon any of its property, assets or revenues, whether now
owned or hereafter acquired.
8.13 Limitation on Lines of Business; Creation of Subsidiaries. Enter into
any business, either directly or through any Subsidiary, except for those
businesses in which the Company and its Subsidiaries are engaged on the date of
this Agreement or which are reasonably related thereto.
8.14 Limitation on Modification of Recapitalization Documents. Amend,
modify or change or consent to or agree to any amendment, modification or change
to any of the provisions of the Recapitalization Documents that would materially
and adversely affect the rights of the Agents and the Lenders hereunder.
8.15 Limitation on Modification of Organizational Documents. Amend or
modify its Certificate of Incorporation or By-Laws or other organizational
documents in a manner that would materially and adversely affect the rights of
the Agents and the Lenders hereunder.
8.16 Limitation on Subsidiary Distributions and other Actions. Enter into
or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Subsidiary to (a) pay dividends or make any other
distributions in respect of any Capital Stock of such Subsidiary held by, or pay
any Indebtedness owed to, the Company or any other Subsidiary of the Company,
(b) make loans or advances to the Company or any other Subsidiary of the
Company, (c) transfer any of its assets to the Company or any other Subsidiary
of the Company, or (d) act as a guarantor pursuant to the Loan Documents or any
renewals, refinancings, refundings or extensions thereof except for such
encumbrances or restrictions existing under or by reason of (i) the Loan
Documents, (ii) customary provisions in leases, subleases, licenses and other
contracts restricting the assignment thereof, (iii) the Senior Subordinated
Notes and Senior Subordinated Note Indenture, (iv) any other Subordinated Debt
Documentation, provided that the terms of such encumbrances and restrictions are
no more restrictive (taken as a whole) and not materially less favorable to the
Lenders than those contained in the Senior Subordinated Note Indenture and the
Senior Subordinated Notes on the Closing Date, (v) applicable law, (vi)
provisions with respect to the disposition of assets or property in asset sale
agreements, stock sale agreements and other similar agreements entered into in
the ordinary course of business, and any joint venture agreement to which a
Subsidiary is a party, provided that the assets of Subsidiaries that are subject
to any such restrictions shall not at any time exceed more than 10% of the
Consolidated total assets of the Company and its Subsidiaries, (vii) any
document or instrument governing Indebtedness incurred pursuant to Section
8.2(c), provided that any such restriction contained therein relates only to the
assets acquired or constructed in connection therewith, or (viii) restrictions
contained in the documentation governing Indebtedness incurred
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pursuant to Section 8.2(d), provided that such restrictions only apply to the
Foreign Subsidiary that has incurred such Indebtedness.
8.17 Limitation on Management Fees. Pay management or similar fees to the
Sponsor or any of its Affiliates pursuant to the Management Agreement or
otherwise in an aggregate amount in excess of $325,000 in any fiscal year of the
Company, which amount may be reasonably increased to reflect a material increase
in the size of the Company and its Subsidiaries as a result of Permitted
Acquisitions, provided that notwithstanding the foregoing, the Company and its
Subsidiaries may also pay fees and expenses to the Sponsor and its Affiliates
for services rendered in connection with the Merger, the Recapitalization and
Permitted Acquisitions and directors' fees to Affiliates of the Sponsor.
8.18 Cancellation of Shares. Fail to cancel any Share (and related options)
required to be canceled pursuant to the Recapitalization Agreement.
8.19 Designated Senior Debt. Designate any Indebtedness of the Company or
any Subsidiary (other than Indebtedness under this Agreement and the other Loan
Documents) as "Designated Senior Debt" under and as defined in the Senior
Subordinated Note Indenture or any other Subordinated Debt Documentation, in
each case without the prior written consent of the Administrative Agent and the
Required Lenders.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Company shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or the Company shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder (including any
fees), within three Business Days after any such interest or other amount
becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the Company or
any other Loan Party herein or in any other Loan Document or which is contained
in any certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been incorrect in any material respect on or as of
the date made or deemed made; or
(c) The Company or any Subsidiary shall default in the observance or
performance of any agreement contained in Section 8 hereof or Section 7.7(a); or
(d) The Company or any other Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section),
and such default shall continue unremedied for a period of thirty days after the
earlier of (i) notice to the Company by any Lender or the Administrative Agent
of such default and (ii) the date that the Company should have provided notice
of such default to the Administrative Agent pursuant to Section 7.7(a); or
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(e) The Company or any of its Subsidiaries shall (i) default in any payment
of principal of or interest of any Indebtedness (other than the Loans or
Reimbursement Obligations), or (ii) default in the observance or performance of
any other agreement or condition relating to any such Indebtedness contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity; provided, however, that no Default or Event of
Default shall exist under this paragraph unless the aggregate amount of
Indebtedness in respect of which any default or other event or condition
referred to in this paragraph shall have occurred shall be equal to at least
$2,500,000; or
(f) (i) The Company or any of its Material Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the
Company or any of its Material Subsidiaries shall make a general assignment for
the benefit of its creditors; or (ii) there shall be commenced against the
Company or any of its Material Subsidiaries any case, proceeding or other action
of a nature referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of sixty days; or (iii) there
shall be commenced against the Company or any of its Material Subsidiaries any
case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within sixty days from the entry thereof; or (iv) the Company or any of its
Material Subsidiaries shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Company or any of its Material
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as defined
in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii)
any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan (other than a
Multiemployer Plan) or any Lien in favor of the PBGC or a Plan shall arise on
the assets of the Company or any Commonly Controlled Entity, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes
of Title IV of ERISA, (v) the Company or any Commonly Controlled Entity shall,
or in the reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a
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withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the Company
or any of its Subsidiaries involving in the aggregate a liability (not paid or
fully covered by insurance) of $5,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending appeal
within sixty days from the entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any reason (other
than in accordance with the terms thereof), to be in full force and effect, or
the Company or any other Loan Party which is a party to any of the Security
Documents shall so assert or (ii) the Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and priority
purported to be created thereby; or
(j) Any Guarantee shall cease, for any reason (other than in accordance
with the terms thereof), to be in full force and effect or any Guarantor shall
so assert; or
(k) Any subordination provision in the Senior Subordinated Note Indenture,
the Subordinated Notes or any other Subordinated Debt Documentation shall cease,
for any reason, to be in full force and effect or the Company or any Subsidiary
shall so assert; or
(l) (i) the Sponsor and its Affiliates shall at any time cease to
beneficially own at least 30% (on a fully diluted basis) of all outstanding
Capital Stock having ordinary voting power in the election of directors of the
Company, (ii) any Person or "group" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, as amended) (other than the Sponsor and its
Affiliates) shall have or acquire beneficial ownership (on a fully diluted
basis) of outstanding Capital Stock of the Company having ordinary voting power
for the election of directors of the Company greater than or equal to the
beneficial ownership of the Sponsor and its Affiliates (on a fully diluted
basis) in the outstanding Capital Stock of the Company having ordinary voting
power in the election of the directors of the Company, (iii) on or after the
Closing Date, the Board of Directors of the Company shall not consist of a
majority of Continuing Directors ("Continuing Directors" shall mean the
directors of the Company on the Closing Date and each other director, if such
other director's nomination for election to the Board of Directors of the
Company is recommended by a majority of the then Continuing Directors), or (iv)
any "change of control" shall occur under the Senior Subordinated Note Indenture
or any other Subordinated Debt Documentation;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to the
Company, automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) shall immediately become due and payable, and (B)
if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent
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of the Required Lenders, the Administrative Agent may, or upon the request of
the Required Lenders, the Administrative Agent shall, by notice to the Company
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Company, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) to be due and payable forthwith, whereupon the
same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Company shall at such time deposit in a Cash Collateral
Account opened by the Administrative Agent an amount equal to the aggregate then
undrawn and unexpired amount of such Letters of Credit. The Company hereby
grants to the Administrative Agent, for the benefit of the Issuing Bank and the
L/C Participants, a security interest in such cash collateral to secure all
Obligations under this Agreement and the other Loan Documents. Amounts held in
such Cash Collateral Account shall be applied by the Administrative Agent to the
payment of drafts drawn under such Letters of Credit, and the unused portion
thereof after all such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay other Obligations. Within a reasonable
period after all such Letters of Credit shall have expired or been fully drawn
upon, all Reimbursement Obligations shall have been satisfied and all other
Obligations shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the Company. The Company shall execute
and deliver to the Administrative Agent, for the account of the Issuing Bank and
the L/C Participants, such further documents and instruments as the
Administrative Agent may request to evidence the creation and perfection of the
within security interest in such Cash Collateral Account.
Except as expressly provided above in this Section, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.
SECTION 10. THE ADMINISTRATIVE AGENT
10.1 Appointment, Powers, and Immunities. (a) Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
under this Agreement and the other Loan Documents with such powers and
discretion as are specifically delegated to the Administrative Agent by the
terms of this Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. The Administrative Agent (which
term as used in this sentence and in Section 10.5 and the first sentence of
Section 10.6 shall include its Affiliates and its own and its Affiliates'
officers, directors, employees, and agents): (i) shall not have any duties or
responsibilities except those expressly set forth in this Agreement and shall
not be a trustee or fiduciary for any Lender, (ii) shall not be responsible to
the Lenders for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Loan Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Loan Document, or any other
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document referred to or provided for therein or for any failure by any Loan
Party or any other Person to perform any of its obligations thereunder, (iii)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any Loan
Party or the satisfaction of any condition or to inspect the property (including
the books and records) of any Loan Party or any of its Subsidiaries or
Affiliates, (iv) shall not be required to initiate or conduct any litigation or
collection proceedings under any Loan Document except pursuant to the request of
the Required Lenders (but subject to Sections 10.2 and 10.3), and (v) shall not
be responsible for any action taken or omitted to be taken by it under or in
connection with any Loan Document, except for its own gross negligence or
willful misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
(b) The Issuing Bank shall act on behalf of the Lenders with respect to
Letters of Credit issued under this Agreement and the documents associated
therewith. It is understood and agreed that the Issuing Bank (i) shall have all
of the benefits and immunities (A) provided to the Administrative Agent in this
Section 10 with respect to acts taken or omissions suffered by the Issuing Bank
in connection with Letters of Credit issued under this Agreement and the
documents associated therewith as fully as if the term "Administrative Agent,"
as used in this Section 10, included the Issuing Bank with respect to such acts
or omissions and (B) as additionally provided in this Agreement and (ii) shall
have all of the benefits of the provisions of Section 10.5 as fully as if the
term "Administrative Agent," as used in Section 10.5, included the Issuing Bank
(other than for the gross negligence or willful misconduct of the Issuing Bank).
10.2 Reliance by the Administrative Agent. The Administrative Agent shall
be entitled to rely upon any certification, notice, instrument, writing, or
other communication (including any thereof by telephone or telecopy) believed by
it to be genuine and correct and to have been signed, sent or made by or on
behalf of the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any Loan Party), independent accountants, and
other experts selected by the Administrative Agent. The Administrative Agent may
deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until the Administrative Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.6. As to any
matters not expressly provided for by this Agreement, the Administrative Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding on all of the Lenders; provided, however,
that the Administrative Agent shall not be required to take any action that
exposes the Administrative Agent to personal liability or that is contrary to
any Loan Document or Requirement of Law or unless it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking any such action.
10.3 Defaults. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Administrative Agent has received written notice from a Lender or the
Company specifying such Default or Event of Default and stating that such notice
is a "Notice of Default." In the event that the Administrative
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Agent receives such a notice of the occurrence of a Default or Event of Default
or an Event or Default occurs as a result of a failure of the Company to pay
when due any principal of or interest on the Loans or Reimbursement Obligations,
the Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall (subject to Section 10.2) take such action with
respect to such Default or Event of Default as shall reasonably be directed by
the Required Lenders; provided that, unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
10.4 Rights as Lender. With respect to its Commitments and the Loans made
by it, NationsBank (and any successor acting as Administrative Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. NationsBank (and any successor acting as Administrative Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any Loan
Party or any of its Subsidiaries or Affiliates as if it were not acting as
Administrative Agent, and NationsBank (and any successor acting as
Administrative Agent) and its Affiliates may accept fees and other consideration
from any Loan Party or any of its Subsidiaries or Affiliates for services in
connection with this Agreement or otherwise without having to account for the
same to the Lenders.
10.5 Indemnification. The Lenders agree to indemnify the Administrative
Agent (to the extent not reimbursed by the Company, but without limiting the
obligation of the Company to do so) ratably in accordance with their respective
Total Credit Percentages in effect on the date on which indemnification is
sought under this Section (or, if indemnification is sought after the date upon
which the Commitments have terminated and the Loans and Reimbursement
Obligations have been paid in full, ratably in accordance with their Total
Credit Percentages prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys' fees), or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against the
Administrative Agent (including by any Lender) in any way relating to or arising
out of any Loan Document or the transactions contemplated thereby or any action
taken or omitted by the Administrative Agent under any Loan Document (including
any of the foregoing arising from the ordinary negligence of the Administrative
Agent); provided that no Lender shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful misconduct of the Person
to be indemnified. Without limitation of the foregoing, each Lender agrees to
reimburse the Administrative Agent promptly upon demand for its ratable share in
accordance with its Total Credit Percentage of any costs or expenses payable by
the Company under Section 11.5, to the extent that the Administrative Agent is
not promptly reimbursed for such costs and expenses by the Company. The
agreements contained in this Section 10.5 shall survive any termination of the
Commitments and payment in full of the Loans and Reimbursement Obligations and
all other amounts payable under this Agreement.
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10.6 Non-Reliance on the Administrative Agent and Other Lenders. Each
Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Loan Parties and their Subsidiaries and its own decision to enter into this
Agreement and that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Loan Documents.
Except for notices, reports, and other documents and information expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the affairs,
financial condition, or business of any Loan Party or any of its Subsidiaries
or Affiliates that may come into the possession of the Administrative Agent or
any of its Affiliates.
10.7 Resignation of the Administrative Agent. The Administrative Agent may
resign at any time by giving notice thereof to the Lenders and the Company.
Upon any such resignation, the Required Lenders shall have the right to appoint
a successor Administrative Agent (with the prior written consent of the
Company, which consent shall not be unreasonably withheld or delayed). If no
successor Administrative Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty days after the
retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may (with the prior written consent of the
Company, which consent shall not be unreasonably withheld or delayed), on
behalf of the Lenders, appoint a successor Administrative Agent which shall be
a commercial bank organized under the laws of the United States of America
having combined capital and surplus of at least $100,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor,
such successor shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges, and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Section 10 shall continue in effect for its benefit in respect of any actions
taken or omitted to by taken by it while it was acting as Administrative Agent.
10.8 Syndication Agent. Notwithstanding any other provision contained in
this Agreement to the contrary, the Syndication Agent shall have no duties or
obligations in such capacity under this Agreement or any other Loan Document.
10.9 Subordinated Debt Documentation. The Administrative Agent and the
Lenders hereby acknowledge and agree that the Administrative Agent shall be the
only Administrative Agent which shall be a "Representative" of the Lenders
under the Senior Subordinated Note Indenture and any other Subordinated Debt
Documentation.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in
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accordance with the provisions of this Section. The Required Lenders may, or,
with the written consent of the Required Lenders, the Administrative Agent may,
from time to time, (a) enter into with the Company and the other Loan Parties
written amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of, amending, supplementing, modifying or adding any
provisions of or to this Agreement or the other Loan Documents or changing in
any manner the rights of the Lenders or the Loan Parties hereunder or
thereunder or (b) waive, on such terms and conditions as the Required Lenders
or the Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall:
(i) reduce the amount or extend the scheduled date of maturity of any Loan
or any Reimbursement Obligation or any scheduled installment of principal
thereof, or reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof or increase the amount or
extend the expiration date of any Lender's Commitment, in each case without the
consent of each Lender directly affected thereby (it being understood that
amendments to Section 4.3 shall not be affected by this clause (i));
(ii) consent to the assignment or transfer by the Company of any of its
rights and obligations under this Agreement and the other Loan Documents, or
release all or substantially all of the Collateral or release any Guarantor
whose assets comprise more than ten percent of the Consolidated total assets of
the Company and its Subsidiaries (other than as expressly permitted by this
Agreement or any Security Document), in each case without the written consent
of all the Lenders;
(iii) amend, modify or waive any provision of this Section 11.1 or reduce
the percentage specified in the definition of Required Lenders, without the
written consent of all the Lenders;
(iv) amend, modify or waive any provision of Section 10 without the
written consent of the then Administrative Agent;
(v) amend, modify or waive Section 4.3(b), (c), (d) or (e) or Section 4.10
without the written consent of the Required Tranche A Lenders and the Required
Tranche B Lenders, or reduce the percentage specified in the definition of
Required Tranche A Lenders without the written consent of all the Tranche A
Lenders or the percentage specified in the definition of Required Tranche B
Lenders without the written consent of all the Tranche B Lenders;
(vi) amend, modify or waive Section 3.3 without the written consent of the
Required Tranche A Lenders or Section 3.4 without the written consent of the
Required Tranche B Lenders;
(vii) amend, modify or waive Section 2 or Section 4.3(a), (b), (c), (d) or
(e) or Section 4.10 without the written consent of the Required Revolving
Credit Lenders;
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(viii) reduce the percentage specified in the definition of the Required
Revolving Credit Lenders without the written consent of all the Revolving
Credit Lenders;
(ix) amend, modify or waive Section 2.4 through 2.11 or Section 10.1
without the written consent of the Issuing Bank;
(x) amend, modify or waive any provision of Section 2.12, 2.13 or 2.14
without the written consent of the Swing Line Lender;
(xi) effect any waiver of any condition precedent to funding any Revolving
Credit Loan or Swing Line Loan or the issuance of any Letter of Credit without
the written consent of the Required Revolving Credit Lenders;
(xii) amend, modify or waive the provisions of any Letter of Credit or any
L/C Obligation without the written consent of the Issuing Bank and the Required
Revolving Credit Lenders; or
(xiii) amend, modify or waive any provision of Section 6.9 of the
Guarantee and Collateral Agreement, Section 5.8 of the Mortgages, or any
similar provision in any other Security Document without the written consent of
the Required Revolving Credit Lenders, the Required Tranche A Lenders and
Required Tranche B Lenders.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Company, the
Lenders, the Administrative Agent and all future holders of the Loans. In the
case of any waiver, the Company, the Lenders and the Administrative Agent shall
be restored to their former positions and rights hereunder and under the other
Loan Documents, and any Default or Event of Default waived shall be deemed to
be cured and not continuing; no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
11.2 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by facsimile
transmission) and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made (a) in the case of delivery by hand or by
overnight courier, when delivered, (b) in the case of delivery by mail, three
Business Days after being deposited in the mails, postage prepaid, or (c) in
the case of delivery by facsimile transmission, when sent and receipt has been
confirmed, addressed as follows in the case of the Company and the
Administrative Agent, and as set forth in Schedule 1.1 in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:
The Company:
Juno Lighting, Inc.
1300 S. Wolf Road
Des Plaines, IL 60017-5065
Telephone: (847) 827-9880
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Telecopy: (847) 813-8201
Attention: George Bilek, V.P., Finance
The Administrative Agent:
Ms. Kathy Mumpower
Assistant Vice President
Bank of America Agency Services
One Independence Center
101 N. Tryon Street
Charlotte, NC 28255-0001
Telephone: (704) 386-6837
Telecopy: (704) 409-0021
with copy to:
Mr. Tom Barnett
Senior Vice President
NationsBank, N.A.
Bank of America Corporate Center
100 N. Tryon Street
Charlotte, NC 28255
NC1-007-13-06
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
11.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents (or in any amendment,
modification or supplement hereto or thereto) and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the making of the Loans
hereunder.
11.5 Payment of Expenses and Taxes; Indemnification. (a) The Company
agrees to pay on demand all reasonable costs and expenses of the Administrative
Agent in connection with the syndication, preparation, execution, delivery,
closing, administration, modification, and amendment of this Agreement, the
other Loan Documents, and the other documents to be delivered hereunder and any
waiver or consent with respect to any provision thereof, including,
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<PAGE> 98
without limitation, the reasonable fees and expenses of counsel for the
Administrative Agent with respect thereto and with respect to advising the
Administrative Agent as to its rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under the Loan Documents.
The Company further agrees to pay on demand all reasonable costs and expenses
of the Administrative Agent and the Lenders (including, without limitation,
reasonable attorneys' fees and expenses) in connection with any Event of
Default and, if an Event of Default exists, the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Loan Documents and the
other documents to be delivered hereunder.
(b) The Company agrees to pay, indemnify and hold each Lender (including
the Issuing Bank) and the Agents harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents.
(c) The Company agrees to indemnify and hold harmless the Agents and each
Lender (including the Issuing Bank) and each of their Affiliates and their
respective officers, directors, employees, agents and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities, penalties, judgments, suits, costs (including settlement costs)
and expenses (including reasonable attorneys' fees and expenses) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including in connection
with any investigation, litigation, or proceeding or preparation of defense in
connection therewith) (i) the Recapitalization, the Recapitalization Documents,
the Loan Documents, any of the transactions contemplated herein or therein, any
Letter of Credit or the use thereof or the actual or proposed use of the
proceeds of the Loans (including any of the foregoing arising from the
negligence of the Indemnified Party) or (ii) the actual or alleged presence of
Materials of Environmental Concern on any property now or hereafter owned or
leased by the Company or any Subsidiary, except to the extent such claim,
damage, loss, liability, penalty, cost or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence, bad faith or willful
misconduct. In the case of an investigation, litigation or other proceeding to
which the indemnity in this Section 11.5(c) applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is
brought by the Company, its directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated. The Company agrees not to assert any claim against the Agents,
any Lender (including the Issuing Bank), any of their Affiliates, or any of
their respective directors, officers, employees, attorneys, agents and
advisers, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Loan Documents,
the Recapitalization Documents, any of the transactions contemplated herein or
in any Recapitalization Document or the actual or proposed use of any Letter of
Credit or the proceeds of the Loans.
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<PAGE> 99
(d) Without prejudice to the survival of any other agreement of the
Company hereunder, the agreements and obligations of the Company contained in
this Section 11.5 shall survive the termination of the Commitments and the
Letters of Credit and payment in full of the Loans and all other Obligations.
11.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Company, the
Lenders, the Agents and their respective successors and assigns, except that
the Company may not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business or investment activities and in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants") participating
interests in all or any portion of its rights, obligations, or rights and
obligations under or in respect of any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest, right, or
obligation of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan (and any Note evidencing such Loan) for all purposes
under this Agreement and the other Loan Documents, such Lender shall retain the
sole right and responsibility to exercise such Lender's rights and enforce each
Loan Party's obligations under the Loan Documents, and the Company and the
Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. No Lender shall be entitled to create
in favor of any Participant (except such Lender's Affiliates and Subsidiaries),
in the participation agreement pursuant to which such Participant's
participating interest shall be created or otherwise, any right to vote on,
consent to or approve any matter relating to this Agreement or any other Loan
Document except for those specified in clauses (i) and (ii) of the proviso to
Section 11.1. The Company agrees that if amounts outstanding under this
Agreement are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement, provided that, in purchasing such participating interest,
such Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 11.7(a) as fully as if it were a Lender
hereunder. The Company and each Lender also agree that each Participant shall
be entitled to the benefits of Sections 4.12, 4.13 and 4.14 with respect to its
participation in the Commitments and the Loans outstanding from time to time as
if it were a Lender and such Lender shall not be entitled to the benefits of
Sections 4.12, 4.13 and 4.14 with respect to participating interests
transferred by it to a Participant, provided that, in the case of Section 4.13,
such Participant shall have complied with the requirements of said Section and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred
by such transferor Lender to such Participant had no such transfer occurred.
Participating interests in the
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Commitments, the Loans and the Notes may not be sold to any Loan Party or any
Affiliate thereof, and subparticipations by each Participant shall be
prohibited.
(c) Any Lender may, in the ordinary course of its commercial banking
business or investment activities and in accordance with applicable law, at any
time and from time to time assign to any Eligible Assignee (any such Eligible
Assignee being referred to herein as an "Assignee") all or any part of its
rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance executed by such Assignee, and such
assigning Lender and delivered to the Administrative Agent for its acceptance
and recording in the Register, provided that (i) no such assignment to an
Assignee of less than all of the rights and obligations of the assigning Lender
(other than any Lender or Affiliate thereof or Related Fund) shall be in an
aggregate principal amount of less than $4,500,000, unless otherwise agreed by
the Company and the Administrative Agent, and (ii) assignments shall not be
required to be made on a ratable basis as between the Facilities. Upon such
execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein, and (y) the assigning Lender
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations and relinquish its rights (other than its rights
under Sections 4.12, 4.13 and 11.5) under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto).
(d) The Administrative Agent, on behalf of the Company, shall maintain at
the address of the Administrative Agent referred to in Section 11.2 a copy of
each Assignment and Acceptance delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amounts of the Loans owing to, and any Notes
evidencing the Loans owned by, each Lender from time to time. Notes and the
Loans evidenced thereby may be assigned or otherwise transferred in whole or in
part only by registration of such assignment or transfer on the Register (and
each Note shall expressly so provide). Any assignment or transfer of all or
part of such Loan(s) and the Note(s) evidencing the same shall be registered on
the Register only upon surrender for registration of assignment or transfer of
the Note(s) evidencing such Loan(s), accompanied by a duly executed Assignment
and Acceptance, and thereupon one or more new Note(s) in the same aggregate
principal amount shall be issued, if requested, to the designated Assignee(s)
and the old Note(s) shall be returned by the Administrative Agent to the
Company marked "canceled". The entries in the Register shall be conclusive, in
the absence of manifest error, and the Company, the Administrative Agent and
the Lenders shall treat each Person whose name is recorded in the Register as
the owner of a Loan or other obligation hereunder (whether or not evidenced by
a Note) as the owner thereof for all purposes of this Agreement and the other
Loan Documents, notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation hereunder (whether or not evidenced by a Note)
shall be effective only upon appropriate entries with respect thereto being
made in the Register.
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<PAGE> 101
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an Affiliate thereof, by the Company, the Issuing Bank, the
Swing Line Lender (in each case, if required), and the Administrative Agent)
together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the Company.
(f) The Company authorizes each Lender to disclose to any Participant or
Assignee (each, a "Transferee") and any prospective Transferee, subject to such
Person's agreeing to comply with the provisions of Section 11.15, any and all
financial and other information in such Lender's possession concerning the
Company and any of its Affiliates.
(g) Notwithstanding any other provision set forth in this Agreement or any
other Loan Document, (i) any Lender may at any time assign and pledge all or
any portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular issued
by such Federal Reserve Bank, and (ii) any Lender which is a "fund" may at any
time assign or pledge all or any portion of its rights under this Agreement and
its Note(s) to a trustee or similar Person for the benefit of the equity
holders of such Lender. No such assignment or pledge shall release the
assigning Lender from its obligations hereunder, and each such assignment or
pledge shall be made in accordance with applicable law.
11.7 Adjustments; Set-off. (a) Except to the extent this Agreement
provides for payments to be allocated to the Lenders under a particular
Facility, if any Lender (a "benefitted Lender") shall at any time receive any
payment of all or part of its Loans, its Reimbursement Obligations or other
amounts owing to it hereunder, or interest thereon, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in Section 9(f), or
otherwise), in excess of its pro rata share as provided in this Agreement, such
benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loans,
Reimbursement Obligations or other amounts owing to it hereunder, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably in
accordance with this Agreement with each of the Lenders, provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such benefitted Lender, such purchase shall be rescinded, and
the purchase price and benefits returned, to the extent of such recovery, but
without interest.
(b) Upon the occurrence and during the continuance of any Event of
Default, each Lender (and each of its Affiliates) is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender (or any of its Affiliates) to or for the credit or the account of the
Company against any and all of the Obligations of the Company held by such
Lender, irrespective of whether such Lender shall have made any demand under
this Agreement or any other relevant Loan Document
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<PAGE> 102
and although such Obligations may be unmatured. Each Lender agrees promptly to
notify the Company after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section 11.7(b) are in addition to other rights and remedies (including other
rights of set-off) that such Lender may have.
11.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Company and the
Administrative Agent. Manual delivery of an executed counterpart of a
signature page to this Agreement shall be effective as delivery of an original
executed counterpart of this Agreement.
11.9 Severability. Any provision of this Agreement 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.
11.10 INTEGRATION. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT OF THE COMPANY, THE ADMINISTRATIVE AGENT, THE ISSUING BANK
AND THE LENDERS WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND THERE ARE NO
PROMISES, UNDERTAKINGS, REPRESENTATIONS OR WARRANTIES BY THE ADMINISTRATIVE
AGENT, THE ISSUING BANK OR ANY LENDER RELATIVE TO THE SUBJECT MATTER HEREOF NOT
EXPRESSLY SET FORTH OR REFERRED TO HEREIN OR IN THE OTHER LOAN DOCUMENTS. THIS
AGREEMENT SUPERCEDES ALL PRIOR COMMITMENTS AND AGREEMENTS (INCLUDING THE
COMMITMENT LETTER) AMONG THE PARTIES, THE SPONSOR AND THEIR AFFILIATES
REGARDING THE SUBJECT MATTER HEREOF, INCLUDING OBLIGATIONS PROVIDED THEREIN AS
SURVIVING TERMINATION THEREOF, ALL OF WHICH SHALL BE TERMINATED. THERE ARE NO
UNWRITTEN, ORAL AGREEMENTS AMONG THE PARTIES.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF, EXCEPT SECTIONS 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW.
11.12 Submission To Jurisdiction; Waivers. The Company hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and
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<PAGE> 103
enforcement of any judgement in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Company at the
addresses set forth pursuant to Section 11.2 or at such other address of which
the Administrative Agent shall have been notified pursuant thereto; and
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction.
11.13 Acknowledgments. The Company hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Company arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Administrative Agent and Lenders, on one hand, and the Loan Parties, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Loan Parties and the Lenders.
11.14 WAIVERS OF JURY TRIAL. THE COMPANY, THE AGENTS AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
11.15 Confidentiality. The Agents, the Issuing Bank and each Lender (each,
a "Lending Party") agree to keep confidential any information furnished or made
available to it by the Company pursuant to this Agreement that is marked
confidential; provided that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any Affiliate or
Related Fund of any Lending Party, or any officer, director, employee, agent,
or advisor of any Lending Party or Affiliate or Related Fund of any Lending
Party, (b) as required by any law, rule or regulation, (c) upon the order of
any court or administrative agency, (d) upon the request or demand of any
regulatory agency or authority, (e) that is or becomes available to the public
or that is or becomes available to any Lending Party other than as a result
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<PAGE> 104
of a disclosure by any Lending Party prohibited by this Agreement, (f) in
connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, provided that the relevant Lending Party shall give
the Company advance notice of any such disclosure, (g) to the extent necessary
in connection with the exercise of any remedy under this Agreement or any other
Loan Document, (h) to the National Association of Insurance Commissioners or
any similar organization or any nationally recognized rating agency that
requires access to information about such Lender's investment portfolio or
(i) subject to provisions substantially similar to those contained in this
Section 11.15, to any actual or proposed Participant or Assignee.
11.16 Usury Savings Clause. It is the intention of the parties hereto to
comply with applicable usury laws (now or hereafter enacted); accordingly,
notwithstanding any provision to the contrary in this Agreement, any Notes, any
of the other Loan Documents or any other document related hereto or thereto, in
no event shall this Agreement or any such other document require the payment or
permit the collection of interest in excess of the maximum amount permitted by
such laws. If from any circumstances whatsoever, fulfillment of any provision
of this Agreement, any Notes, any of the other Loan Documents or of any other
document pertaining hereto or thereto, shall involve transcending the limit of
validity prescribed by applicable law for the collection or charging of
interest, then, ipso facto, the obligation to be fulfilled shall be reduced to
the limit of such validity, and if from any such circumstances the
Administrative Agent and the Lenders shall ever receive anything of value as
interest or deemed interest by applicable law under this Agreement, any Notes,
any of the other Loan Documents or any other document pertaining hereto or
otherwise an amount that would exceed the highest lawful rate of interest
permitted by applicable law, such amount that would be excessive interest shall
be applied to the reduction of the principal amount owing under the Loans or on
account of any other indebtedness of the Company, and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of principal
of such indebtedness, such excess shall be refunded to the Company. In
determining whether or not the interest paid or payable with respect to any
indebtedness of the Company to the Administrative Agent and the Lenders, under
any specified contingency, exceeds the highest lawful rate, the Company, the
Administrative Agent and the Lenders shall, to the maximum extent permitted by
applicable law, (a) characterize any non-principal payment as an expense, fee
or premium rather than as interest, (b) exclude voluntary prepayments and the
effects thereof, (c) amortize, prorate, allocate and spread the total amount of
interest throughout the full term of such indebtedness so that interest thereon
does not exceed the maximum amount permitted by applicable law, and/or (d)
allocate interest between portions of such indebtedness, to the end that no
such portion shall bear interest at a rate greater than that permitted by
applicable law.
[Signature pages to follow]
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<PAGE> 105
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
JUNO LIGHTING, INC.
By: /s/ JOEL W. CHEMERS
---------------------------------------------------
Title: Vice President, Corporate Planning
<PAGE> 106
NATIONSBANK, N.A.,
as the Administrative Agent, a Lender and the Issuing Bank
By: /s/ W. Thomas Barnett
---------------------------------------------------
Name: W. Thomas Barnett
Title: Managing Director
<PAGE> 107
CREDIT SUISSE FIRST BOSTON,
as the Syndication Agent and a Lender
By: /s/ Bill O'Daly /s/ Kristin Lepri
---------------------------------------------------
Name: Bill O'Daly Kristin Lepri
Title: Vice President Associate
<PAGE> 108
WELLS FARGO BANK, N.A.
By: /s/ David A. Neumann
-----------------------------------------
Name: David A. Neumann
Title: Vice President
<PAGE> 109
COMERICA BANK
By: /s/ Gregory N. Bloch
--------------------------------------
Name: Gregory N. Bloch
Title: Vice President
<PAGE> 110
FIRSTAR BANK MILWAUKEE, N.A.
By: /s/ Jason R. Hickey
------------------------------------------
Name: Jason R. Hickey
Title: Commercial Banking Officer
<PAGE> 111
HARRIS TRUST AND SAVINGS BANK
By: /s/ Ronald V. Redd
---------------------------------------------------
Name: Ronald V. Redd
Title: Vice President
<PAGE> 112
NATIONAL CITY BANK
By: /s/ Matthew R. Klinger
--------------------------------------------------
Name: Matthew R. Klinger
Title: Assistant Vice President
<PAGE> 113
U.S. BANK NATIONAL ASSOCIATION
By: /s/ James M. Wilber
--------------------------------------------------
Name: James M. Wilber
Title: Vice President
<PAGE> 114
Annex A to
Credit Agreement
Applicable Percentage for Revolving
Credit Loans, Tranche A Term Loans,
Letter of Credit Fees and Commitment Fees
<TABLE>
<CAPTION>
Leverage Ratio Leverage Ratio Leverage Ratio Leverage Ratio
Pricing Level Level I Level II Level III Level IV
- --------------------- -------------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
x equal or 3.500 equal or 2.750 equal or
Leverage Ratio = x greater than 4.000 less than x less than x x less than 2.750
less than 4.000 less than 3.500
Applicable Percentage 2.500% 2.250% 2.000% 1.625%
for Eurodollar Loans
Applicable Percentage 1.000% .750% 0.500% 0.125%
for Base Rate Loans
Applicable Percentage 2.500% 2.250% 2.000% 1.625%
for Letter of Credit Fees
Applicable Percentage 0.500% 0.500% 0.500% 0.375%
for Commitment Fees
</TABLE>
Applicable Percentage for
Tranche B Term Loans
<TABLE>
<CAPTION>
Leverage Ratio Leverage Ratio Leverage Ratio Leverage Ratio
Pricing Level Level I Level II Level III Level IV
- --------------------- -------------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
x equal or 3.50 equal or 2.750 equal or
Leverage Ratio = x greater than 4.000 less than x less than x x less than 2.750
less than 4.000 less than 3.500
Applicable Percentage 3.000% 3.000% 2.750% 2.750%
for Eurodollar Loans
Applicable Percentage 1.500% 1.500% 1.250% 1.250%
for Base Rate Loans
</TABLE>
<PAGE> 115
Schedule 1.1 to Credit Agreement
Commitments, Applicable Lending Offices and Notice Addresses
<TABLE>
<CAPTION>
REVOLVING CREDIT TRANCHE A TRANCHE B
LENDER AND ADDRESS COMMITMENT COMMITMENT COMMITMENT TOTAL
------------------ ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
NationsBank, N.A. $5,833,333.34 $6,666,666.66 $45,000.000.00 $57,500,000.00
Applicable Lending Office for all Loans
and Address for Notices:
101 North Tryon Street
One Independence Center
Charlotte, NC 28255
Attn: Kathy Mumpower
Facsimile: (704) 409-0021
Credit Suisse First Boston $5,833,333.33 $6,666,666.67 -0- $12,500,000.00
Applicable Lending Office for all Loans:
Credit Suisse First Boston
Eleven Madison Avenue
New York, NY 10010-3629
Address for Notices:
Credit Suisse First Boston
5 World Trade Center, 8th Floor
New York, NY 10048
Attn: Ron Davis
Facsimile: (212) 335-0593
</TABLE>
<PAGE> 116
<TABLE>
<CAPTION>
REVOLVING CREDIT TRANCHE A TRANCHE B
LENDER AND ADDRESS COMMITMENT COMMITMENT COMMITMENT TOTAL
------------------ ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Wells Fargo Bank, N.A. $2,333,333.33 $2,666,666.67 $5,000,000.00 $10,000,000.00
Applicable Lending Office for all Loans:
Wells Fargo Bank, N.A.
555 Montgomery St., 17th Floor
San Francisco, CA 94111
Address for Notices:
Wells Fargo Bank, N.A.
Commercial Loan Accounting
201 3rd St., 8th Floor
San Francisco, CA 94103
Attn: Evelyn Lucas
Facsimile: (415) 979-0675
Comerica Bank $4,200,000.00 $4,800,000.00 -0- $ 9,000,000.00
Applicable Lending Office for all Loans
and Address for Notices:
Comerica Bank
500 Woodward Ave., MC 3269
Detroit, MI 48226
Attn: Beverly Jones
Facsimile: (313) 222-9516
</TABLE>
<PAGE> 117
<TABLE>
<CAPTION>
REVOLVING CREDIT TRANCHE A TRANCHE B
LENDER AND ADDRESS COMMITMENT COMMITMENT COMMITMENT TOTAL
------------------ ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Firstar Bank Milwaukee, N.A. $4,200,000.00 $4,800,000.00 -0- $ 9,000,000.00
Applicable Lending Office for all Loans:
Firstar Bank Milwaukee, N.A.
777 E. Wisconsin Ave.
Milwaukee, WI 53202
Address for Notices:
Firstar Bank Milwaukee, N.A.
P.O. Box 2188
Oshkosh, WI 54903-2188
Attn: Brenda Luethy
Facsimile: (920) 426-7655
Harris Trust and Savings Bank $4,200,000.00 $4,800,000.00 -0- $ 9,000,000.00
Applicable Lending Office for all Loans:
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, IL 60603
Address for Notices:
Harris Trust and Savings Bank
111 West Monroe Street, Floor 17 West
Chicago, IL 60603
Attn: Isela Garcia
Facsimile: (312) 293-5283
</TABLE>
<PAGE> 118
<TABLE>
<CAPTION>
REVOLVING CREDIT TRANCHE A TRANCHE B
LENDER AND ADDRESS COMMITMENT COMMITMENT COMMITMENT TOTAL
------------------ ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
National City Bank $4,200,000.00 $4,800,000.00 -0- $ 9,000,000.00
Applicable Lending Office for all Loans:
National City Bank
1900 E. Ninth St.
Cleveland, OH 44114
Address for Notices:
National City Bank
23000 Mill Creek Blvd.
Highland Hills, OH 44122
Attn: Larry Brown
Facsimile: (216) 488-7110
U.S. Bank National Association $4,200,000.00 $4,800,000.00 -0- $ 9,000,000.00
Applicable Lending Office for all Loans:
U.S. Bank National Association
701 Lee Street
Des Plaines, IL 60016
Address for Notices:
U.S. Bank National Association
701 Lee Street, Suite 800
Des Plaines, IL 60016
Attn: Joyce Perry
Facsimile: (847) 390-5699
</TABLE>
<PAGE> 1
EXHIBIT 12.1
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Six Months Ended
Year Ended November 30, May 31, Pro Forma
---------------------------------------------------- ------------------- -----------------
1994 1995 1996 1997 1998 1998 1999 Year Ended
---- ---- ---- ---- ---- ---- ---- November 30, 1998
-----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------- ------------------- -----------------
Pre-tax income $ 36,366 $ 30,914 $ 30,112 $ 31,393 $ 41,257 $ 18,001 $ 20,472 $ 13,098
---------------------------------------------------- ------------------- -----------------
Interest expense 320 374 317 244 166 80 62 23,629
Rent expense 259 253 299 274 291 126 162 291
---------------------------------------------------- ------------------- -----------------
Total fixed charges 579 627 616 518 457 206 224 23,920
---------------------------------------------------- ------------------- -----------------
Earnings before fixed charges $ 36,945 $ 31,541 $ 30,728 $ 31,911 $ 41,714 $ 18,207 $ 20,696 $ 37,018
---------------------------------------------------- ------------------- -----------------
Ratio of earnings to fixed charges 63.8 50.3 49.9 61.6 91.2 88.4 92.5 1.5
==================================================== =================== =================
Preferred stock dividend, pre-tax 14,565
Ratio of earnings to combined
fixed charges and preferred stock dividend 1.0
=================
<CAPTION>
Pro Forma
-------------------------------
Twelve Months
Six Months Ended Ended
May 31, 1999 May 31, 1999
---------------- -------------
<S> <C> <C>
------------------------------
Pre-tax income $ 6,214 $ 15,313
----------- --------------
Interest expense 11,740 23,546
Rent expense 162 327
----------- --------------
Total fixed charges 11,902 23,873
----------- --------------
Earnings before fixed charges $ 18,116 $ 39,186
----------- --------------
Ratio of earnings to fixed charges 1.5 1.6
=========== ==============
Preferred stock dividend, pre-tax 7,723 15,152
Ratio of earnings to combined
fixed charges and preferred stock dividend 0.9 1.0
=========== ==============
</TABLE>
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Accountants
We hereby consent to the use in this Registration Statement on Form S-4 of Juno
Lighting, Inc. of our reports dated January 14, 1999 relating to the financial
statements and financial statement schedule of Juno Lighting, Inc., which appear
in such Registration Statement.
PricewaterhouseCoopers LLP
August 27, 1999
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
------------------------------------
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
------------------------------------
FIRSTAR BANK, N.A.
f/k/a FIRSTAR BANK OF MINNESOTA, N.A.
(Exact name of Trustee as specified in its charter)
A National Banking Association 41-0122055
(State of incorporation if not a national bank) (IRS Employer
Identification No.)
101 East Fifth Street
Corporate Trust Department
St. Paul, Minnesota 55101
(Address of principal executive offices) (Zip Code)
FIRSTAR BANK, N.A.
101 East Fifth Street
St. Paul, Minnesota 55101
(651) 229-2600
(Exact name, address and telephone number of agent for service)
-----------------------------------
Illinois Juno Lighting, Inc. 34-2852993
Illinois Juno Manufacturing, Inc. Applied for
Indiana Indy Lighting, Inc. Applied for
Florida Advanced Fiberoptic Technologies, Inc. Applied for
(State of incorporation or other jurisdiction) (IRS Employer
Identification No.)
1300 South Wolf Road
Des Plaines, Illinois 60018
(Address of principal executive offices) (Zip Code)
-------------------------------------
11 7/8% Senior Subordinated Notes due 2009
(Title of Indenture Securities)
<PAGE> 2
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency
Treasury Department
Washington, DC
Federal Deposit Insurance Corporation
Washington, DC
The Board of Governors of the Federal Reserve System
Washington, DC
(b) The Trustee is authorized to exercise corporate trust powers.
GENERAL
Item 2. Affiliations with Obligor and Underwriters. If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe
each such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's knowledge the
obligor is not in default under any Indenture for which the Trustee acts as
Trustee.
Item 16. List of Exhibits. Listed below are all the exhibits filed as a part of
this statement of eligibility and qualification. Exhibits 1-4 are
incorporated by reference from filing 333-48849. Exhibit 7 is
incorporated by reference from filing 333-79659.
Exhibit 1. Copy of Articles of Association of the trustee now in
effect.
Exhibit 2. a. A copy of the certificate of the Comptroller of
Currency dated June 1, 1965, authorizing Firstar
Bank of Minnesota, N. A. to act as fiduciary.
b. A copy of the certificate of authority of the
trustee to commence business issued June 9, 1903,
by the Comptroller of the Currency to Firstar Bank
of Minnesota, N.A.
<PAGE> 3
Exhibit 3. A copy of the authorization of the trustee to exercise
corporate trust powers issued by the Federal Reserve
Board.
Exhibit 4. Copy of the By-Laws of the trustee as now in effect.
Exhibit 5. Copy of each Indenture referred to in Item 4.
Exhibit 6. The consent of the trustee required by Section 321(b)
of the Act.
Exhibit 7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligor within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligor, or affiliates, are based
upon information furnished to the Trustee by the obligor. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, a national banking association organized and existing under the laws of
the United States, has duly caused this statement of eligibility and
qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, and its seal to be hereunto affixed and attested, all in the City of
Saint Paul and State of Minnesota on the 16th day of August, 1999.
FIRSTAR BANK, N.A.,
f/k/a FIRSTAR BANK OF MINNESOTA, N.A.
(Seal)
/s/ Frank P. Leslie III
--------------------------------------------
Frank P. Leslie III, Vice President
<PAGE> 4
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939, the
undersigned, Firstar Bank of Minnesota, N.A., hereby consents that reports of
examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Dated: August 16, 1999
FIRSTAR BANK, N.A.,
f/k/a/ FIRSTAR BANK OF MINNESOTA, N.A.
/s/ Frank P. Leslie III
-------------------------------------------
Frank P. Leslie III, Vice President
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
JUNO LIGHTING, INC.
OFFER TO EXCHANGE
11 7/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2009,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
PURSUANT TO THE PROSPECTUS, DATED , 1999,
FOR ALL ISSUED AND OUTSTANDING
11 7/8% SERIES A SENIOR SUBORDINATED NOTES DUE 2009
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
1999, UNLESS THE EXCHANGE OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN PRIOR TO
5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
The Exchange Agent for the Exchange Offer is:
FIRSTAR BANK, N.A.
<TABLE>
<S> <C> <C>
By Regular or Certified Mail: By Facsimile: By Overnight Courier or Hand:
(Eligible Guarantor
Institutions Only)
Firstar Bank, N.A. 651-229-6415 Firstar Bank, N.A.
101 E. Fifth Street 101 E. Fifth Street
St. Paul, Minnesota 55101 To Confirm by Telephone St. Paul, Minnesota 55101
Attention: Frank Leslie or for Information Call: Attention: Frank Leslie
651-229-2600
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN THOSE
LISTED ABOVE, OR TRANSMISSION OF INSTRUCTIONS BY FACSIMILE OTHER THAN AS SET
FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY OF YOUR OLD NOTES.
By signing this Letter of Transmittal, you hereby acknowledge that you have
received and reviewed the Prospectus, dated , 1999, of Juno Lighting,
Inc. and this Letter of Transmittal. The Prospectus, together with this Letter
of Transmittal, constitutes Juno Lighting, Inc.'s offer to exchange an aggregate
principal amount of up to $125,000,000 of our 11 7/8% Senior Series B
Subordinated Notes due 2009 (the "New Notes"), which have been registered under
the Securities Act of 1933, as amended (the "Securities Act"), for a like
principal amount of our issued and outstanding 11 7/8% Series A Senior
Subordinated Notes due 2009 (the "Old Notes"). The Old Notes were issued in
offerings under Rule 144A and Regulation S of the Securities Act that were not
registered under the Securities Act. This Exchange Offer is being extended to
all holders of the Old Notes.
If you decide to tender your Old Notes, and we accept the Old Notes, this
will constitute a binding agreement between you and Juno, subject to the terms
and conditions set forth in the Prospectus and this Letter of Transmittal.
Unless you comply with the procedures described in the Prospectus under the
caption "The Exchange Offer -- Guaranteed Delivery Procedures," you must do one
of the following on or prior to the expiration of the Exchange Offer to
participate in the Exchange Offer:
- tender your Old Notes by sending the certificates for your Old Notes, in
proper form for transfer, a properly completed and duly executed Letter
of Transmittal, with any required signature guarantees, and all other
documents required by this Letter of Transmittal to the Exchange Agent at
one of the addresses listed above; or
<PAGE> 2
- tender your Old Notes by using the book-entry transfer procedures
described in the Prospectus under the caption "The Exchange
Offer -- Book-Entry Transfer," and transmitting this Letter of
Transmittal, with any required signature guarantees, or an Agent's
Message (as defined below) instead of this Letter of Transmittal to the
Exchange Agent.
In order for a book-entry transfer to constitute a valid tender of your Old
Notes in the Exchange Offer, the Exchange Agent must receive a confirmation of
book-entry transfer (a "Book-Entry Confirmation") of your Old Notes into the
Exchange Agent's account at The Depository Trust Company prior to the expiration
of the Exchange Offer. The term "Agent's Message" means a message, transmitted
by The Depository Trust Company and received by the Exchange Agent and forming a
part of the Book-Entry Confirmation, which states that The Depository Trust
Company has received an express acknowledgment from you that you have received
and have agreed to be bound by the terms of this Letter of Transmittal. If you
use this procedure, we may enforce the Letter of Transmittal against you.
DELIVERY OF DOCUMENTS TO THE DEPOSITORY TRUST COMPANY'S BOOK-ENTRY TRANSFER
FACILITY WILL NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
If you are a holder of Old Notes and wish to tender your Old Notes in the
Exchange Offer, but (1) the Old Notes are not immediately available, (2) time
will not permit your Old Notes or other required documents to reach the Exchange
Agent before the expiration of the Exchange Offer, or (3) the procedure for
book-entry transfer cannot be completed prior to the expiration of the Exchange
Offer, you may tender Old Notes by following the procedures described in the
Prospectus under the caption "The Exchange Offer -- Guaranteed Delivery
Procedures."
Only registered holders of Old Notes -- which term, for purposes of this
Letter of Transmittal, includes any participant in The Depository Trust
Company's system whose name appears on a security position listing as the owner
of the Old Notes -- are entitled to tender their Old Notes for exchange in the
Exchange Offer. If you are a beneficial owner whose Old Notes are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
and you wish to tender your Old Notes in the Exchange Offer, you should promptly
contact the person in whose name the Old Notes are registered and instruct that
person to tender on your behalf. If you wish to tender in the Exchange Offer on
your own behalf, prior to completing and executing this Letter of Transmittal
and delivering the certificates for your Old Notes, you must either make
appropriate arrangements to register ownership of the Old Notes in your name or
obtain a properly completed bond power from the person in whose name the Old
Notes are registered.
YOU MUST COMPLETE THIS LETTER OF TRANSMITTAL IF YOU ARE A REGISTERED HOLDER
OF OLD NOTES -- WHICH TERM, FOR PURPOSES OF THIS LETTER OF TRANSMITTAL, INCLUDES
ANY PARTICIPANT IN THE DEPOSITORY TRUST COMPANY'S SYSTEM WHOSE NAME APPEARS ON A
SECURITY POSITION LISTING AS THE OWNER OF THE OLD NOTES -- AND EITHER (1) YOU
WISH TO TENDER THE CERTIFICATES REPRESENTING YOUR OLD NOTES TO THE EXCHANGE
AGENT TOGETHER WITH THIS LETTER OF TRANSMITTAL OR (2) YOU WISH TO TENDER YOUR
OLD NOTES BY BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT THE
DEPOSITORY TRUST COMPANY AND YOU ELECT TO SUBMIT THIS LETTER OF TRANSMITTAL TO
THE EXCHANGE AGENT INSTEAD OF AN AGENT'S MESSAGE.
In order to properly complete this Letter of Transmittal, you must: (1)
complete the box entitled "Description of Old Notes Tendered," (2) if
appropriate, check and complete the boxes relating to book-entry transfer and
guaranteed delivery and the boxes entitled "Special Issuance Instructions" and
"Special Delivery Instructions," (3) sign this Letter of Transmittal by
completing the box entitled "Sign Here" and (4) complete the box entitled
"Substitute Form W-9." By completing the box entitled "Description of Old Notes
Tendered" and signing below, you will have tendered your Old Notes for exchange
on the terms and conditions described in the Prospectus and this Letter of
Transmittal. You should read the detailed instructions below before completing
this Letter of Transmittal.
2
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
BOX BELOW TO BE COMPLETED BY ALL TENDERING HOLDERS OF OLD NOTES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES TENDERED
- ------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS
OF REGISTERED HOLDER 1 2 3
- ------------------------------------------------------------------------------------------------------------
AGGREGATE
PRINCIPAL PRINCIPAL
CERTIFICATE AMOUNT OF AMOUNT
NUMBER(S)* OLD NOTE(S) TENDERED**
-----------------------------------------------------------
<S> <C> <C> <C>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
TOTAL:
- ------------------------------------------------------------------------------------------------------------
* Need not be completed by holders who tender by book-entry transfer.
** Old Notes tendered by this Letter of Transmittal must be in denominations of $1,000 principal amount and
any integral multiple thereof. Unless otherwise indicated in column 3, a holder will be deemed to have
tendered ALL of the Old Notes represented by the certificate(s) listed in column 1. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 4
BOXES BELOW TO BE CHECKED AS APPLICABLE
[ ] CHECK HERE IF THE CERTIFICATE(S) REPRESENTING YOUR OLD NOTES IS BEING
TENDERED WITH THIS LETTER OF TRANSMITTAL.
[ ] CHECK HERE IF THE CERTIFICATE(S) REPRESENTING YOUR OLD NOTES HAS BEEN LOST,
DESTROYED OR STOLEN AND YOU REQUIRE ASSISTANCE IN OBTAINING A NEW
CERTIFICATE(S).
Certificate Number(s)
----------------------------------------------------------------------------
Principal Amount(s) Represented
-----------------------------------------------------------------------------
You must contact the Exchange Agent to obtain instructions for replacing
lost, destroyed or stolen certificate(s) representing Old Notes. (See
Instruction 12)
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
TO BE COMPLETED ONLY IF NEW NOTES OR OLD NOTES NOT
TENDERED OR EXCHANGED ARE TO BE ISSUED IN THE NAME OF
SOMEONE OTHER THAN THE REGISTERED HOLDER OF THE OLD
NOTES WHOSE NAME(S) APPEAR BELOW.
[ ] Old Note(s) to:
[ ] New Note(s) to:
Name:-----------------------------------------------
(PLEASE PRINT)
Address:
---------------------------------------------
-----------------------------------------------------
(ZIP CODE)
Telephone Number ( ) -
--------------------------
-----------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE INSTRUCTION 9)
- -------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
TO BE COMPLETED ONLY IF NEW NOTES OR OLD NOTES NOT
TENDERED OR EXCHANGED ARE TO BE DELIVERED TO SOMEONE
OTHER THAN THE REGISTERED HOLDER OF THE OLD NOTES
WHOSE NAME(S) APPEAR(S) BELOW OR TO THE REGISTERED
HOLDER AT AN ADDRESS OTHER THAN THAT SHOWN BELOW.
[ ] Old Note(s) to:
[ ] New Note(s) to:
Name:-----------------------------------------------
(PLEASE PRINT)
Address:
---------------------------------------------
-----------------------------------------------------
(ZIP CODE)
Telephone Number ( ) -
--------------------------
-----------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE INSTRUCTION 9)
- -------------------------------------------------------------
</TABLE>
4
<PAGE> 5
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD NOTES ARE BEING DELIVERED UNDER A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)
----------------------------------------------------------------------------
Window Ticket Number (if any)
-----------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
---------------------------------------------------------
Name of Institution Which Guaranteed Delivery
-------------------------------------------------------------
If delivered by Book-Entry Transfer, complete the following:
Name of Tendering Institution
- --------------------------------------------------------------------------------
Account Number
----------------------------------------------------------------------------
Transaction Code Number
----------------------------------------------------------------------------
BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO THE EXCHANGE AGENT'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution
- --------------------------------------------------------------------------------
Account Number
----------------------------------------------------------------------------
Transaction Code Number
----------------------------------------------------------------------------
[ ] CHECK HERE IF OLD NOTES THAT ARE NOT TENDERED OR NOT EXCHANGED ARE TO BE
RETURNED BY CREDITING. THE DEPOSITORY TRUST COMPANY ACCOUNT NUMBER
INDICATED ABOVE.
5
<PAGE> 6
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, as
described in the Prospectus and this Letter of Transmittal, I hereby tender to
Juno Lighting, Inc. the aggregate principal amount of Old Notes described above
in the box entitled "Description of Old Notes Tendered" in exchange for a like
principal amount of New Notes which have been registered under the Securities
Act.
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Notes tendered by this Letter of Transmittal in accordance
with the terms and conditions of the Exchange Offer -- including, if the
Exchange Offer is extended or amended, the terms and conditions of any extension
or amendment -- I hereby sell, assign and transfer to, or upon the order of,
Juno all right, title and interest in and to the Old Notes tendered by this
Letter of Transmittal. I hereby irrevocably constitute and appoint the Exchange
Agent as my agent and attorney-in-fact -- with full knowledge that the Exchange
Agent is also acting as the agent of Juno in connection with the Exchange
Offer -- with respect to the tendered Old Notes, with full power of
substitution, such power of attorney being deemed to be an irrevocable power
coupled with an interest, subject only to the right of withdrawal described in
the Prospectus, to (1) deliver certificates for the tendered Old Notes to Juno
together with all accompanying evidences of transfer and authenticity to, or
upon the order of, Juno, upon receipt by the Exchange Agent, as my agent, of the
New Notes to be issued in exchange for the tendered Old Notes, (2) present
certificates for the tendered Old Notes for transfer, and to transfer the
tendered Old Notes on the books of Juno, and (3) receive for the account of Juno
all benefits and otherwise exercise all rights of ownership of the tendered Old
Notes, all in accordance with the terms and conditions of the Exchange Offer.
I hereby represent and warrant that I have full power and authority to
tender, sell, assign and transfer the Old Notes tendered by this Letter of
Transmittal and that, when the tendered Old Notes are accepted for exchange,
Juno will acquire good, marketable and unencumbered title to the tendered Old
Notes, free and clear of all liens, restrictions, charges and encumbrances, and
that the tendered Old Notes are not subject to any adverse claims or proxies. I
will, upon request, execute and deliver any additional documents deemed by Juno
or the Exchange Agent to be necessary or desirable to complete the exchange,
sale, assignment and transfer of the Old Notes tendered by this Letter of
Transmittal, and I will comply with my obligations under the Registration Rights
Agreement, dated as of June 30, 1999 (the "Registration Rights Agreement"), by
and among Juno, Juno's wholly owned subsidiaries, Juno Manufacturing, Inc., Indy
Lighting, Inc. and Advanced Fiberoptic Technologies, Inc., and Banc of America
Securities LLC and Credit Suisse First Boston Corporation. I have read and I
agree to all of the terms of the Exchange Offer.
The name(s) and address(es) of the registered holder(s) -- which term, for
purposes of this Letter of Transmittal, includes any participant in The
Depository Trust Company's system whose name appears on a security position
listing as the holder of the Old Notes -- of the Old Notes tendered by this
Letter of Transmittal are printed above as they appear on the certificate(s)
representing the Old Notes. The certificate number(s) and the Old Notes that I
wish to tender are indicated in the appropriate boxes above.
Unless I have otherwise indicated by completing the box entitled "Special
Issuance Instructions" above, I hereby direct that the New Notes be issued in
the name(s) of the undersigned or, in the case of a book-entry transfer of Old
Notes, that the New Notes be credited to the account indicated above maintained
with The Depository Trust Company. Similarly, unless I have otherwise indicated
by completing the box entitled "Special Delivery Instructions," I hereby direct
that the New Notes be delivered to the address shown below my signature.
If I have (1) tendered any Old Notes that are not exchanged in the Exchange
Offer for any reason or (2) submitted certificates for more Old Notes than I
wish to tender, unless I have otherwise indicated by completing the boxes
entitled "Special Issuance Instructions" or "Special Delivery Instructions," I
hereby direct that certificates for any Old Notes that are not tendered or not
exchanged should be issued in the name of the undersigned, if applicable, and
delivered to the address shown below my signature or, in the case of a
book-entry transfer of Old Notes, that Old Notes that are not tendered or not
exchanged be credited to the account indicated above maintained with The
Depository Trust Company, in each case, at Juno's expense, promptly following
the expiration or termination of the Exchange Offer.
6
<PAGE> 7
I understand that if I decide to tender Old Notes, and Juno accepts the Old
Notes for exchange, this will constitute a binding agreement between me and
Juno, subject to the terms and conditions set forth in the Prospectus and this
Letter of Transmittal.
I also recognize that, under certain circumstances described in the
Prospectus under the caption "The Exchange Offer -- Conditions to the Exchange
Offer," Juno may not be required to accept for exchange any of the Old Notes
tendered by this Letter of Transmittal.
By tendering Old Notes and executing this Letter of Transmittal, or
delivering an Agent's Message instead of this Letter of Transmittal, I hereby
represent and agree that: (1) I am not an "affiliate" (as defined in Rule 144
under the Securities Act) of Juno; (2) any New Notes I receive in the Exchange
Offer are being acquired by me in my ordinary course of business; (3) neither I
nor anyone receiving New Notes from me has any arrangement or understanding with
any person to participate in a distribution in violation of the Securities Act
of the New Notes to be issued in the Exchange Offer; (4) if I am not a
Participating Broker Dealer (as defined below), I am not engaged in, and do not
intend to engage in, a distribution of the New Notes; and (5) if I am a
Participating Broker-Dealer, I will receive the New Notes for my own account in
exchange for Old Notes that I acquired as a result of my market-making or other
trading activities and I will deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of the New Notes I receive in
the Exchange Offer. As used in this Letter of Transmittal, a "Participating
Broker-Dealer" is a broker-dealer that receives New Notes for its own account in
exchange for Old Notes that it acquired as a result of market-making or other
trading activities (other than Old Notes acquired directly from Juno or any
affiliate of Juno). If I am a Participating Broker-Dealer, by making the
representation set forth above and delivering a prospectus in connection with
any resale transaction involving the New Notes, I understand that I will not be
deemed to have admitted that I am an "underwriter" within the meaning of the
Securities Act. If I am using the Exchange Offer to participate in a
distribution of the New Notes, I acknowledge and agree that, if the resales are
of New Notes obtained by me in exchange for Old Notes acquired by me in the
Exchange Offer directly from Juno or an affiliate thereof, I (1) could not,
under Securities and Exchange Commission policy as in effect on June 30, 1999,
rely on the position of the Commission enunciated in Morgan Stanley and Co.,
Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available
May 13, 1988), as interpreted in the Commission's letter to Shearman & Sterling
dated July 2, 1993, and similar no-action letters, and (2) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction and that such a secondary resale
transaction must be covered by an effective registration statement containing
the selling security holder information required by Item 507 or 508, as
applicable, of Regulation S-K under the Securities Act.
To the extent necessary to ensure that the Prospectus is available for
sales of New Notes acquired by Participating Broker-Dealers, Juno and the
guarantors agree to use their respective reasonable best efforts to keep the
Registration Statement of which the Prospectus forms a part continuously
effective, supplemented, amended and current as required by and subject to the
Registration Rights Agreement and in conformity with the requirements of the
Registration Rights Agreement, the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of
180 days from the date the Exchange Offer is consummated or such shorter period
as provided in the Registration Rights Agreement. Each Participating
Broker-Dealer, by tendering Old Notes and executing this Letter of Transmittal,
or delivering an Agent's Message instead of this Letter of Transmittal, agrees
that, upon receipt of notice from Juno of the occurrence of any event or the
discovery of any fact which makes any statement contained or incorporated by
reference in the Prospectus untrue in any material respect or which causes the
Prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference in the Prospectus, in light of
the circumstances under which they were made, not misleading, the Participating
Broker-Dealer will suspend the sale of New Notes under the Prospectus. Each
Participating Broker-Dealer further agrees that, upon receipt of a notice from
Juno to suspend the sale of New Notes as provided above, the Participating
Broker-Dealer will suspend resales of the New Notes until (1) Juno has amended
or supplemented the Prospectus to correct the misstatement or omission and has
furnished copies of the amended or supplemented Prospectus to the Participating
Broker-Dealer or (2) Juno has given notice that the sale of the New Notes may be
resumed, as the case may be. If Juno gives notice to suspend the sale of the
7
<PAGE> 8
New Notes as provided above, it will extend the period referred to above during
which Participating Broker-Dealers are entitled to use the Prospectus in
connection with the resale of New Notes by the number of days during the period
from and including the date of the giving of such notice to and including the
date when Participating Broker-Dealers receive copies of the supplemented or
amended Prospectus necessary to permit resales of the New Notes or to and
including the date on which Juno has given notice that the sale of New Notes may
be resumed, as the case may be.
As a result, a Participating Broker-Dealer who intends to use the
Prospectus in connection with resales of New Notes received in exchange for Old
Notes in the Exchange Offer must notify Juno, on or prior to the expiration of
the Exchange Offer, that it is a Participating Broker-Dealer. Participating
Broker-Dealers must send the required written notice to Juno's executive offices
located at 1300 South Wolf Road, Des Plaines, Illinois 60018, Attention: George
J. Bilek, Vice President, Finance, and this notice must be received by Juno at
or prior to the expiration of the Exchange Offer.
Interest on the New Notes will accrue (1) from the later of (a) the last
date to which interest was paid on the Old Notes surrendered in exchange for the
New Notes or (b) if the Old Notes are surrendered for exchange on a date in a
period which includes the record date for an interest payment date to occur on
or after the date of the exchange and as to which interest will be paid, the
date to which interest will be paid on such interest payment date or (2) if no
interest has been paid on the Old Notes, from July 1, 1999.
All authority conferred in or agreed to be conferred in this Letter of
Transmittal will survive my death or incapacity, and any obligation of mine
under this Letter of Transmittal will be binding upon my heirs, executors,
administrators, personal representatives, trustees in bankruptcy, legal
representatives, successors and assigns. Except as stated in the Prospectus,
this tender is irrevocable.
8
<PAGE> 9
SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
This Letter of Transmittal must be signed by (1) the registered
holder(s) -- which term, for purposes of this Letter of Transmittal, includes
any participant in The Depository Trust Company's system whose name appears on a
security position listing as the holder of the Old Notes -- exactly as the
name(s) of the registered holder(s) appear(s) on the certificate(s) for the Old
Notes tendered or on the register of holders maintained by Juno, or (2) by any
person(s) authorized to become the registered holder(s) by endorsements and
documents transmitted with this Letter of Transmittal -- including any opinions
of counsel, certifications and other information as may be required by Juno for
the Old Notes to comply with the restrictions on transfer applicable to the Old
Notes. If the signature below is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or another acting in a
similar fiduciary or representative capacity, please set forth the signer's full
title. See Instruction 5.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF NOTEHOLDER(S)
DATED: , 1999
------------------------------------------------------------------
NAME(S)
-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
CAPACITY
------------------------------------------------------------------------
ADDRESS
-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(ZIP CODE)
TAX IDENTIFICATION OR
SOCIAL SECURITY NO.
-------------------------------------------------------------
(SEE INSTRUCTION 9)
AREA CODE AND TELEPHONE NO.
-----------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) GUARANTEED
(SEE INSTRUCTION 2, IF REQUIRED)
ELIGIBLE GUARANTOR INSTITUTION
--------------------------------------------------
OFFICIAL SIGNATURE
--------------------------------------------------------------
DATED: , 1999
--------------------------------------------------------------
9
<PAGE> 10
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: FIRSTAR BANK, N.A.
- --------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT --------------------------
FORM W-9 AND CERTIFY BY SIGNING AND DATING BELOW.
DEPARTMENT OF THE TREASURY Social Security Number
INTERNAL REVENUE SERVICE (If awaiting TIN write
"Applied For")
OR
--------------------------
Employer Identification
Number
(If awaiting TIN write
"Applied For")
------------------------------------------------------------------------------------------
PAYER'S REQUEST FOR TAXPAYER PART 2 -- CERTIFICATE -- Under penalties of perjury, I certify that:
IDENTIFICATION NUMBER ("TIN") (1) The number shown on this form is my correct Taxpayer Identification Number (or I
am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding.
------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been notified
by the IRS that you are currently subject to backup withholding because of underreporting
interest or dividends on your tax returns. However, if after being notified by the IRS
that you are subject to backup withholding, you receive another notification from the IRS
that you are no longer subject to backup withholding, do not cross out such item (2).
(Also see instructions in the enclosed Guidelines).
------------------------------------------------------------------------------------------
SIGNATURE DATE , 1999
------------------------------------------------------------------------------------------
PART 3 -- AWAITING TIN [ ]
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY CASH PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a Taxpayer Identification Number to the Depositary by the
time of payment, 31% of all reportable payments made to me thereafter will be
withheld, but that such amounts will be refunded to me if I provide a certified
Taxpayer Identification Number to the Depositary within sixty (60) days.
- ---------------------------------------------
- ---------------------------------------------, 1999
Signature Date
10
<PAGE> 11
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. You must complete this Letter of Transmittal if you are a holder of
Old Notes -- which term, for purposes of this Letter of Transmittal, includes
any participant in The Depository Trust Company's system whose name appears on a
security position listing as the holder of the Old Notes -- and either (1) you
wish to tender the certificates representing your Old Notes to the Exchange
Agent together with this Letter of Transmittal or (2) you wish to tender your
Old Notes by book-entry transfer to the Exchange Agent's account at The
Depository Trust Company and you elect to submit this Letter of Transmittal to
the Exchange Agent instead of an Agent's Message. In order to constitute a valid
tender of your Old Notes, unless you comply with the procedures for Guaranteed
Delivery described below, the Exchange Agent must receive the following
documents at one of the addresses listed above on or prior to the expiration of
the Exchange Offer: (1) certificates for the Old Notes, in proper form for
transfer, or Book-Entry Confirmation of transfer of the Old Notes into the
Exchange Agent's account at The Depository Trust Company, (2) a properly
completed and duly executed Letter of Transmittal, with any required signature
guarantees, or, in the case of a Book-Entry Confirmation, an Agent's Message
instead of this Letter of Transmittal, and (3) all other documents required by
this Letter of Transmittal. Old Notes tendered in the Exchange Offer must be in
denominations of $1,000 principal amount and any integral multiple thereof.
If you are a holder of the Old Notes and wish to tender your Old Notes, but
(1) the certificates for Old Notes are not immediately available, (2) time will
not permit your certificates for Old Notes or other required documents to reach
the Exchange Agent before the expiration of the Exchange Offer, or (3) the
procedure for book-entry transfer cannot be completed prior to the expiration of
the Exchange Offer, you may effect a tender if: (1) the tender is made through
an Eligible Guarantor Institution (as defined below); (2) prior to the
expiration of the Exchange Offer, the Exchange Agent receives from an Eligible
Guarantor Institution a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form we have provided, setting forth
your name and address and the amount of Old Notes you are tendering and stating
that the tender is being made by Notice of Guaranteed Delivery; and (3) the
Exchange Agent receives within three New York Stock Exchange, Inc. ("NYSE")
trading days after the date of execution of the Notice of Guaranteed Delivery:
(a) the certificates for all physically tendered Old Notes, in proper form for
transfer, or a Book-Entry Confirmation of transfer of the Old Notes into the
Exchange Agent's account at The Depository Trust Company, as the case may be,
(b) a properly completed and duly executed Letter of Transmittal, with any
required signature guarantees, or, in the case of a Book-Entry Confirmation, an
Agent's Message instead of the Letter of Transmittal, and (c) all other
documents required by the Letter of Transmittal. The Notice of Guaranteed
Delivery may be sent by overnight courier, hand delivery, registered or
certified mail or facsimile transmission and must include a guarantee by an
Eligible Guarantor Institution in the form set forth in the Notice.
THE METHOD OF DELIVERY OF CERTIFICATES FOR OLD NOTES, LETTERS OF
TRANSMITTAL, AGENT'S MESSAGES AND ALL OTHER REQUIRED DOCUMENTS IS AT YOUR
ELECTION. IF YOU DELIVER YOUR OLD NOTES BY MAIL, WE RECOMMEND REGISTERED MAIL,
PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED. IN ALL CASES, YOU SHOULD ALLOW
SUFFICIENT TIME TO ASSURE TIMELY DELIVERY. DO NOT SEND CERTIFICATES FOR OLD
NOTES, LETTERS OF TRANSMITTAL, AGENT'S MESSAGES OR OTHER REQUIRED DOCUMENTS TO
JUNO.
Juno will not accept any alternative, conditional or contingent tenders.
Each tendering holder, by execution of this Letter of Transmittal or delivery of
an Agent's Message instead of the Letter of Transmittal, waives any right to
receive any notice of the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(a) this Letter of Transmittal is signed by the registered holder -- which
term, for purposes of this Letter of Transmittal, includes any
participant in The Depository Trust Company's system whose name appears
on a security position listing as the owner of the Old Notes -- of Old
Notes tendered
11
<PAGE> 12
with this Letter of Transmittal, unless such holder(s) has completed
either the box entitled "Special Issuance Instructions" or the box
entitled "Special Delivery Instructions" above, or
(b) the Old Notes are tendered for the account of a firm that is an
Eligible Guarantor Institution.
In all other cases, an Eligible Guarantor Institution must guarantee the
signature(s) on this Letter of Transmittal. See Instruction 5.
An "Eligible Guarantor Institution" (as defined in Rule 17Ad-15 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
means:
- Banks (as defined in Section 3(a) of the Federal Deposit Insurance Act);
- Brokers, dealers, municipal securities dealers, municipal securities
brokers, government securities dealers and government securities brokers
(as defined in the Exchange Act);
- Credit unions (as defined in Section 19B(1)(A) of the Federal Reserve
Act);
- National securities exchanges, registered securities associations and
clearing agencies (as these terms are defined in the Exchange Act); and
- Savings associations (as defined in Section 3(b) of the Federal Deposit
Insurance Act).
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Old Notes Tendered" is inadequate, the certificate number(s)
and/or the principal amount of Old Notes and any other required information
should be listed on a separate signed schedule which is attached to this Letter
of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Notes will be
accepted only in denominations of $1,000 principal amount and integral multiples
thereof. If you are tendering less than all of the Old Notes evidenced by any
certificate you are submitting, please fill in the principal amount of Old Notes
which are to be tendered in column 3 ("Principal Amount of Old Notes Tendered")
of the box entitled "Description of Old Notes Tendered." In that case, unless
you have otherwise indicated by completing the boxes entitled "Special Issuance
Instructions" or "Special Delivery Instructions", new certificate(s) for the
remainder of the Old Notes that were evidenced by your old certificate(s) will
be sent to the registered holder of the Old Notes, promptly after the expiration
of the Exchange Offer. All Old Notes represented by certificates delivered to
the Exchange Agent will be deemed to have been tendered unless otherwise
indicated.
Except as otherwise provided in this Letter of Transmittal, tenders of Old
Notes may be withdrawn at any time on or prior to the expiration of the Exchange
Offer. For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent prior to the expiration of the Exchange Offer at
one of the addresses listed above. Any notice of withdrawal must specify the
name of the person who tendered the Old Notes to be withdrawn, identify the Old
Notes to be withdrawn, including the principal amount of the Old Notes, and,
where certificates for Old Notes have been transmitted, specify the name in
which the Old Notes are registered, if different from that of the withdrawing
holder. If certificates for Old Notes have been delivered or otherwise
identified to the Exchange Agent, then, prior to the release of the
certificates, the withdrawing holder must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an Eligible Guarantor Institution unless the holder is
an Eligible Guarantor Institution. If Old Notes have been tendered using the
procedure for book-entry transfer described in the Prospectus under the caption
"The Exchange Offer -- Book-Entry Transfer," any notice of withdrawal must
specify the name and number of the account at The Depository Trust Company to be
credited with the withdrawn Old Notes and otherwise comply with the procedures
of the book-entry transfer facility. All questions as to the validity, form and
eligibility -- including time of receipt -- of these notices will be determined
by Juno. Any such determination will be final and binding. Any Old Notes so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the Exchange Offer. Any Old Notes which have been tendered for
exchange but which are not exchanged for any reason will be returned to the
registered holder without cost to that holder as soon as practicable after
withdrawal, non-acceptance of tender or termination of the Exchange Offer. In
the case of Old Notes tendered using the
12
<PAGE> 13
procedure for book-entry transfer described in the Prospectus under the caption
"The Exchange Offer -- Book-Entry Transfer," the Old Notes will be credited to
the tendering holder's account with The Depository Trust Company. Properly
withdrawn Old Notes may be retendered at any time on or prior to the expiration
of the Exchange Offer by following one of the procedures described in the
Prospectus under the caption "The Exchange Offer -- Procedures for Tendering Old
Notes."
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Old
Notes tendered hereby, the signature(s) must correspond exactly with the name(s)
as written on the face of the certificate(s) without alteration, enlargement or
any change whatsoever.
If any of the Old Notes tendered hereby are registered in the name of two
or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Notes are registered in different name(s) on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registered holders.
When this Letter of Transmittal is signed by the registered holder(s) of
the Old Notes listed and transmitted by this Letter of Transmittal, no
endorsement(s) of certificate(s) or separate bond power(s) are required unless
New Notes are to be issued in the name of a person other than the registered
holder(s). Signature(s) on the certificate(s) or bond power(s) must be
guaranteed by an Eligible Guarantor Institution.
If a person or persons other than the registered holder(s) of Old Notes
signs the Letter of Transmittal, certificates for the Old Notes must be endorsed
or accompanied by appropriate bond powers, signed exactly as the name or names
of the registered holder(s) that appears on the certificates for the Old Notes
and also must be accompanied by any opinions of counsel, certifications and
other information as Juno may require in accordance with the restrictions on
transfer applicable to the Old Notes. Signatures on certificates or bond powers
must be guaranteed by an Eligible Guarantor Institution.
If you are a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation, or act in a similar fiduciary or representative
capacity, and wish to sign this Letter of Transmittal or any certificates for
Old Notes or bond powers, you must indicate your status when signing. If you are
acting in any of these capacities, you must submit proper evidence satisfactory
to us of your authority to so act unless we waive this requirement.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Notes are to be
issued in the name of a person other than the signer of this Letter of
Transmittal, or if New Notes are to be delivered to someone other than the
signer of this Letter of Transmittal or to an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
Certificates for Old Notes not exchanged will be returned by mail or, if
tendered by book-entry transfer, by crediting the account indicated above
maintained with The Depository Trust Company. See Instruction 4.
7. IRREGULARITIES. All questions as to the validity, form,
eligibility -- including time of receipt -- and acceptance of Old Notes tendered
for exchange will be determined by Juno in its sole discretion. Our
determination will be final and binding. We reserve the absolute right to reject
any and all tenders of Old Notes improperly tendered or to not accept any Old
Notes, the acceptance of which might be unlawful as determined by us or our
counsel. We also reserve the absolute right to waive any defects or
irregularities or conditions of the Exchange Offer as to any Old Notes either
before or after the expiration of the Exchange Offer -- including the right to
waive the ineligibility of any holder who seeks to tender Old Notes in the
Exchange Offer. Our interpretation of the terms and conditions of the Exchange
Offer as to any particular Old Notes either before or after the expiration of
the Exchange Offer -- including the terms and conditions of the Letter of
Transmittal and the accompanying instructions -- will be final and binding.
Unless waived, any defects or irregularities in connection with tenders of Old
Notes for exchange must be cured within a reasonable period of time, as
determined by us. Neither we, the Exchange Agent nor any other person has any
duty to give notification of any defect or irregularity with respect to any
tender of Old Notes for exchange, nor will we have any liability for failure to
give such notification.
13
<PAGE> 14
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Exchange Agent at the addresses
and telephone number listed on the front of this Letter of Transmittal.
Additional copies of the Prospectus, this Letter of Transmittal or the Notice of
Guaranteed Delivery may be obtained from the Exchange Agent or from your broker,
dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a holder whose tendered Old Notes are accepted for exchange is required
to provide the Exchange Agent with the holder's correct taxpayer identification
number ("TIN") on Substitute Form W-9 above. If the Exchange Agent is not
provided with the correct TIN, the Internal Revenue Service may subject the
holder or other payee to a $50 penalty. In addition, cash payments to such
holders or other payees with respect to Old Notes exchanged in the Exchange
Offer may be subject to 31% backup withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 3 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number above in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain all amounts
withheld during the 60-day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60-day period
will be remitted to the holder and no further amounts will be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within the 60-day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered holder of
the Old Notes or of the last transferee appearing on the transfers attached to,
or endorsed on, the Old Notes. If the Old Notes are registered in more than one
name or are not in the name of the actual holder, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.
Certain holders -- including, among others, corporations, financial
institutions and certain foreign persons -- may not be subject to these backup
withholding and reporting requirements. These holders should nevertheless
complete the Substitute Form W-9 above, and check the box in Part 2 of the
Substitute Form W-9, to avoid possible erroneous backup withholding. A foreign
person may qualify as an exempt recipient by submitting a properly completed IRS
Form W-8, signed under penalties of perjury, attesting to that holder's exempt
status. Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather,
the U.S. Federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If backup withholding results in
an overpayment of taxes, a refund may be obtained.
10. WAIVER OF CONDITIONS. Juno's obligation to complete the Exchange Offer
is subject to the conditions described in the Prospectus under the caption "The
Exchange Offer -- Terms of the Exchange Offer; Period for Tendering Old Notes."
These conditions are for our benefit only and we may assert them regardless of
the circumstances giving rise to any condition. We may also waive any condition
in whole or in part at any time in our sole discretion. Our failure at any time
to exercise any of the foregoing rights will not constitute a waiver of that
right and each right is an ongoing right that we may assert at any time.
11. NO CONDITIONAL TENDERS. No alternative, conditional or contingent
tenders will be accepted. All tendering holders of Old Notes, by execution of
this Letter of Transmittal, waive any right to receive notice of the acceptance
of Old Notes for exchange.
14
<PAGE> 15
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Old Notes have been lost, destroyed or stolen, the holder should
check the box above regarding lost, destroyed or stolen certificates and
promptly notify the Exchange Agent. The holder will then be instructed as to the
steps that must be taken in order to replace the certificate(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen certificate(s) have been followed.
13. TRANSFER TAXES. You will not be obligated to pay any transfer taxes in
connection with the tender of Old Notes in the Exchange Offer unless you
instruct us to register New Notes in the name of, or request that Old Notes not
tendered or not accepted in the Exchange Offer be returned to, a person other
than the registered tendering holder. In those cases, you will be responsible
for the payment of any applicable transfer tax. If satisfactory evidence of
payment of these taxes or an exemption from payment is not submitted with this
Letter of Transmittal, no certificates for New Notes will be issued until such
evidence is received by the Exchange Agent.
IMPORTANT: UNLESS YOU COMPLY WITH THE GUARANTEED DELIVERY PROCEDURES
DESCRIBED ABOVE, THIS LETTER OF TRANSMITTAL (OR A FACSIMILE OF THIS LETTER OF
TRANSMITTAL), OR, IN THE CASE OF OLD NOTES TENDERED BY BOOK-ENTRY TRANSFER TO
THE EXCHANGE AGENT'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY, AN AGENT'S MESSAGE
INSTEAD OF THIS LETTER OF TRANSMITTAL, AND ALL OTHER REQUIRED DOCUMENTS MUST BE
RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION OF THE EXCHANGE
OFFER.
15
<PAGE> 1
EXHIBIT 99.2
JUNO LIGHTING, INC.
OFFER TO EXCHANGE
11 7/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2009,
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED,
FOR ALL ISSUED AND OUTSTANDING
11 7/8% SERIES A SENIOR SUBORDINATED NOTES DUE 2009
To: Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Juno Lighting, Inc. ("Juno) is offering, subject to the terms and
conditions set forth in the Prospectus, dated , 1999 (the
"Prospectus"), relating to the offer (the "Exchange Offer") of Juno to exchange
an aggregate principal amount of up to $125,000,000 of our 10 7/8% Series B
Senior Subordinated Exchange Notes due 2009 (the "New Notes"), which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
for a like principal amount of our issued and outstanding 11 7/8% Series A
Senior Subordinated Notes due 2009 (the "Old Notes"). The Old Notes were issued
on June 30, 1999 in offerings under Rule 144A and Regulation S of the Securities
Act that were not registered under the Securities Act. The Exchange Offer is
being extended to all holders of the Old Notes in order to satisfy certain
obligations of Juno contained in the Registration Rights Agreement, dated as of
June 30, 1999, among Juno, Juno's wholly owned subsidiaries, Juno Manufacturing,
Inc., Indy Lighting, Inc., and Advanced Fiberoptic Technologies, Inc., and Banc
of America Securities LLC and Credit Suisse First Boston Corporation. The New
Notes are substantially identical to the Old Notes, except that the transfer
restrictions and registration rights applicable to the Old Notes do not apply to
the New Notes.
We are requesting that you contact your clients for whom you hold Old Notes
regarding the Exchange Offer. For your information and for forwarding to your
clients for whom you hold Old Notes registered in your name or in the name of
your nominee, or who hold Old Notes registered in their own names, we are
enclosing the following documents:
1. Prospectus dated , 1999;
2. The Letter of Transmittal for your use and for the information of your
clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer
if (a) certificates for the Old Notes are not immediately available, (b) time
will not permit the certificates for the Old Notes or other required documents
to reach the Exchange Agent before the expiration of the Exchange Offer or (c)
the procedure for book-entry transfer cannot be completed prior to the
expiration of the Exchange Offer;
4. A form of letter which may be sent to your clients for whose account you
hold Old Notes registered in your name or the name of your nominee, with space
provided for obtaining the clients' instructions with respect to the Exchange
Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelopes addressed to Firstar Bank, N.A., the Exchange Agent for
the Exchange Offer.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON , 1999, UNLESS THE EXCHANGE OFFER IS
EXTENDED (AS IT MAY BE EXTENDED, THE "EXPIRATION DATE"). OLD NOTES TENDERED
PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE
EXPIRATION DATE.
<PAGE> 2
Unless a holder of Old Notes complies with the procedures described in the
Prospectus under the caption "-- Guaranteed Delivery Procedures," the holder
must do one of the following on or prior to the Expiration Date to participate
in the Exchange Offer:
- tender the Old Notes by sending the certificates for the Old Notes, in
proper form for transfer, a properly completed and duly executed Letter
of Transmittal, with any required signature guarantees, and all other
documents required by the Letter of Transmittal, to Firstar Bank, N.A.,
as Exchange Agent, at one of the addresses listed in the Prospectus under
the caption "-- Exchange Agent"; or
- tender the Old Notes by using the book-entry procedures described in the
Prospectus under the caption "-- Book-Entry Transfer" and transmitting a
properly completed and duly executed Letter of Transmittal, with any
required signature guarantees, or an Agent's Message instead of the
Letter of Transmittal, to the Exchange Agent.
In order for a book-entry transfer to constitute a valid tender of Old Notes in
the Exchange Offer, the Exchange Agent must receive a confirmation of book-entry
transfer (a "Book-Entry Confirmation") of the Old Notes into the Exchange
Agent's account at The Depository Trust Company prior to the Expiration date.
The term "Agent's Message" means a message, transmitted by the Depository Trust
Company and received by the Exchange Agent and forming a part of the Book-Entry
Confirmation, which states that The Depository Trust Company has received an
express acknowledgment from the tendering holder of Old Notes that the holder
has received and has agreed to be bound by the Letter of Transmittal.
If a registered holder of Old Notes wishes to tender the Old Notes in the
Exchange Offer, but (a) the certificates for the Old Notes are not immediately
available, (b) time will not permit the certificates for the Old Notes or other
required documents to reach the Exchange Agent before the Expiration Date, or
(c) the procedure for book-entry transfer cannot be completed before the
Expiration Date, a tender of Old Notes may be effected by following the
Guaranteed Delivery Procedures described in the Prospectus under the caption
"The Exchange Offer -- Guaranteed Delivery Procedures."
Juno will, upon request, reimburse brokers, dealers, commercial banks,
trust companies and other nominees for reasonable and necessary costs and
expenses incurred by them in forwarding the Prospectus and the related documents
to the beneficial owners of Old Notes held by them as nominee or in a fiduciary
capacity. Juno will pay or cause to be paid all stock transfer taxes applicable
to the exchange of Old Notes in the Exchange Offer, except as set forth in
Instruction 13 of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed to Firstar
Bank, N.A., the Exchange Agent for the Exchange Offer, at its address and
telephone number set forth on the front of the Letter of Transmittal.
Very truly yours,
JUNO LIGHTING, INC.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF JUNO OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM
WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE
PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
2
<PAGE> 1
EXHIBIT 99.3
JUNO LIGHTING, INC.
OFFER TO EXCHANGE
11 7/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2009,
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED,
FOR ALL ISSUED AND OUTSTANDING
11 7/8% SERIES A SENIOR SUBORDINATED NOTES DUE 2009
To Our Clients:
Enclosed for your consideration is a Prospectus, dated , 1999
(the "Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of Juno Lighting,
Inc. ("Juno") to exchange an aggregate principal amount of up to $125,000,000 of
its 11 7/8% Series B Senior Subordinated Notes due 2009 (the "New Notes"), which
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), for a like principal amount of its issued and outstanding
11 7/8% Series A Senior Subordinated Notes due 2009 (the "Old Notes"), which
were issued in offerings under Rule 144A and Regulation S of the Securities Act
that were not registered under the Securities Act. The Exchange Offer is being
extended to all holders of the Old Notes in order to satisfy certain obligations
of Juno contained in the Registration Rights Agreement, dated as of June 30,
1999, among Juno, Juno's wholly owned subsidiaries, Juno Manufacturing, Inc.,
Indy Lighting, Inc., and Advanced Fiberoptic Technologies, Inc., and Banc of
America Securities LLC and Credit Suisse First Boston Corporation. The New Notes
are substantially identical to the Old Notes, except that the transfer
restrictions and registration rights relating to the Old Notes do not apply to
the New Notes.
These materials are being forwarded to you as the beneficial owner of the
Old Notes held by us for your account but not registered in your name. A TENDER
OF SUCH OLD NOTES MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Old Notes held by us for your account, pursuant to the terms and
conditions set forth in the enclosed Prospectus and Letter of Transmittal.
Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender the Old Notes on your behalf in accordance with the
provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 P.M.,
New York City time, on , 1999, unless the Exchange Offer is extended.
Any Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any
time before the expiration of the Exchange Offer.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Old Notes.
2. The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offer -- Conditions to the Exchange
Offer."
3. Any transfer taxes incident to the transfer of Old Notes from the holder
to Juno will be paid by Juno, except as otherwise provided in Instruction 13 of
the Letter of Transmittal.
4. The Exchange Offer expires at 5:00 P.M., New York City time, on
, 1999, unless the Exchange Offer is extended.
If you wish to have us tender your Old Notes, please so instruct us by
completing, executing and returning to us the instruction form on the back of
this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION ONLY
AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER OLD NOTES.
<PAGE> 2
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
materials referred to therein relating to the Exchange Offer made by Juno
Lighting, Inc. with respect to its Old Notes.
This will instruct you to tender the Old Notes held by you for the account
of the undersigned, subject to the terms and conditions set forth in the
Prospectus and the related Letter of Transmittal.
Please tender the Old Notes held by you for my account as indicated below:
11 7/8% Series A Senior Subordinated Notes due 2009 $
--------------------------------------------
Aggregate Principal Amount of Old Notes
[ ] Please do not tender any Old Notes held by you for my account.
Dated: __________ , 1999
Signature(s):
- --------------------------------------------------------------------------------
Print Name(s) here:
- --------------------------------------------------------------------------------
Print Address(es):
- --------------------------------------------------------------------------------
Area Code and Telephone Number(s):
---------------------------------------------------------------------
Tax Identification or Social Security Number(s):
----------------------------------------------------------
NONE OF THE OLD NOTES HELD BY US FOR YOUR ACCOUNT WILL BE TENDERED UNLESS
WE RECEIVE WRITTEN INSTRUCTIONS FROM YOU TO DO SO. UNLESS A SPECIFIC CONTRARY
INSTRUCTION IS GIVEN IN THE SPACE PROVIDED, YOUR SIGNATURE(S) HEREON SHALL
CONSTITUTE AN INSTRUCTION TO US TO TENDER ALL THE OLD NOTES HELD BY US FOR YOUR
ACCOUNT.
2
<PAGE> 1
EXHIBIT 99.4
JUNO LIGHTING, INC.
NOTICE OF GUARANTEED DELIVERY
This form or one substantially equivalent to this form must be used to
accept the offer (the "Exchange Offer") of Juno Lighting, Inc. ("Juno") to
exchange an aggregate principal amount of up to $125,000,000 of its 11 7/8%
Series B Senior Subordinated Notes due 2009 (the "New Notes"), which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
for a like principal amount of our issued and outstanding 11 7/8% Series A
Senior Subordinated Notes due 2009 (the "Old Notes"), which were issued in
offerings under Rule 144A and Regulation S of the Securities Act that were not
registered under the Securities Act. The Exchange Offer will expire at 5:00
p.m., New York City time, on , 1999, unless extended (as it may be
extended, the "Expiration Date"). As described in the enclosed Prospectus, dated
, 1999 (the "Prospectus"), if you are a registered holder of Old Notes
and wish to tender your Old Notes, but (1) the certificates for Old Notes are
not immediately available, (2) time will not permit your certificates for Old
Notes or other required documents to reach Firstar Bank, N.A., as exchange agent
(the "Exchange Agent"), before the Expiration Date or (3) the procedure for
book-entry transfer cannot be completed before the Expiration Date, you may
effect a tender of your Old Notes if (1) the tender is made through an eligible
institution (as defined in the Prospectus under the caption "The Exchange
Offer -- Procedures for Tendering Old Notes"); (2) prior to the Expiration Date,
the Exchange Agent receives from an eligible institution a properly completed
and duly executed Notice of Guaranteed Delivery, substantially in this form,
setting forth your name and address, and the amount of Old Notes you are
tendering and stating that the tender is being made by Notice of Guaranteed
Delivery. These documents may be sent by overnight courier, registered or
certified mail or facsimile transmission. If you elect to use this procedure,
you must also guarantee that within three New York Stock Exchange, Inc. ("NYSE")
trading days after the date of execution of the Notice of Guaranteed Delivery,
the certificates for all physically tendered Old Notes, in proper form for
transfer, or a confirmation of a book-entry transfer (as described in the
Prospectus under the caption "The Exchange Offer -- Procedures for Tendering Old
Notes") of transfer of the Old Notes into the Exchange Agent's account at The
Depository Trust Company (including the Agent's Message (as defined in the
Prospectus under the caption "The Exchange Offer -- Procedures for Tendering Old
Notes") that forms a part of the confirmation of the book-entry transfer), as
the case may be, a properly completed and duly executed Letter of Transmittal,
with any required signature guarantees, and all other documents required by the
Letter of Transmittal, will be deposited by the eligible institution with the
Exchange Agent; and (3) the Exchange Agent receives the certificates for all
physically tendered Old Notes, in proper form for transfer, or a confirmation of
a book-entry transfer of the Old Notes into the Exchange Agent's account at The
Depository Trust Company, as the case may be, a properly completed and duly
executed Letter of Transmittal, with any required signature guarantees, and all
other required documents or, in the case of a confirmation of a book-entry
transfer, a properly completed and duly executed Letter of Transmittal, with any
required signature guarantees, or an Agent's Message instead of the Letter of
Transmittal, in each case, within three NYSE trading days after the date of
execution of this Notice of Guaranteed Delivery.
Delivery to: FIRSTAR BANK, N.A., Exchange Agent
<TABLE>
<S> <C> <C>
By Regular or Certified Mail: By Facsimile: By Overnight Courier or Hand:
(Eligible Guarantor Institutions
Firstar Bank, N.A. Only) Firstar Bank, N.A.
101 E. Fifth Street 101 E. Fifth Street
St. Paul, Minnesota 55101 (651) 229-6415 St. Paul, Minnesota 55101
Attention: Frank Leslie Attention: Frank Leslie
To Confirm by Telephone
or for Information Call:
(651) 229-2600
</TABLE>
DELIVERY OF A LETTER OF TRANSMITTAL OR AGENT'S MESSAGE TO AN ADDRESS OTHER
THAN THE ADDRESS LISTED ABOVE OR TRANSMISSION OF INSTRUCTIONS BY FACSIMILE OTHER
THAN AS SET FORTH ABOVE IS NOT VALID DELIVERY OF THE LETTER OF TRANSMITTAL OR
AGENT'S MESSAGE.
<PAGE> 2
Ladies and Gentlemen:
Subject to the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to Juno
Lighting, Inc. the principal amount of Old Notes set forth below pursuant to the
guaranteed delivery procedure described in the Prospectus under the caption "The
Exchange Offer -- Guaranteed Delivery Procedures."
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Principal Amount of Old Notes Tendered:* If Old Notes will be delivered by book-entry
transfer to The Depository Trust Company,
$ provide account number.
Certificate Nos. (if available):
Account Number
Total Principal Amount Represented by
Old Notes Certificate(s):
$
* Must be in denominations of principal
amount of $1,000 and any integral multiple
thereof.
- ------------------------------------------------------------------------------------------------------
</TABLE>
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE
DEATH OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE UNDERSIGNED
HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS
AND ASSIGNS OF THE UNDERSIGNED.
2
<PAGE> 3
PLEASE SIGN HERE
<TABLE>
<S> <C>
X
Signature(s) of Owner(s) or Authorized Signatory Date
</TABLE>
Area Code and Telephone Number: (___)____________
Must be signed by the holder(s) of Old Notes as their name(s) appear(s) on
certificates for Old Notes or on a security position listing, or by person(s)
authorized to become registered holder(s) by endorsement and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must set
forth his or her full title below.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
<TABLE>
<S> <C>
Name(s):
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
Capacity:
------------------------------------------------------------
Address(es):
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
</TABLE>
3
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, an eligible institution, hereby guarantees that the
certificates representing the principal amount of Old Notes tendered hereby in
proper form for transfer, or timely confirmation of the book-entry transfer of
such Old Notes into the Exchange Agent's account at The Depository Trust Company
pursuant to the procedures set forth in the Prospectus under the caption "The
Exchange Offer -- Guaranteed Delivery Procedures," together with any required
signature guarantee and any other documents required by the Letter of
Transmittal, will be received by the Exchange Agent at the address set forth
above, no later than three NYSE trading days after the Expiration Date.
<TABLE>
<S> <C>
- -------------------------------------------- --------------------------------------------
NAME OF FIRM AUTHORIZED SIGNATURE
- -------------------------------------------- --------------------------------------------
ADDRESS TITLE
- -------------------------------------------- Name:
ZIP CODE --------------------------------------------
Area Code and Tel. No. (PLEASE TYPE OR PRINT)
--------------------------- Dated:
--------------------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES FOR
OLD NOTES SHOULD BE SENT ONLY WITH A COPY OF YOUR PREVIOUSLY EXECUTED
LETTER OF TRANSMITTAL.
4
<PAGE> 1
EXHIBIT 99.5
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.
Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<C> <S> <C>
- ------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF --
- ------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Husband and wife (joint account) The actual owner of
the account or, if
joint funds, the
first individual on
the account(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian or The ward, minor or
committee for a designated ward, incompetent
minor, or incompetent person person(3)
7. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under State law
8. Sole proprietorship account The owner(4)
- ------------------------------------------------------------
- ------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF --
- ------------------------------------------------------------
9. A valid trust, estate, or pension The legal entity
trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, school district,
or prison) that receives
agricultural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the individual name, business name or "doing business as" name of the
owner. Use either individual's social security number or business's employer
identification number (if it has one).
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(A), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A dealer required to register in securities or commodities registered in the
U.S. or a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident alien partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE> 1
EXHIBIT 99.6
Report of Independent Accountants on
Financial Statement Schedule
To the Board of Directors
of Juno Lighting, Inc.
Our audits of the consolidated financial statements of Juno Lighting, Inc.
referred to in our report dated January 14, 1999, appearing on page F-2 of this
Registration Statement, also included an audit of the Financial Statement
Schedule listed herein. In our opinion, the Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
PricewaterhouseCoopers LLP
Chicago, Illinois
January 14, 1999
<PAGE> 2
JUNO LIGHTING, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
-------- --------- -------- -------- -------- --------
Balance at Charged to Other charges
beginning of costs and add (deduct) Balance at
Description period expenses Deductions (a) (b) end of period
- ----------- ------------ ---------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Deducted from assets to which they apply:
Allowance for doubtful accounts:
Year ended November 30, 1998 $ 907 $ 812 $ 510 $ (4) $ 1,205
Year ended November 30, 1997 554 929 574 (2) 907
Year ended November 30, 1996 854 549 850 1 554
</TABLE>
- -------------------------------
NOTES:
(a) Write off of bad debts, less recoveries.
(b) Foreign currency translation.
